PROSPECTUS - Scotiabank...Grand Cayman Cayman Islands, BWI Legal Advisors (as to Cayman Islands law)...

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Scotiabank Mutual Funds

PROSPECTUS

TM

Relating to the continuous offering of Shares in the following mutual funds on the terms describedin this Prospectus

Redeemable Preferred Shares of US$0.0I par value of (hereinafter referred to as “Shares”)

SCOTIABANK MONEY MARKET FUND

SCOTIABANK US DOLLAR BOND FUND

SCOTIABANK GLOBAL GROWTH FUND

SCOTIABANK US GROWTH FUND

Redeemable Preferred Shares of CDN$0.01 par value of (hereinafter referred to as “Shares”)

SCOTIABANK CANADIAN GROWTH FUND

(Each an exempted company established under the laws of the Cayman Islands)

LISTING AGENTPricewaterhouseCoopersStrathvale HouseNorth Church StreetPO Box 258 GTGrand CaymanCayman Islands, BWI

DISTRIBUTORScotiabank & Trust (Cayman) Ltd.6 Cardinall AvenueGrand CaymanCayman Islands, BWI

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This Prospectus includes information given in compliance

with the Listing Rules of the Cayman Islands Stock

Exchange. The Directors of Scotiabank Money Market

Fund, Scotiabank US Dollar Bond Fund, Scotiabank Global Growth

Fund, Scotiabank US Growth Fund and Scotiabank Canadian

Growth Fund collectively and individually accept full responsibility

for the accuracy of the information contained in this Prospectus

and confirm, having made reasonable enquiry, that to the best of

their knowledge and belief there are no facts the omission of

which would make any statement within this document

misleading. The Cayman Islands Stock Exchange takes no

responsibility for the contents of this Prospectus, makes no

representations as to its accuracy or completeness, and expressly

disclaims any liability whatsoever for any loss arising from or in

reliance upon any part of this document.

NOTICE TO INVESTORS

If you are in any doubt about the contents of thisProspectus, you should consult your stockbroker, bankmanager, attorney, accountant or other financial advisor.

No sales agent or other person has been authorised togive any information or to make any representations,whether orally or in writing, other than those describedin this Prospectus. Decisions to subscribe for Sharesshould be made on the basis of the informationcontained in this Prospectus and the documents availablefor inspection specified herein, copies of which may beobtained from the Manager in the Cayman Islands.Neither the delivery of this Prospectus nor the issue ofShares shall imply that there has been no change in theaffairs of the Funds since the date of this Prospectus.

The value of Shares are subject to the performance ofthe investments of the Funds and as these investmentsare subject to prevailing and anticipated economic,political and social conditions, the value of such Sharesmay fall as well as rise. Past performance of the Shares isnot necessarily a guide to how such Shares will performin the future, as economic conditions do not remainconstant and are subject to change. The nature of theseFunds is such that the Shares should be regarded aslonger-term investments (see "Risk Factors").

Shares which are issued and to be issued as describedherein by Scotiabank Money Market Fund, Scotiabank USDollar Bond Fund, Scotiabank Global Growth Fund,Scotiabank US Growth Fund and Scotiabank CanadianGrowth Fund were admitted to the official list of theCayman Islands Stock Exchange with effect fromNovember 12, 1999. No application has been made forsuch Shares to be listed on any other stock exchange. Itis not anticipated that an active secondary market in theShares will develop.

Statements in this Prospectus are based on the law andpractice at the date hereof and are subject to change.

DISTRIBUTION

This Prospectus does not constitute an offer orsolicitation in any jurisdiction in which such offer orsolicitation would be unlawful.

The Shares have not been and will not be registeredunder the United States Securities Act of 1933, asamended, or under the securities laws of any State ofthe United States, and, except in a transaction whichdoes not violate such Act or laws, may not be directly orindirectly offered, sold, transferred or delivered directlyor indirectly to any person in the United States or to orfor the benefit of a United States person. The Fundshave not been and will not be registered under theUnited States Investment Company Act of 1940.

Applicants for Shares will be required to declare thatthey are not a United States person and are notapplying for Shares on behalf of any United Statesperson. A US person is defined as:

"Any citizen, national or resident of the United States(including any corporation, partnership or other entityorganized or created under the laws of the UnitedStates or any political subdivision thereof and anyagency or branch of a foreign entity located in theUnited States) or any estate or trust the income ofwhich is subject to United States Federal incometaxation regardless of its source or any entity organizedor incorporated under the laws of a jurisdiction otherthan the United States if formed by a US Personprincipally to invest in securities not registered under USsecurities laws (but no entity organized by a US personwhich has been organised as an agency or branch for avalid business purpose and is engaged in the banking orinsurance business and is subject to substantive localregulation will be deemed to be a US Person)."

The Shares may not be offered, sold, or delivered,directly or indirectly, in Canada, or to, or for the benefitof, any resident thereof, in contravention of thesecurities laws of Canada or any Province or Territorythereof. Applicants for Shares will be required todeclare that they are not a resident of Canada and arenot applying for such Shares on behalf of any residentof Canada. Applicants will also be required to declarethat they are of legal age (as a matter of the law oftheir domicile and residence).

The distribution of this Prospectus and the offering ofShares of the Funds may be restricted in certain otherjurisdictions and it is the responsibility of any person inpossession of this Prospectus to inform himself of, andto observe, all applicable laws and regulations.Prospective applicants for Shares should informthemselves of the legal requirements of so applying andany applicable exchange control regulations andapplicable taxes in the countries of their citizenship,residence or domicile.

