PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:17 AM Page 1

Portfolio Select Series Portfolio Review – Second Quarter 2010

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:17 AM Page 2

We are please to introduce Portfolio Review, a new quarterly report on Portfolio Select Series

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Select 100i Managed Portfolio

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Select 80i20e Managed Portfolio

9

Select 70i30e Managed Portfolio

12

Select 60i40e Managed Portfolio

16

Select 50i50e Managed Portfolio

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Select 40i60e Managed Portfolio

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Select 30i70e Managed Portfolio

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Select 20i80e Managed Portfolio

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Portfolio Review provides an enhanced level of detail on the holdings and activity in the Select Managed Portfolios. A separate report is available for each of the nine Portfolios. The information provided in Portfolio Review includes: • Underlying fund allocations • Top 10 holdings by individual security • Performance • Allocations by sector, region, asset class and market cap, and their change over the prior quarter. In addition, each report includes detailed commentary explaining the Portfolio’s performance for the quarter. The commentary is provided by CI Investment Consulting, CI’s in-house team of investment analysts responsible for managing and monitoring the Portfolio Select Series program. We hope you find Portfolio Review to be useful and informative.

Select 100e Managed Portfolio

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Select 100i Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund

100.0%

Bond Information Portfolio yield (approx.) Duration in years

4.6% 5.1

Current asset mix Cash Government and investment-grade corporate bonds High-yield bonds REITs, trusts, & equities

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period.

13.0% 57.0% 16.0% 14.0%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 National Bank of Canada 0.5% 05Jul2010 Canada Government 3.75% 01Jun2019 Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037 Canada Government 5.75% 01Jun2029 Province of Ontario 4.2% 02Jun2020 Canada Government 3.5% 01Jun2013 The 55 Ontario School Board Trust 5.9% 02Jun2033 Canada Government 4% 01Jun2016

All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

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4.2% 2.8% 2.1% 1.7% 1.6% 1.5% 1.3% 1.2% 1.2% 1.1%

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Select 100i Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

1.2%

1.4%

2.8%

9.0%

4.0%

n/a

n/a

3.2%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 100i Managed Portfolio, including the allocations across asset class and geographic region. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

53.9% 18.8% 13.4% 10.9% 1.0% 0.9% 0.9% 0.2%

— Canadian bond ▲ — Foreign bond ▼ — Cash ▲ — Canadian equity ▲ — Asian equity ▼ — U.S. equity ▲ — European equity ▼ — Emerging markets equity ■

Equity Market Cap

64.8% 15.2% 13.2% 1.2% 1.2% 1.1% 1.0% 0.9% 0.8% 0.6%

— Canada ▲ — Other ■ — U.S. ■ — U.K. ▲ — Emerging markets ▼ — Australia ▼ — France ■ — Spain ▼ — Ireland ▼ — Germany ▲

36.2% 30.3% 10.6% 9.0% 8.0% 3.3% 1.7% 0.9%

— Financial services ▼ — Energy ▲ — Telecommunications ▲ — Utilities ■ — Industrials ▼ — Consumer discretionary ▼ — Health care ▲ — Materials ▼

Equity Industry Sector 54.1% — Mid cap ▼ 30.5% — Large cap ▼ 15.4% — Small cap ▲

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Select 100i Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary Over the near term, the investment environment likely will be complicated by the expiration of government stimulus programs and other fiscal retrenchment, European debt refunding, the ongoing unemployment issue south of the border, and political and regulatory uncertainty. As the market tries to map these developments onto the already decelerating economy, Signature Global Advisors, manager of the Select Income Managed Fund, anticipates further volatility in rates and credit spreads. Indeed, the direction of interest rate policy in Canada is not certain despite the Bank of Canada’s current tightening bias. Signature believes that the global recovery from the 2008 financial crisis is underway but remains fragile and susceptible to shocks.

