Mutual Fund Portfolio Strategies Agenda

• Investor’s dilemma… Why diversify?• Asset allocation - Why does it matter?• Asset allocation - How it works?• Asset allocation - Why it works?• Asset allocation - What it will do for you.• Why use a Financial Advisor?

100% T-Bills100% T-Bills

ExpecteExpectedd

ReturnReturn100% Bonds100% Bonds

100% Equities100% Equities

Risk/VolatilityRisk/Volatility

Yes

No!

Risk vs Return

CombinationsCombinations

VOLATILITYVOLATILITY

RETURN

RETURN

HigherHigher

HigherHigher

LowerLower

GrowthGrowth

BalancedBalanced

ModerateModerate

ConservativeConservative

Historical Portfolio Risk vs Return

AggressiveAggressive

1. A profile 1. A profile Questionnaire calculates Questionnaire calculates your Risk Scoreyour Risk Score

3. Match to the 3. Match to the Asset Allocation Asset Allocation

Portfolio Portfolio RecommendationRecommendation

2. Match your risk 2. Match your risk score to your score to your portfolio’s portfolio’s Investment Investment ObjectiveObjective

Aggressive

Growth

Balanced

Moderate

Conservative

Asset Allocation InvestingMade Easy …

Investment Personality ?

• Current Net worth• Financial Goals• Investment Time Horizon• Needs for Liquidity• Safety / Risk tolerance • Retirement Income Need• Other Income Sources• Inflation Protection• Principle Protection

• Current Income• Taxation Priorities • Portfolio Review• Past Performance• Financial Statements• Existing Investments• Family Income Needs • Estate Preservation• Wealth Transfer

Asset Mix Universes

4%5%6%7%8%9%

10%11%12%13%14%15%

0% 2% 4% 6% 8% 10%

12%

14%

16%

18%

20%

22%

24%

Risk (Stdev)

Ann

ual R

etur

n (M

ean)

What will a balanced Asset Allocation do for you ? It will provide Good Long-term Performance !

Risk (Std. Deviation)

Asset Mix Universe

Max Frontier

Diversified Frontier

Asset Allocation Portfolio Mixes

Conservative

EquityFixed-Income

Equity100%

Equity60%

Fixed-Income

40%

Equity80%

Fixed-Income

20%

Equity20%

Fixed-Income

80%

Equity40%

Fixed-Income

60%

Aggressive Growth

Moderate

Balanced

Growth

Asset Class Best Funds Report

• Canadian equity• Canadian dividend• Income trusts• Canadian bonds• Short term bonds• Global bonds• US equity• International equity• Money market• Specialty funds• Sector markets

• AGF• Franklin Templeton• Elliott & page (Manulife)• Fidelity• AIC (buy, hold & prosper)• AIM Trimark• TD funds• Manulife / standard life• Big bank funds• Phillips Hager & north• Cartier partners• Ethical funds / credit union

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

Int'l Stocks US Stocks Can. Stocks Can. Bonds

Correlation… Why Does It Work?

Understanding Your Critical Portfolio Success Factors

Your existing financial situation

Your priorities & financial goals

Your investment timeline

Your risk tolerance

Optimal asset allocationAsset class investment selections Time in the market !Not timing the market!

Investment Selection Success Factors

Historically Successful Returns – ask why?

Consistent Top Quartile Rankings – ask why?

Asset Class & Volatility Expectations = Risk

How does it Compare against its own index ?

Best Funds Report for past 3, 5 & 10-yearsFront End Fees, Back End Fees, or No Load?RSP Eligible? Dollar Limits or Restrictions? Low MER or Principle Guarantees, if possible?Any Principle or Maturity Guarantees ?

Having your own certified financial planner …

Do you own mutual funds already?

Did you know that part of your MER is paid to someone?

Is this “someone” giving you the service you need?

Is this “someone” giving you the advice you need?

Is this “someone” giving you the respect you need?

Since you are already paying “someone” part of the MER

why not put your funds under your own control of who this advisor should be? … Someone who deserves it !

Samuel J. Esaw, CFP, CLU, CHFC

• Certified Financial Planner• Chartered Life Underwriter• Chartered Financial Consultant• Helping build, protect & preserve estates since 1985

• Served Lawyers with the Canadian Bar Association• Served Doctors with the Canadian Medical Association • Now serving you with unbiased & independent advice

Well Informed … Well Advised