ENQUIRIES

Copies of this Prospectus, Transaction Forms and thedocuments specified herein may be obtained from theManager,

Scotiabank & Trust (Cayman) Ltd.6 Cardinall AvenueGrand CaymanCayman Islands, BWI

Telephone: (345) 949-2001Facsimile: (345) 949-7097Email: [email protected]

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SCOTIABANK & TRUST (CAYMAN) LTD.

Supplement to the Prospectus for the

SCOTIABANK MONEY MARKET FUND

SCOTIABANK US DOLLAR BOND FUND

SCOTIABANK GLOBAL GROWTH FUND

SCOTIABANK CANADIAN GROWTH FUND

SCOTIABANK US GROWTH FUND

The Scotiabank Money Market Fund, the Scotiabank US Dollar Bond Fund, the Scotiabank Global GrowthFund, the Scotiabank Canadian Growth Fund, and the Scotiabank US Growth Fund (hereinafter referred to as"the Funds"), have all been registered in Jamaica by the Financial Services Commission as overseas mutualfunds pursuant to the Securities (Mutual Fund) Regulations.

The principal place of business of the Funds in Jamaica is Scotia Centre, the corner of Duke and Port RoyalStreets in the City and Parish of Kingston. Copies of the Register of holders, the Memorandum and Articles ofAssociation, the most recent annual and half-yearly reports, the most recent Prospectus and the most recentaudited financial statements shall be available for inspection there during normal business hours on anybusiness day.

Shares in the Funds shall be available for purchase in Jamaica exclusively through Scotiabank Jamaica Trustand Merchant Bank Limited, a dealer registered under the Securities Act.

The Manager, the Custodians and Investment Advisors are all part of the Scotiabank Group and are all subsidiaries(either directly or indirectly) of the Bank of Nova Scotia in Canada. The Bank of Nova Scotia Jamaica Limitedand its subsidiaries are also a part of the Scotiabank Group. The Custodians are regulated institutions in theirrespective jurisdictions but are not registered as licensed banks or financial institutions in Jamaica.

Income earned by Jamaican investors in the Funds will be subject to income tax in accordance with theJamaican income tax laws applicable from time to time.

Warning:Approvals received from the Financial Services Commission do not constitute a guarantee by the Commissionas to the performance of the Funds or their creditworthiness. Furthermore, in giving such approvals theCommission shall not be liable for the performance or default of the Funds or for the correctness of anyopinions or statements expressed.

Investments in the Funds are not insured by the Jamaica Deposit Insurance Corporation.

Registered and Principal Office of the FundsThe offices of Scotiabank & Trust (Cayman) Ltd.6 Cardinall Avenue Grand Cayman Cayman Islands, BWI

Manager and Distributor Scotiabank & Trust (Cayman) Ltd.6 Cardinall AvenueGrand Cayman Cayman Islands, BWI

Investment AdvisorsScotia Cassels Investment Counsel LimitedOne Queen Street East, Suite 1200Toronto, Ontario Canada M5C 2W5

The Bank of Nova Scotia Trust Company (Bahamas)LimitedScotia House, 404 Bay StreetP.O. Box N-3016 Nassau, Bahamas

CustodiansThe Bank of Nova ScotiaScotia Plaza, 44 King Street WestToronto, Ontario Canada M5H 1H1

The Bank of Nova Scotia Trust Company (Bahamas)LimitedScotia House, 404 Bay StreetP.O. Box N-3016 Nassau, Bahamas

Auditors and Listing AgentPricewaterhouseCoopersStrathvale HouseNorth Church Street, P.O. Box 258 GTGrand Cayman Cayman Islands, BWI

Legal Advisors(as to Cayman Islands law)

Charles Adams, Ritchie & DuckworthZephyr House, 122 Mary StreetP.O. Box 709 GTGrand Cayman Cayman Islands, BWI

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Management andAdministration DirectoryTABLE OF CONTENTS PAGE

Management and Administration Directory ..............................................................................................1

The Funds.......................................................................................................................................................2

Investment Policy, Objectives and Restrictions ......................................................................................... 2

Dividend Policy ............................................................................................................................................. 4

Risk Factors ................................................................................................................................................... 4

Subscription, Registration, Redemption, Transfer and Conversion......................................................... 5

Valuations ..................................................................................................................................................... 7

Suspension and Compulsory Redemption ................................................................................................. 7

Management and Service Providers .......................................................................................................... 8

Fees and Charges ....................................................................................................................................... 10

Financial Information about the Funds.................................................................................................... 10

Taxation and Exchange Controls ............................................................................................................. 11

Regulation of the Funds in the Cayman Islands ..................................................................................... 12

General Information ..................................................................................................................................13

Material Contracts.......................................................................................................................................14

Documents for Inspection ......................................................................................................................... 14

Appendices:

I Directors................................................................................................................................................. 15

II Summary of Offering Memorandum of Scotiabank Mutual Funds,

SPC relating to the Scotiabank Global Diversified Value Equity Fund ........................................... 17

III Summary of Simplified Prospectus of Scotia American Stock Index Fund .......................................21

IV Transaction Forms ................................................................................................................................. 24

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Scotiabank Money Market Fund – an open-endedmulti-class investment company which wasincorporated in the Cayman Islands as an exemptedcompany with limited liability on October 27,1999.The initial class is denominated in US dollars (the"US Dollar Class") and the Directors have power tocreate further classes in the future each of whichmay be denominated in a different currency andmay have investment policies that differ from thoseof the US Dollar Class. The terms of eachsubsequent class will be specified in a class profile(the "Class Profile").