The portfolio rose 1.4% during the quarter, lagging its benchmark (DEX Universe Bond Index), which returned 2.9%. Canadian income trusts and global stocks in the high-yielding equity portion of the portfolio were the main detractors from performance. They declined as investors preferred the relative safety of bonds and precious metals. Investment-grade bonds were the portfolio’s largest contributor to performance, and also added value on a relative basis. Investors engaged in a “flight to safety” on fears of a slowdown in the global economy and the risk of a doubledip recession. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

The portfolio’s interest rate risk has been reduced by having exposure to corporate bonds with shorter durations and higher yields, as well as alternative sources of income such as high-yielding equities that typically have lower sensitivity to interest rate movements.

In the first couple of weeks of the second quarter, stocks and government yields crested to new year-to-date highs. The Bank of Canada indicated that short-term rates were headed higher starting in the summer months. By the end of April, the market had priced in central bank hikes of nearly 1.5 percentage points by year-end. Since that time, economic momentum from the supercharged winter months has begun to wane. The anemic job recovery and continued deleveraging have weighed on consumption in the U.S., while in Canada, factors such as hosting the Winter Olympics, upcoming tightening of mortgage standards, and the July introduction of harmonized sales taxes in Ontario and British Columbia all contributed to economic activity being brought forward. As the data for the second quarter unfolds, it appears that the economy is downshifting to about half of the 5.5% growth rate recorded in the first quarter.

A large portion of the portfolio’s foreign currency exposure is hedged back to the Canadian dollar. This significantly dampens volatility from currency movements. The portfolio experienced a small currency gain. Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

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Select 80i20e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund Select Canadian Equity Managed Fund Select International Equity Managed Fund Select U.S. Equity Managed Fund

81.3% 7.9% 5.5% 5.3%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 National Bank of Canada 0.5% 05Jul2010 Canada Government 3.75% 01Jun2019 Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037 Canada Government 5.75% 01Jun2029 Province of Ontario 4.2% 02Jun2020 Canada Government 3.5% 01Jun2013 The 55 Ontario School Board Trust 5.9% 02Jun2033 Canada Government 4% 01Jun2016

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

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3.4% 2.3% 1.7% 1.4% 1.3% 1.2% 1.1% 1.0% 1.0% 0.9%

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Select 80i20e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

0.3%

-0.6%

1.2%

8.5%

1.4%

n/a

n/a

1.3%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 80i20e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

43.7% 16.4% 15.2% 12.1% 5.5% 3.7% 2.3% 1.1%

— Canadian bond ▲ — Canadian equity ▼ — Foreign bond ▲ — Cash ▲ — U.S. equity ▼ — European equity ▼ — Asian equity ▼ — Emerging markets equity ■

Equity Market Cap

60.1% 15.6% 15.4% 1.9% 1.8% 1.2% 1.1% 1.0% 1.0% 0.9%

— Canada ▲ — Other ▲ — U.S. ▼ — Emerging markets ▼ — U.K. ■ — France ▲ — Japan ▼ — Australia ■ — Germany ▲ — Ireland ■

27.5% 21.8% 9.7% 8.2% 7.5% 6.7% 5.5% 4.6% 4.5% 4.0%

— Financial services ▼ — Energy ▲ — Industrials ▼ — Consumer discretionary ▲ — Materials ▼ — Information technology ▼ — Telecommunications ▲ — Utilities ▼ — Health care ▲ — Consumer staples ▼

Equity Industry Sector 58.4% — Large cap ▲ 33.1% — Mid cap ▼ 8.5% — Small cap ▲

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Select 80i20e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

The portfolio declined 0.6% during the quarter, lagging its benchmark (80% DEX Universe Bond Index and 20% S&P/TSX Composite Index), which returned 1.2%. Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

A large portion of the portfolio’s foreign currency exposure is hedged back to the Canadian dollar, significantly dampening volatility from currency movements. The portfolio experienced a small currency gain. The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy. On the positive side, corporations generally reported solid earnings. Many companies benefited from operating leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

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Select 70i30e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

71.5% 11.4% 9.2% 8.0%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 National Bank of Canada 0.5% 05Jul2010 Canada Government 3.75% 01Jun2019 Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037 Canada Government 5.75% 01Jun2029 Province of Ontario 4.2% 02Jun2020 Canada Government 3.5% 01Jun2013 The 55 Ontario School Board Trust 5.9% 02Jun2033 Canada Government 4% 01Jun2016

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

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3.0% 2.0% 1.5% 1.2% 1.2% 1.0% 1.0% 0.9% 0.8% 0.8%

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Select 70i30e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-0.1%

-1.7%

0.2%

8.3%

0.1%

n/a

n/a

0.4%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 70i30e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

38.5% 18.5% 13.4% 11.2% 9.0% 5.0% 2.9% 1.5%

— Canadian bond ▲ — Canadian equity ▼ — Foreign bond ▲ — Cash ▲ — U.S. equity ▼ — European equity ▼ — Asian equity ▲ — Emerging markets equity ■

Equity Market Cap

57.1% 17.7% 15.1% 2.2% 2.0% 1.6% 1.3% 1.1% 1.0% 0.9%

— Canada ▲ — U.S. ▼ — Other ▲ — Emerging markets ▼ — U.K. ■ — Japan ▼ — France ▲ — Germany ▲ — Switzerland ■ — Australia ■

25.4% 19.9% 10.1% 9.2% 8.5% 8.5% 5.4% 4.7% 4.5% 3.8%

— Financial services ▼ — Energy ▲ — Industrials ▼ — Consumer discretionary ▲ — Information technology ▼ — Materials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▲ — Utilities ▼

Equity Industry Sector 64.3% — Large cap ▲ 28.8% — Mid cap ▼ 6.9% — Small cap ▲

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Select 70i30e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary A large portion of the portfolio’s foreign currency exposure is hedged back to the Canadian dollar, significantly dampening volatility from currency movements. The portfolio experienced a small currency gain.

The portfolio declined 1.7% during the quarter, lagging its benchmark (70% DEX Universe Bond Index, 20% S&P/TSX Composite Index and 10% MSCI World Index C$), which returned 0.1%. Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value. Canadian equities outperformed both U.S. and international equities due to strength in the consumer discretionary, telecommunications and materials sectors.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growthoriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals. 11

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Select 60i40e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

61.8% 15.3% 13.1% 9.9%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 National Bank of Canada 0.5% 05Jul2010 Canada Government 3.75% 01Jun2019 Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037 Canada Government 5.75% 01Jun2029 Province of Ontario 4.2% 02Jun2020 Toronto-Dominion Bank Canada Government 3.5% 01Jun2013 The 55 Ontario School Board Trust 5.9% 02Jun2033

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

12

2.6% 1.7% 1.3% 1.1% 1.0% 0.9% 0.8% 0.8% 0.8% 0.7%

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Select 60i40e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-0.5%

-2.6%

-0.6%

8.0%

-1.2%

n/a

n/a

-0.6%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 60i40e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

33.6% 21.4% 12.5% 11.7% 9.6% 6.1% 3.3% 1.8%

— Canadian bond ▲ — Canadian equity ▼ — U.S. equity ▼ — Foreign bond ▲ — Cash ▼ — European equity ▼ — Asian equity ▼ — Emerging markets equity ■

Equity Market Cap

55.0% 20.1% 13.5% 2.4% 2.2% 2.0% 1.4% 1.3% 1.2% 0.9%

— Canada ▲ — U.S. ▼ — Other ▲ — Emerging markets ▼ — U.K. ■ — Japan ▼ — France ▲ — Germany ▲ — Switzerland ▲ — Ireland ■

24.2% 18.9% 10.3% 9.9% 9.5% 9.2% 5.8% 5.1% 3.8% 3.3%

— Financial services ▼ — Energy ▲ — Industrials ▼ — Consumer discretionary ▲ — Information technology ▼ — Materials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▼ — Utilities ▼

Equity Industry Sector 67.7% — Large cap ▲ 26.2% — Mid cap ▼ 6.1% — Small cap ▲

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Select 60i40e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary flow, after having cut costs and cleaned up their balance sheets during the slowdown.