Scotiabank US Dollar Bond Fund – a US dollardenominated open-ended investment company,which was incorporated in the Cayman Islands as anexempted company with limited liability onDecember 21, 1992.

Scotiabank Global Growth Fund – a US dollardenominated open-ended investment company,which was incorporated in the Cayman Islands as anexempted company with limited liability on June 23, 1994.

Scotiabank US Growth Fund – a US dollardenominated open-ended investment company,which was incorporated in the Cayman Islands as anexempted company on October 27, 1999.

Scotiabank Canadian Growth Fund – a US dollardenominated open-ended investment company,which was incorporated in the Cayman Islands as anexempted company with limited liability on June 23, 1994.

(Each of the above is described in this Prospectusindividually as "a Fund" and collectively as "theFunds".)

Each of the Funds will offer Shares to subscribers onthe terms set out in this Prospectus, as supplemented,in the case of the Scotiabank Money Market Fund, byany subsequent Class Profiles.

INVESTMENT POLICIES AND OBJECTIVES

• Scotiabank Money Market Fund (US DollarClass) is designed to provide investors withprofessional management in a pooled investmentfund with an investment portfolio of short-termdebt securities providing safety and liquidity ofcapital. The US Dollar Class will invest in highquality debt securities and obligations issued bygovernments and corporations. The InvestmentPolicies and Objectives of other Classes createdsubsequent to the date hereof will be specified inthe relevant Class Profile.

• Scotiabank US Dollar Bond Fund is designed asa broad market investment grade U.S. Dollardenominated Bond Fund. It is intended forconservative investors seeking to improve thereturns over 3 to 5 years above what could beexpected from money market rates or US TreasuryBills. To achieve this result, the Manager seeks toobtain a total return, over the medium term, equalto, or greater than, a comparable-term US Dollardenominated bond fund and shall use as itsperformance benchmark the Merrill Lynch U.S.Corporate & Government Bond Index. The Fundwill invest primarily in US Dollar denominatedsecurities and obligations issued or guaranteed byForeign Governments and/or their agencies (ownedor sponsored) and investment grade corporations.These securities are to be rated A or better by S&Por Moody’s (or equivalent), though up to 25% ofthe Fund may be in securities rated BBB.

• Scotiabank Global Growth Fund is designed toprovide investors with an opportunity to achievelong-term capital growth through investing in highquality securities. The Fund may invest all orsubstantially all of its assets in the ScotiabankGlobal Diversified Value Equity Fund, a segregatedportfolio of Scotiabank Mutual Funds SPC, being anactively managed equity portfolio seeking toprovide long term growth by investing in adiversified portfolio of global equity securities thatare determined by the investment advisor, AllianceCapital Management L.P., to be undervalued.Information relating to Scotiabank Mutual FundsSPC and the Scotiabank Global Diversified ValueEquity Fund is contained in Appendix II, whichforms part of this Prospectus.

• Scotiabank US Growth Fund is designed toachieve long term growth through capitalappreciation by tracking the performance of the

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Investment Policy, Objectives & RestrictionsThe Funds

500 stocks which make up the Standard & Poor’s500 (S&P 500) Total Return Index. The Fund mayuse derivative instruments subject to therestrictions listed below. The Fund may invest allor substantially all its assets in Scotia AmericanStock Index Fund (provided it holds no more than25 per cent of the units in issue), an open-endedmutual fund trust established under the laws ofOntario, Canada by a Declaration of Trust datedDecember 13, 1996, as amended and restated,made by Scotia Securities Inc. of 40 King StreetWest, Toronto, Ontario M5H 1H1. Informationrelating to Scotia American Stock Index Fund iscontained in Appendix III, which forms part of thisProspectus. Under current Canadian taxregulations, distributions by the Scotia AmericanStock Index Fund to the Scotiabank US GrowthFund in respect of any realized gains from taxableCanadian property will be subject to fifteen percent withholding tax.

• Scotiabank Canadian Growth Fund is designedto achieve long-term capital growth throughinvesting in high quality equity securities listed onCanadian stock exchanges that are likely tobenefit from prevailing and anticipated economicconditions. Some high quality Canadian dollardenominated corporate paper and money marketinstruments may also be purchased. The Fundmay use derivative instruments subject to therestrictions listed below.

INVESTMENT RESTRICTIONS

The investment policies of each Fund include thefollowing restrictions on the investments that theManager is permitted to make:

Scotiabank Money Market Fund and Scotiabank USDollar Bond Fund are not permitted to:

(a) purchase securities on margin;

(b) sell securities short;

(c) purchase securities other than through normal market facilities unless the purchase price approximates the prevailing market price or is negotiated on an arm’s length basis;

(d) purchase or write options;

(e) enter into convertible hedge or any arbitrage transaction; or

(f) borrow money save for temporary borrowings not exceeding 5% of the Net Asset Value of each Fund.

Scotiabank Global Growth Fund, Scotiabank USGrowth Fund and Scotiabank Canadian Growth Fundare not permitted to:

(a) purchase securities on margin;

(b) purchase securities other than through normal market facilities unless the purchase price approximates the prevailing market price or is negotiated on an arm’s length basis;

(c) use derivatives unless sufficient cash or securities are available to cover positions;

(d) invest more than 10% of its assets (less any borrowings) in derivatives acquired for non-hedging purposes; or

(e) borrow money save for temporary borrowings not exceeding 5% of the Net Asset Value of each Fund.