The portfolio declined 2.6% during the quarter, lagging its benchmark (60% DEX Universe Bond Index, 20% S&P/TSX Composite Index and 20% MSCI World Index C$), which fell 1.0%.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

The upward trend in global stocks appeared to end or at least pause late in the first half of 2010 as global events turned market sentiment against equities.

Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The managers have overweight positions in industrials and

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating leverage and are generating significant levels of free cash

14

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Select 60i40e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro. Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

15

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Select 50i50e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

51.9% 19.4% 16.8% 11.9%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 National Bank of Canada 0.5% 05Jul2010 Canada Government 3.75% 01Jun2019 Toronto-Dominion Bank Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037 Royal Bank of Canada Canada Government 5.75% 01Jun2029 Province of Ontario 4.2% 02Jun2020 Bank of Montreal

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

16

2.2% 1.4% 1.1% 1.0% 0.9% 0.8% 0.8% 0.8% 0.7% 0.7%

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:17 AM Page 17

Select 50i50e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-1.0%

-3.7%

-1.6%

7.6%

-2.5%

n/a

n/a

-1.5%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 50i50e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

27.9% 24.1% 15.6% 9.7% 9.6% 7.1% 3.8% 2.2%

— Canadian bond ▲ — Canadian equity ▼ — U.S. equity ▼ — Foreign bond ▲ — Cash ▲ — European equity ▼ — Asian equity ▼ — Emerging markets equity ■

Equity Market Cap

52.0% 21.9% 13.6% 2.7% 2.4% 2.3% 1.4% 1.4% 1.4% 0.9%

— Canada ▲ — U.S. ▼ — Other ▲ — Emerging markets ▼ — Japan ▼ — U.K. ▼ — France ▲ — Germany ▲ — Switzerland ▲ — Ireland ■

23.4% 18.2% 10.4% 10.4% 10.2% 9.8% 6.1% 5.3% 3.3% 2.9%

— Financial services ▼ — Energy ▲ — Consumer discretionary ▲ — Industrials ▼ — Information technology ▼ — Materials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▼ — Utilities ▼

Equity Industry Sector 70.2% — Large cap ▲ 24.4% — Mid cap ▼ 5.4% — Small cap ▼

17

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Select 50i50e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

The portfolio declined 3.7% during the quarter, lagging its benchmark (50% DEX Universe Bond Index, 20% S&P/TSX Composite Index, 15% MSCI World Index C$ and 15% MSCI World Index local currency), which fell 2.6%.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s governement bond allocation contributed positively to performance.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities.

Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating

18

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Select 50i50e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro.

managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

19

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Select 40i60e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Income Managed Fund Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

41.9% 23.6% 19.6% 15.0%

Top Ten Holdings ABN Amro Bank TD 0.5% 02Jul2010 Toronto-Dominion Bank National Bank of Canada 0.5% 05Jul2010 Royal Bank of Canada Canada Government 3.75% 01Jun2019 Bank of Montreal Barrick Gold Corporation Suncor Energy Inc. Canada Government 2.5% 01Jun2015 Canada Government 5% 01Jun2037

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

20

1.8% 1.2% 1.2% 1.0% 0.9% 0.8% 0.8% 0.8% 0.7% 0.7%

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:17 AM Page 21

Select 40i60e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-1.4%

-4.5%

-2.4%

7.4%

-3.8%

n/a

n/a

-2.5%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 40i60e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

27.0% 22.6% 18.1% 8.7% 8.5% 7.9% 4.5% 2.7%

— Canadian equity ▼ — Canadian bond ▲ — U.S. equity ▼ — European equity ▼ — Cash ▼ — Foreign bond ▲ — Asian equity ▼ — Emerging markets equity ▲

Equity Market Cap

49.6% 23.3% 12.7% 3.1% 3.0% 2.7% 1.6% 1.6% 1.5% 0.9%

— Canada ▲ — U.S. ▼ — Other ▲ — Emerging markets ▼ — Japan ▼ — U.K. ■ — Germany ▲ — Switzerland ▲ — France ▲ — Ireland ■

22.8% 17.6% 10.7% 10.6% 10.5% 10.3% 6.2% 5.7% 3.0% 2.6%

— Financial services ▲ — Energy ▲ — Materials ▼ — Information technology ▼ — Industrials ▼ — Consumer discretionary ▲ — Health care ▲ — Consumer staples ▲ — Telecommunications ▲ — Utilities ▼

Equity Industry Sector 72.0% — Large cap ▲ 23.0% — Mid cap ▼ 5.0% — Small cap ▼

21

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Select 40i60e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

The portfolio declined 4.5% during the quarter, slightly lagging its benchmark (40% DEX Universe Bond Index, 24% S&P/TSX Composite Index, 18% MSCI World Index C$ and 18% MSCI World Index local currency), which fell 3.7%.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities.

Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating

22

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Select 40i60e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro.

managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

23

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Select 30i70e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Canadian Equity Managed Fund Select Income Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

32.4% 27.8% 23.0% 16.8%

Top Ten Holdings Toronto-Dominion Bank ABN Amro Bank TD 0.5% 02Jul2010 Royal Bank of Canada Bank of Montreal Barrick Gold Corporation Suncor Energy Inc. National Bank of Canada 0.5% 05Jul2010 Canadian National Railway Company Potash Corporation of Saskatchewan Inc. Goldcorp Inc.

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

24

1.4% 1.4% 1.2% 1.0% 1.0% 0.9% 0.9% 0.7% 0.7% 0.7%

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:18 AM Page 25

Select 30i70e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-1.9%

-5.5%

-3.2%

7.1%

-5.2%

n/a

n/a

-3.5%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 30i70e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

29.9% 21.1% 17.5% 9.7% 7.8% 6.1% 4.9% 3.0%

— Canadian equity ▲ — U.S. equity ▼ — Canadian bond ▲ — European equity ■ — Cash ▼ — Foreign bond ▲ — Asian equity ▲ — Emerging markets equity ▲

Equity Market Cap

47.4% 25.1% 12.1% 3.4% 3.3% 2.8% 1.7% 1.7% 1.6% 0.9%

— Canada ▲ — U.S. ▼ — Other ▲ — Japan ▼ — Emerging markets ▼ — U.K. ■ — Switzerland ▲ — Germany ▲ — France ▲ — Ireland ■

22.5% 17.3% 10.9% 10.9% 10.6% 10.6% 6.4% 5.7% 2.7% 2.4%

— Financial services ▼ — Energy ▲ — Consumer discretionary ▲ — Information technology ▼ — Industrials ▼ — Materials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▲ — Utilities ▲ ▼

Equity Industry Sector 73.2% — Large cap ▲ 22.1% — Mid cap ▼ 4.7% — Small cap ▼

25

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Select 30i70e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

The portfolio declined 5.5% during the quarter, slightly lagging its benchmark (30% DEX Universe Bond Index, 28% S&P/TSX Composite Index, 21% MSCI World Index C$ and 21% MSCI World Index local currency), which fell 4.8%.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities.

Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating

26

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:18 AM Page 27

Select 30i70e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro.

managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

27

PSS_PReview_Booklet_Q210_E:PSS - Select 100i managed portfolio - review - E 02/09/10 10:18 AM Page 28

Select 20i80e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select Income Managed Fund Select International Equity Managed Fund

32.2% 26.4% 22.0% 19.5%

Top Ten Holdings Toronto-Dominion Bank Royal Bank of Canada Bank of Montreal Barrick Gold Corporation Suncor Energy Inc. ABN Amro Bank TD 0.5% 02Jul2010 Potash Corporation of Saskatchewan Inc. Goldcorp Inc. Canadian National Railway Company Canadian Natural Resources Ltd.