No change will be made in the investment policiesand restrictions described above without givingShareholders at least 30 days prior notice in the formof a modification of, supplement to, or restatementof, this Prospectus. Although no specific restriction isincluded in the investment policies of the Funds, it isnot the intention of the Directors of any of theFunds to take management control of any issuer ofsecurities in which the Funds invest.

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It is not the present intention that the Funds willmake any distributions of income or capital gains byway of dividends. Income and net realised capitalgains will be reinvested and reflected in the Net AssetValue of the Shares of each Fund. Shareholderswishing to receive periodic payments from any of theFunds may give standing instructions to redeem aspecified number or value of Shares at regularintervals (see "Redemption").

Shareholders should note that the Articles providethat if dividends are declared, then any dividend orother amount payable to a Shareholder whichremains unclaimed six years from the date when itbecomes payable shall be forfeited automatically infavour of the relevant Fund.

Investing in any of the Funds is subject to certain riskfactors including, but not limited to the following:

• General Considerations. Investors shouldrecognise that each Fund has a particularinvestment objective and that investing in any orall of the Funds should not be considered as acomplete or balanced investment programme.

• Achievement of Objectives. There is noguarantee that any Fund will achieve itsinvestment objectives.

• Economic Conditions. The success of anyinvestment activity is affected by general economicconditions, which may be affected by the level andvolatility of interest rates and market prices.Unexpected volatility and illiquidity in the marketsin which any of the Funds have invested couldimpair the ability of such Funds to carry out theirbusiness or cause them to incur losses.

• Political and Regulatory Risks. The value of theassets of any Fund may be affected by uncertaintiessuch as international political developments,changes in government policies, taxation, restrictionson foreign investment on currency repatriation,

currency fluctuations, and other developments inthe laws and regulations of the countries in whichany of the Funds invests its assets.

• Suspension of Trading. Securities exchangestypically have the right to suspend or limit tradingin any particular instrument. Such a suspension orlimitation could render it impossible for theManager to liquidate investment and therebyexpose a Fund to losses.

• Liquidity Risks. Although the Shares aretransferable, subject to certain restrictions describedherein under "Transfer of Ownership", it is notanticipated that there will be an active secondarymarket in such Shares. Accordingly, any investmentin such Shares will normally be liquidated throughredemption rather than transfer.

• Conflicts of Interest. Instances may arise wherethe interests of the Manager and the InvestmentAdvisors or their affiliates conflict with theinterests of the Funds and their Shareholders.Such conflicts include, but are not limited to, thefact that the Manager and the Investment Advisorsmay be engaged in other substantial activitiesapart from the activities described in this Prospectusand may therefore devote to the Funds only suchtime as they consider reasonably necessary.Furthermore, the Funds may from time to timeinvest in products promoted by or assets owned bythe Scotiabank Group or its subsidiaries. It shouldalso be recognised that the terms upon which theManager and Investment Advisors were appointedhave not been negotiated at arm’s length.

• Multi-class Insolvency. Scotiabank MoneyMarket Fund is a multi-class mutual fund and theassets relating to each class of shares in issue willbe accounted for and valued separately. Underthe laws of the Cayman Islands the assets relatingto a particular class of shares are available to meetthe claims of creditors of the company as a whole.

• Control Risk. The Directors or Shareholders ofScotiabank Global Growth Fund and of ScotiabankUS Growth Fund may not be able to control theScotiabank Global Diversified Value Equity Fund orthe Scotia American Stock Index Fund respectively.

Additional risks are identified in the InformationRelating to the Global Diversified Value Fund onpage 28 and the Summary of Prospectus for theScotia American Stock Index Fund on page 29 ofthis Prospectus.

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Dividend Policy

Risk Factors

SUBSCRIPTION

Shares of the Funds are issued by the Manager at thecurrent subscription price determined by referenceto the Net Asset Value of the relevant Fund (see"Valuations") on the Dealing Day next followingreceipt of a signed Purchase Request Form and, forinitial applications only, a New Account Request Form(see Appendix IV). A Dealing Day is any day normallytreated as a Business Day (A Business day is any day onwhich banks are open for business) in the CaymanIslands, Toronto, New York or any other relevantjurisdiction or the next Business Day if it is a publicholiday in any relevant jurisdiction. The issue of Sharesis conditional upon the signed Application Form and ofcleared funds for such Shares having been receivedby or on behalf of the relevant Fund by the close ofbusiness in the Cayman Islands on the Business Dayimmediately preceding the relevant Dealing Day. NoShares of any Fund will be issued whilst the calculationof Net Asset Value is suspended.

Subscriptions for Shares should be made using thePurchase Request Form and, for initial applicationsonly, a New Account Request Form (see Appendix IV).A New Account Request Form is not required if asubscriber already holds Shares in one or more of theFunds. The Purchase Request Form and, if applicable,the New Account Request Form must be completedand signed by the Subscriber(s) and returned to theManager at the address given on the Form. Formswill be accepted by facsimile but the original signedForms must be forwarded promptly to the Managerand no redemption of such Shares will be alloweduntil the original New Account and Purchase RequestForms are received. Neither the Funds nor theManager nor any other agents of the Funds will beresponsible or liable in any way for any invalidity of thesignatures or any other errors arising from acceptanceof faxed Forms. No interest is credited or paid onsubscription monies pending the issue of Shares.

The Directors reserve the right to require at anytime satisfactory evidence of the status ofSubscribers as Qualified Holders, i.e. as beingentitled to acquire a holding in a Fund. The right isreserved to reject any application for Shares inwhole or part. If an application is rejected, thesubscription monies will be returned withoutinterest, at the risk and expense of the applicantwithin three business days of rejection.