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

28

1.7% 1.4% 1.1% 1.1% 1.0% 0.9% 0.8% 0.8% 0.8% 0.8%

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Select 20i80e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-2.3%

-6.4%

-4.0%

7.0%

-6.5%

n/a

n/a

-4.4%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 20i80e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

32.9% 24.0% 11.8% 11.1% 7.2% 5.5% 4.1% 3.4%

— Canadian equity ▼ — U.S. equity ▼ — Canadian bond ▲ — European equity ▲ — Cash ■ — Asian equity ▼ — Foreign bond ▲ — Emerging markets equity ▲

Equity Market Cap

44.7% 26.7% 11.5% 3.9% 3.6% 3.0% 2.0% 1.9% 1.7% 1.0%

— Canada ▲ — U.S. ▼ — Other ▲ — Japan ▼ — Emerging markets ▼ — U.K. ▼ — Switzerland ▲ — Germany ▲ — France ▲ — Ireland ▲

22.1% 17.0% 11.2% 11.1% 10.9% 10.6% 6.5% 5.9% 2.5% 2.2%

— Financial services ▼ — Energy ▲ — Information technology ▼ — Consumer discretionary ▲ — Materials ▼ — Industrials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▲ — Utilities ▼

Equity Industry Sector 74.4% — Large cap ▲ 21.2% — Mid cap ▼ 4.4% — Small cap ▼

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Select 20i80e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

The portfolio declined 6.4% during the quarter, slightly lagging its benchmark (20% DEX Universe Bond Index, 32% S&P/TSX Composite Index, 24% MSCI World Index C$ and 24% MSCI World Index local currency), which fell 5.8%.

In the income category, the portfolio’s biggest detractors were income trusts and common equities. They declined as investors preferred the relative safety of bonds and precious metals.

Select Income Managed Fund was the largest contributor to performance, mainly on the strength of its holdings of investment-grade bonds, which added value both on an absolute and relative basis. The income fund’s performance trailed its benchmark (DEX Universe Bond Index), however, resulting in the portfolio’s underperformance compared to the benchmark. Select U.S. Equity Managed Fund was the largest detractor in absolute terms, mainly because of weakness in the energy, financials and information technology sectors.

The portfolio manager of the Select Income Managed Fund, Signature Global Advisors, continues to see value in corporate bonds and is positioning the portfolio for a flatter yield curve. Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. Higher-quality bonds benefited from investors’ shift to assets deemed to carry less risk. As a result, the portfolio’s government bond allocation contributed positively to performance.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

The upward trend in global stocks appeared to end or at least pause late in the first half of 2010 as global events turned market sentiment against equities.

Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

Employment and housing data in the U.S. gave rise to concerns of a double-dip recession, which would be negative for Canada. In Europe, politicians and bankers have been grappling with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy.

The equity portion of the portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and an underweight position in defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The

On the positive side, corporations generally reported solid earnings. Many companies benefited from operating

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Select 20i80e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro.

managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

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Select 100e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Managers’ Economic Overview

Underlying Fund Allocations

After a string of solid gains, the world’s stock markets paused during the second quarter of 2010 as global events took their toll on investor optimism. Worries that the Greek debt crisis would spill over to Portugal, Ireland, Italy and Spain set the stage for a re-emergence of selling pressures in every major equity market. Fears that the contagion would spread outside Europe provided the basis for increased investor anxiety. Amid the turmoil, Canada was the first of the G7 nations to fully emerge from recession and raise interest rates, as widening gaps appeared in the economic performances of the major economies. (In June, the Bank of Canada raised the overnight rate by 25 basis points.)

Select Canadian Equity Managed Fund Select U.S. Equity Managed Fund Select International Equity Managed Fund

41.1% 33.6% 25.3%

Top Ten Holdings Toronto-Dominion Bank Royal Bank of Canada Bank of Montreal Barrick Gold Corporation Suncor Energy Inc. Potash Corporation of Saskatchewan Inc. Goldcorp Inc. Canadian Natural Resources Ltd. Microsoft Corporation Canadian National Railway Company

While some positive earnings appeared, evidence of a still-struggling U.S. economy overshadowed corporate announcements. The unemployment rate at the end of the second quarter fell to 9.5%, reflecting the fact that many Americans gave up on their job searches. There was continued softness in U.S. consumer spending in the first quarter, after recording a 5.6% pace in the previous quarter. The Federal Reserve left interest rates unchanged and continued to state that they would remain low for an extended period. All of the main stock markets, with the exception of Canada, recorded a technical correction (a decline of 10% from the recent market peak) during the quarter. Despite avoiding a technical correction, the Canadian market reversed course during the second quarter and the S&P/TSX Composite Index gave up 5.5%. A retrenchment in consumer spending in April left GDP growth flat for the month and ended a seven-month string of growth in the economy. However, there were continued signs of underlying strength. Statistics Canada reported that nearly all of the jobs lost to the recession had been recovered.

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2.1% 1.7% 1.4% 1.4% 1.3% 1.0% 1.0% 1.0% 1.0% 1.0%

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Select 100e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Performance (class A) 1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

10 Years

Since Inception

-3.2%

-8.3%

-5.8%

6.3%

-9.2%

n/a

n/a

-6.4%

(November 2006)

Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. This report is designed to provide you with an up-to-date portfolio overview of the Select 100e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end.

Asset Class

Geographic Regions

39.0% 30.4% 14.1% 6.9% 5.2% 4.4%

— Canadian equity ▼ — U.S. equity ▼ — European equity ▲ — Asian equity ▲ — Cash ▼ — Emerging markets equity ▲

Equity Market Cap

39.0% 30.4% 9.9% 5.1% 4.4% 3.6% 2.4% 2.3% 1.9% 1.0%

— Canada ▼ — U.S. ▼ — Other ▲ — Japan ■ — Emerging markets ▼ — U.K. ▲ — Switzerland ▲ — Germany ▲ — France ▲ — Ireland ▲

21.4% 16.4% 11.6% 11.5% 11.3% 10.8% 6.7% 6.2% 2.2% 1.9%

— Financial services ▼ — Energy ▲ — Information technology ▼ — Consumer discretionary ▲ — Materials ▼ — Industrials ▼ — Health care ▲ — Consumer staples ▲ — Telecommunications ▲ — Utilities ▼

Equity Industry Sector 76.3% — Large cap ▲ 19.8% — Mid cap ▼ 3.9% — Small cap ▼

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Select 100e Managed Portfolio Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Commentary Within the U.S. equity allocation, the value-style mandate was the largest detractor, as weak stock selection in energy (mainly Anadarko Petroleum), and consumer discretionary (largely KB Home and Warnaco Group) drove underperformance.

The portfolio declined 8.3% during the quarter, slightly lagging its benchmark (40% S&P/TSX Composite Index, MSCI World Index C$, 30%, and 30% MSCI World Index local currency), which fell 8.0%. Select U.S. Equity Managed Fund was the largest detractor on an absolute and relative basis.

The portfolio has an underweight allocation to financials due to the sector’s sensitivity to interest rates and underweight to defensive sectors (such as telecommunications, consumer staples, and utilities) because these sectors have excessive valuations and the portfolio managers are positioning the portfolio to benefit from an economic recovery. The managers have overweight positions in industrials and information technology, as these areas typically benefit the most during a recovery. Despite being underweight financials versus the benchmark, this sector had the largest allocation and detracted from performance. This underweight positioning added slightly to performance on a relative basis.

The upward trend in global stocks paused late in the first half of 2010 as global events turned market sentiment against equities. Investors engaged in a “flight to safety” on fears of a slowdown in the global economy. This contributed to losses in the equity markets in the second quarter. Weak employment and housing data in the U.S. was one of the main causes for concern, while in Europe, politicians and bankers grappled with the Greek debt crisis, which they desperately want to fence in. China, a standout over the past two years for its economic growth, showed signs of slowing, driving down the prices of commodities and global growth-oriented shares in sectors such as basic materials and energy. On the positive side, corporations generally reported solid earnings. Many companies benefited from operating leverage and are generating significant levels of free cash flow, after having cut costs and cleaned up their balance sheets during the slowdown.