The minimum initial aggregate investment in anyone or more of the Funds is US$5,000 or such other

amounts or currencies as may be prescribed fromtime to time by the Directors. Subscriptions foradditional Shares are subject to a minimum ofUS$1,000 in any one or more of the Funds, or suchother amounts or currencies as may be prescribedfrom time to time by the Directors. Subscriptionsmay take the form of a standing instruction tosubscribe for a specified number or value of Sharesat specified intervals. An appropriate form ofstanding instruction is available from the Manageron request. The Manager reserves the right toredeem the shares of any or all the Funds within anaccount and close the account if the value of theaggregate investments in any one or more of theFunds falls below the minimum initial investmentset out above.

With the exception of the Scotiabank Money MarketFund for which no initial or deferred charge ispayable, the Manager is entitled, at its discretion, toan initial or deferred charge of up to 5% of the totalamount paid by investors and all or a portion of theamount, if any, may be paid by the Manager as acommission to the Distributor of the Shares. The netsubscription amount, after deduction of the initialcharge, if any, will be invested in the designated Fund.

Scotiabank Money Market Fund is presentlycomprised of only one class of Share – the US DollarClass. However, the Directors of the Fund reservethe right to create other Classes of Shares in thefuture, each of which may be denominated in adifferent currency and may have differentinvestment policies and objectives from those of theUS Dollar Class. The assets relating to each Class willbe maintained in separate funds for accounting andvaluation purposes. A Class Profile will be publishedin respect of each additional Class of Shares.

REGISTRATION

Shares are issued in registered form and nocertificates will be issued unless specifically requestedby the holder. The Funds will issue an AccountTransaction Summary, which will act as confirmation ofpurchase. The advantage of an advice over a certificateis that Shares may be redeemed or transferredwithout the necessity of surrendering the certificate.If a certificate is requested, it will be sent at theShareholder's risk to the address appearing on theNew Account Request Form within 30 days of therelevant Dealing Day.

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Subscription, Registration,Redemption, Transfer & Conversion

PRE -AUTHORIZED CONTRIBUTIONS (PAC)

Following an initial investment of US$1,000, aninvestor may make regular purchases of Shares ofany Fund using automatic transfers from his or herScotiabank banking account to the Fund selected.Following the initial investment, an investor caninvest a minimum monthly amount of US$100, witha minimum of US$50 in each Fund. The Managerreserves the right to redeem the Shares of any or allFunds within an account and close the account if thevalue of the Funds within the account falls below theminimum initial investment for PACs set out above.

Such requests will be made on receipt of a completedand signed Pre-Authorized Contribution (PAC) PlanRequest Form (see Appendix IV). The same Formmay also be used to discontinue the PAC plan.

REDEMPTION

Shares of the Funds will be redeemed at the currentredemption price determined by reference to the NetAsset Value of the relevant Fund (see "Valuations")on the Dealing Day next following receipt of asigned Redemption Request Form (see Appendix IV).A Dealing Day is any day normally treated as aBusiness Day in the Cayman Islands, Toronto, NewYork or any other relevant jurisdiction or the nextBusiness Day if it is a public holiday in any relevantjurisdiction. The redemption of Shares is conditionalupon the Redemption Request Form for such Shareshaving been received by or on behalf of the relevantFund by the close of business in the Cayman Islandson the Business Day immediately preceding therelevant Dealing Day. Late receipt of a RedemptionRequest Form will result in the redemption beingdealt with on the next Dealing Day. No Shares of anyFund may be redeemed whilst the calculation of NetAsset Value is suspended.

Redemptions of Shares should be made using theRedemption Request Form (see Appendix IV). TheManager may decline to effect a redemption (unless itrelates to all of the Shares held by such Shareholder)if the aggregate redemption payment from theFunds as a whole would be less than US$1,000 or itsequivalent in other currencies or such other amountas the Directors may determine either generally or inany particular case. The Redemption Request Formmust be completed and signed by the holder andreturned to the Manager at the address given on theForm. Redemption Request Forms will be accepted

by facsimile but the original signed Forms must beforwarded promptly to the Manager. Neither theFund nor the Manager nor any other agents of theFund will be responsible or liable in any way for anyinvalidity of the signatures or any other errorsarising from acceptance of a redemption request byfacsimile. If a certificate has been issued for any ofthe Shares being redeemed, the certificate must bereturned to the Manager in order for theredemption request to be processed.

With the exception of the Scotiabank Money MarketFund Shares and interfund conversions, Shares thatare redeemed within 90 days of purchase may besubject to a redemption fee of up to 2% of theredemption amount.

Payment of redemption proceeds will normally bedispatched within seven business days after therelevant Dealing Day at the risk and expense of theholder. In the case of a joint share holding, if theredemption request does not provide expresspayment instructions, the Fund may make paymentto any of the joint holders.

Redemption requests, once given, may not be revokedwithout the Manager's approval, except during asuspension of valuations and redemptions. Redemptionrequests may take the form of a standing instructionto redeem a specified number or value of shares atspecified intervals. An appropriate form of standinginstruction is available from the Manager on request.

TRANSFER OF OWNERSHIP

For transfers of ownership, the transferor mustcomplete a Redemption Request Form (see AppendixIV) and the transferee must complete a New AccountRequest Form (see Appendix IV). Similarly, whenchanging names or subscriber type (for example byadding additional account holders or changing theholder to a company) on a Scotiabank Mutual Fundsaccount, it is necessary to close the current accountand open a new account.