All international equity mandates added value on a relative basis. The portion of the growth mandate managed by Picton Mahoney Asset Management added the most value compared to the benchmark. It had strong stock selection, especially within the U.K., where Astrazeneca and BT Group were among the top contributors. The emerging markets mandate was the smallest detractor in terms of absolute performance, benefiting from relative strength in China, India and South Korea.

Select Canadian Equity Managed Fund performed better than the other equity mandates, mainly because of the relative strength of the Canadian stock market. Also, the fund’s overweight position in the consumer discretionary sector, compared to its benchmark, added value.

The currency hedging strategy of the portfolio detracted from performance of the U.S. and international equity mandates as the Canadian dollar depreciated against the U.S. dollar, Japanese yen and British pound, despite appreciating against the euro.

The Canadian small-cap mandate, managed by QV Investors, added value by outperforming the S&P/TSX Composite Index, due largely to strong stock selection in consumer staples (Empire and Saputo Group) and financials (Industrial Alliance and E L Financial).

Alfred Lam, CFA, Vice-President and Portfolio Manager Yoonjai Shin, CFA, Director Neelam Mistry, Analyst Lewis Harkes, CFA, Analyst Tony Mallozzi, Manager, Investment Services

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Portfolio Select Series Portfolio Review – Second Quarter 2010 as at June 30, 2010

Portfolio Management Team Altrinsic Global Advisors, LLC follows a fundamental value approach in which the team seeks out high-quality undervalued companies worldwide. Founded by John Hock and associates, Altrinsic is based in Greenwich, Connecticut, and manages C$10 billion in assets.

Investment Par tners

Epoch Investment Partners, Inc. is a New York-based investment management firm founded by Wall Street veteran William Priest and associates. Epoch uses a unique value-based approach that focuses on companies with superior shareholder yield. The team manages more than US$11 billion in assets.

QV Investors Inc. is a Calgary-based, employee-owned portfolio management firm that serves individual and institutional investors. QV follows a value-based approach in which it seeks companies with better returns and lower valuations than those of the market. The firm is led by Chief Investment Officer Leigh Pullen and manages $2.4 billion in assets.

Signature Global Advisors is CI Investments’ largest in-house portfolio management group with $23 billion in assets. Signature’s advantage is its approach in which asset class and sector specialists combine their research to develop a comprehensive picture of a company and its securities. The team of 23 investment professionals is led by Chief Investment Officer Eric Bushell, who was named Morningstar Equity Fund Manager of the Year in 2009.

Picton Mahoney Asset Management is a portfolio management firm led by David Picton and Michael Mahoney. The use of quantitative analysis is the foundation of their approach. Picton Mahoney maintains a disciplined focus on fundamental change, coupled with strong risk controls and portfolio construction techniques. The firm manages about $5 billion.

Tetrem Capital Management Ltd. is an employee-owned investment management firm founded by Chief Investment Officer Daniel Bubis. It is based in Winnipeg and has an office in Boston. Tetrem uses a disciplined investment approach to invest in undervalued Canadian and U.S. companies. The firm manages over $5 billion.

Trilogy Global Advisors, LLC is an employee-owned money management firm with a research-driven, growth-oriented investment style. The team, led by Chief Investment Officer William Sterling, has extensive experience investing in markets around the world and manages over US$10 billion.

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All commentaries are published by CI Investments Inc., the manager of all the funds described herein. They are provided as a general source of information and should not be considered personal investment advice or an offer or solicitation to buy or sell securities. Every effort has been made to ensure that the material contained in the commentaries is accurate at the time of publication. However, CI Investments Inc. cannot guarantee their accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer and there can be no assurances that the CI Money Market Funds will maintain its net asset value per security at a constant amount or that the full amount of your investment in these funds will be returned to you. ®CI Investments, the CI Investments design,Synergy Mutual Funds, Harbour Advisors, Harbour Funds, Global Managers and American Managers are registered trademarks of CI Investments Inc. ™Portfolio Select Series, Portfolio Series, Signature Funds and Signature Global Advisors are trademarks of CI Investments Inc.

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