The Directors may decline to register a transfer ofShare ownership:

(a) unless a fully completed instrument of transfer(together with certificate, if any) is depositedwith the Directors together with any otherevidence necessary to show the transferor’s rightto transfer, or

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(b) if the transferee and any person upon whosebehalf the transferee would hold them arerestricted persons (see "Distribution"), or

(c) unless, following registration, the holdings of thetransferee (and the transferor if such be the case)do not result in their being liable to be compulsorilyredeemed (see "Compulsory Redemption").

INTERFUND CONVERSION

Holders of Shares in one Fund may convert such Sharesto Shares in any of the other Scotiabank Fundsdescribed in this Prospectus or any subsequent ClassProfile. Such conversions will be made on receipt of acompleted and signed Interfund Request Form (seeAppendix IV) and are subject to a procedure similar tothat involved upon redemption. Administration chargesor sales fees may be charged on such conversions.

MAINTENANCE

Holders of Shares may change their registered particulars(other than ownership details) by notifying the Managerusing the Maintenance Request Form (see Appendix IV).

The Net Asset Values of the Funds will be determinedby the Manager at the close of business in the CaymanIslands on each Dealing Day in accordance with theprinciples set out in the respective Articles of Associationand in accordance with International AccountingStandards, as summarised below. The Net Asset Valuerepresents the market value of all assets less allliabilities of the relevant Fund on the Dealing Day.

The valuation principles followed by the Funds maybe summarized as follows:

(a) Securities listed upon a public stock exchange ortraded through an inter-dealer market are valuedat their latest sales price on the principal exchangeon the Dealing Day. Securities not traded on thatdate are valued at the latest average of the closingrecorded bid and ask prices. In the event that

any of the securities are no longer so listed ortraded, such securities will be valued on the basisof the market quotation for similar securitieswhich, in the opinion of the Manager, most closelyreflects their fair market value;

(b) Short-term debt instruments with maturities ofless than 90 days are valued at amortised cost,which approximates market value. Other short-term debt instruments with maturities exceeding90 days, are valued on a mark-to-market basis,until such time as they reach a remainingmaturity of 90 days, whereupon they shall bevalued using the amortised cost method, takingas cost their market value on the 91st day.

(c) Other securities for which market quotations arenot readily available are valued at their fairvalue using methods which are in accordancewith recognised accounting principles and whichhave been approved by the Manager.

(d) Subject to the approval of the Directors, theManager may depart from the normal valuationprinciples if they appear to be inapplicable orunfair in the circumstances.

The subscription and redemption prices for Sharesare calculated by taking the Net Asset Value of therelevant Fund on the relevant Dealing Day anddividing it by the number of Shares in issue ordeemed to be in issue.

SUSPENSION

The determination of Net Asset Value may besuspended by the Directors for the whole or part ofa period during which:

(a) by reason of the closure or suspension of tradingon any money market or stock exchange or overthe counter market or for any other reason, theDirectors consider it not reasonably practicablefor the investments of any Fund to be realised ordisposed of or for the Net Asset Value of all orany class of Shares to be fairly determined;

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Valuations

Suspension & Compulsory Redemption

(b) as a result of an emergency state of affairs, thereasonable disposal of securities of any Fundbecomes impracticable or there exist circumstanceswhich the Directors deem will cause material harmor serious prejudice to the relevant Shareholders;

(c) (c) there is a breakdown in the means normallyemployed by the Directors in ascertaining thevalue of investments or for any other reason suchDirectors consider that they cannot ascertain thevalue of such investments or other assets of theFunds at the valuation point on the day appointedfor settlement of the transaction in question; or

(d) the Directors deem it impracticable to transfermoneys of or for any Fund at normal exchangerates at any time.

Any such suspension shall be publicised by the Fundin such manner as the Directors may think fit, shallbe communicated immediately to the CaymanIslands Stock Exchange, and shall take effect at suchtime as such Directors shall declare but not laterthan the close of business in the Cayman Islands onthe business day next following such declaration.Thereafter there shall be no determination of theNet Asset Value of such Fund until the Directorsshall declare the suspension at an end except thatthe suspension shall terminate, in any event, on thefirst business day on which:

(i) The condition giving rise to the suspension shallhave ceased to exist; and

(ii) No other condition under which suspension isauthorised shall exist.

During any suspension of valuation, the subscriptionand redemption of Shares will also be suspended;and any unprocessed redemption requests may bewithdrawn during the period of suspension; anysuch suspension shall be communicated immediatelyto the Cayman Islands Stock Exchange.

COMPULSORY REDEMPTION

The Funds may compulsorily redeem Shares at thecurrent redemption price, in certain circumstancesincluding, but not limited to, the following:

(a) the redemption value of the Shares held by aShareholder is less than US$1,000 in aggregateover all the Funds or such other amount orcurrency as the Directors may determine eithergenerally or in any particular case or;

(b) it comes to the notice of the Manager that Sharesare owned directly or beneficially in breach ofany law or requirement of any country orgovernmental authority or that any person is notqualified to hold such Shares directly or beneficiallyby virtue or such law or requirement or that therelevant Shareholder has refused or failed toprovide satisfactory evidence that such Sharesare not being held in breach of such law orrequirement; or

(c) it comes to the notice of the Manager thatcontinued direct or beneficial ownership of anyShares might result in pecuniary or financialdisadvantage to any Fund or any of its agents orany of its Shareholders.

Scotiabank Group

The Manager, the Investment Advisors and theCustodians are all part of the Scotiabank Group andhave extensive experience and a successful trackrecord in carefully managing the investments oftheir clients. The history of the Scotiabank Groupdates back to 1832; it is one of the five largestbanks in Canada and among its leading financialinstitutions with over US$229 billion in assets, andover seventeen hundred branches and offices insome fifty countries as at the date hereof. Ascompanies and personnel within Scotiabank Groupdirect, control and manage the Funds and act as theirCustodian, the operations of the Funds may give riseto conflicts of interest or duty. The Articles ofAssociation of each Fund contain provisions enablingthe Directors to act notwithstanding such conflicts.

Directors of the Funds

Details of the Directors of the Funds are set out inAppendix I, which forms part of this Prospectus.

The Directors of each Fund may appoint additionalDirectors from time to time and any Director may beremoved by a resolution of the holder of theManagement Shares of each Fund, which, in each

8

Management& Service Providers

case, is the Manager. There are no service contractsbetween any Fund and its respective Directors andnone of the Directors is entitled to receive any fee orremuneration from any Fund for serving as one of itsDirectors. The Articles of Association of the Fundsprovide for their management and administration tobe delegated to the Manager, subject to the overallsupervision of their Directors.

Manager

By agreements dated December 29, 1992, June 24,1994 and November 1, 1999, respectively, the Fundshave appointed Scotiabank & Trust Company(Cayman) Ltd. as Manager to manage the affairsand investments of the Funds subject to the overallsupervision and control of the Board of Directors ofeach Fund. The Manager has an unrestricted mutualfund administrator’s licence issued under the MutualFunds Law (2003 Revision).

The Manager was incorporated under the laws ofthe Cayman Islands on August 27, 1965. Details ofthe Directors of the Manager are set out inAppendix I, which forms part of this Prospectus.

The Manager has responsibility for the generaladministration of each Fund, and, as such, will keepthe books of account, calculate the Net Asset Valueof the Shares (based on valuations provided by theInvestment Advisors), deal with communications andqueries from investors and deal with subscriptions,redemptions, transfers and conversions in respect ofeach Fund. The Manager is at liberty to providesimilar or other services to other funds and companies.

The Manager is entitled to receive a monthlymanagement fee computed by reference to thevaluations of the net assets of each Fund and isentitled to receive a sales commission in respect ofthe issue of Shares (see "Fees and Charges"). TheManagement Agreement may be terminated on sixtydays' written notice by either the Manager or the Fund.

Investment Advisors

By agreements dated June 24, 1994 and April 8, 1996Scotia Cassels Investment Counsel Limited ("ScotiaCassels") has been appointed Investment Advisor tothe Scotiabank US Dollar Bond Fund and ScotiabankCanadian Growth Fund. Scotia Cassels is a Toronto,Canada based professional investment and portfolio

management firm established in August 1998(through the amalgamation of Scotia InvestmentManagement Limited and Cassels Blaikie InvestmentCounsel Limited) that actively manages private andcorporate investment portfolios, pension funds andother segregated funds on a fully discretionary basis.Scotia Cassels and its predecessor companies havemanaged assets in Canada since 1877. Scotia Cassels isnow one of the largest investment managers inCanada, with more than US$14 billion of client fundsunder management at the date hereof.

By an agreement dated November 1, 1999, TheBank of Nova Scotia Trust Company (Bahamas)Limited ("Scotiatrust Bahamas"), a companyincorporated under the laws of the Bahamas onDecember 30, 1957, has been appointed asInvestment Advisor to Scotiabank Money MarketFund. Scotiatrust Bahamas may from time to timeappoint sub-advisors. Scotiatrust Bahamas providesglobal wealth management services and is the HeadOffice of the Scotiatrust Offshore Group of companies.Scotiatrust Bahamas has more than US$8.9 billion ofassets under administration at the date hereof.

Details of the Directors of both Investment Advisorsare set out in Appendix I, which forms part of thisProspectus.

Subject to such terms and conditions as the Directorsof each Fund may from time to time impose, theInvestment Advisors are responsible to each Fundfor investment management and advice and havepower to enter into transactions on behalf of eachFund. The Investment Advisors are at liberty toprovide similar or other services to other funds orcompanies. The Investment Advisors will receive feesfrom the Management Fee payable by each Fund to theManager. Each Investment Advisory Agreement maybe terminated on sixty days' written notice by eitherthe respective Investment Advisor or by the Fund.

Custodians

By agreements dated December 29, 1992 and June 24,1994, The Bank of Nova Scotia, a chartered bankincorporated under the Bank Act of Canada in 1871,has been appointed Custodian to the Scotiabank USDollar Bond Fund, Scotiabank Global Growth Fundand the Scotiabank Canadian Growth Fund. TheCustodian provides a full range of banking, globalcustody and financial services to a worldwide clienteleand will hold the assets and uninvested cash of each of

9

the said Funds, either directly or through sub-custodians,nominees or agents.

The Bank of Nova Scotia Trust Company (Bahamas)Limited has been appointed Custodian to ScotiabankMoney Market Fund and Scotiabank US Growth Fund byagreements dated November 1, 1999 and November13, 2002 respectively under which it will hold theassets and uninvested cash of the said Funds, eitherdirectly or through sub-custodians, nominees or agents.

In each case, the Custodians may receive fees out ofthe Management Fee payable by each Fund to theManager. Each of the Custodian Agreements may beterminated on sixty days' written notice by therespective Custodian or Fund.

Indemnification

The terms of appointment of the Manager, InvestmentAdvisors and Custodians provide that such appointeesshall be indemnified against all claims, liabilities,expenses and like matters, except in thosecircumstances pursuant to fraud, willful deceit orgross negligence. The Directors and Officers of theFunds have the benefit of corresponding provisionsin the Articles of Association of the Funds.

Under the Management Agreements, the Manager isentitled to a fee at the annual rate which will notexceed 0.60% of the Net Asset Value of ScotiabankMoney Market Fund, US Dollar Class (for the fee for allother Scotiabank Money Market Fund Classes, pleaserefer to the relevant Scotiabank Money Market FundClass Profile), 0.75% of the Net Asset Value of ScotiabankUS Dollar Bond Fund, 1.50% of the Net Asset Value ofScotiabank US Growth Fund and Scotiabank CanadianGrowth Fund and 2.00% of the Net Asset Value ofScotiabank Global Growth Fund. All such fees areaccrued weekly and paid monthly in arrears. Out ofthese fees, the Manager is required to pay the fees ofthe Investment Advisors, Custodians and any otherperson to whom functions are delegated by theManager.

In the case of the Scotiabank Global Growth Fund andof the Scotiabank US Growth Fund, the managementfee noted above includes any corresponding feescharged by the managers of the Scotiabank GlobalDiversified Value Equity Fund and the Scotia AmericanStock Index Fund respectively, in which such Fundsmay invest all or substantially all of their assets.

Under the Distributorship Agreement, the Manageris entitled to any initial charges (see "Subscription"),but will be responsible for any fees and commissionspayable by the Funds to distributors of Shares and forpromotional costs, including this Prospectus and anymodifications, supplements or restatements of it. TheManager is also entitled to retain any redemption feescharged on the Redemption of Shares (see"Redemption").

Each Fund will be responsible for its operationalexpenses including, but not limited to, annual filingand registration fees, audit fees, legal fees, intereston borrowed money and any tax to which it maybecome subject.

With the exception of the Scotiabank Money MarketFund Shares and interfund conversions, Shares thatare redeemed within 90 days of purchase may besubject to a redemption fee of up to 2% of theredemption amount.

There are no fees or remuneration paid from theFunds to their Directors.

No change will be made in the arrangementsdescribed above concerning the Managers’ fees and theexpenses of the Funds without giving Shareholders atleast 30 days prior notice in the form of a modification,supplement or restatement of this Prospectus.

Financial Statements

Each of the Funds will prepare annual financialstatements in accordance with InternationalAccounting Standards. The financial statements willbe audited by the Auditors in accordance withInternational Standards on Auditing.

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Financial Information about the Funds

Fees & Charges

Copies of the most recent audited financialstatements of the Funds are available from theManager (see "Documents for Inspection").

Quarterly Reporting

Each Shareholder receives a quarterly report showingthe number and value of his Shares in each Fundtogether with a brief report on the performance ofeach Fund.

Annual Reporting

Copies of the audited financial statements of eachFund will normally be available to the Shareholderswithin 120 days of the end of each financial year.The financial year-end of each Fund is December 31in each year. In the case of the Scotiabank GlobalGrowth Fund, the audited financial statements ofthe Scotiabank Global Diversified Equity Fund (inwhich it may invest all, or substantially all, its assets)will be annexed to its own financial statements. Inthe case of the Scotiabank US Growth Fund, theaudited financial statements of the Scotia AmericanStock Index Fund (in which it may invest all, orsubstantially all, its assets) will be annexed to itsown financial statements.

Borrowings, loan capital and contingentliabilities

As at the date hereof, none of the Funds had anyoutstanding loan capital or loans made to it, anyother borrowings or indebtedness, and anyoutstanding contingent liabilities or guarantees.

Net Asset Values

The Net Asset Value per Share of each Fund (exceptas otherwise specified in the relevant Class Profile)are publicised on Bloomberg, published in localpapers (where applicable) and are available on theCayman Islands Stock Exchange website(www.csx.com.ky) immediately upon calculation.

Cayman Islands

The Cayman Islands impose no taxes on income,profits, capital gains, or appreciations of the Fundsnor are holders of Shares subject to any taxes in theCayman Islands in the nature of income, capitalgains, inheritance, wealth or capital transfer orother taxes, as a result of holding such Shares as atthe date hereof. The Funds have applied for andobtained undertakings from the Government of theCayman Islands that, for a period of twenty yearsfrom the date thereof, no tax hereafter introducedon profits, income, gains or appreciation, or by wayof estate duty or inheritance tax would apply tosuch Funds or their Shares.

Scotiabank Money Market Fund and Scotiabank USDollar Bond Fund will endeavour not to invest in anysecurity, which may give rise to withholding or othertax in the United States of America or Canada, or anyother jurisdiction in which the Funds might invest.

No stamp duty is levied by the Government of theCayman Islands on the issue, transfer or redemptionof shares. No withholding taxes are payable in theCayman Islands on dividends or other distributionsor on redemptions of Shares.

There are no exchange controls and no otherrestrictions on the transfer of funds to and from theCayman Islands as at the date hereof.

General

The above information is general information onlyand does not constitute any form of tax advice ordirections to any investor in the Funds. Prospectiveinvestors not resident in the Cayman Islands shouldconsult their own professional advisors on thepossible tax, regulatory or exchange controlconsequences in any relevant jurisdiction ofacquiring, holding, redeeming or selling Shares.

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Taxation and Exchange Controls

The Funds are regulated under the Mutual FundsLaw (2003 Revision) of the Cayman Islands andqualify as regulated mutual funds by virtue ofhaving a licensed mutual fund administrator(Scotiabank & Trust (Cayman) Ltd.) to provide theFunds’ principal office in the Cayman Islands.Among other requirements, every regulated mutualfund must have an annual audit of its financialstatements by an auditor approved by the CaymanIslands government; and a copy of the auditedfinancial statements must be filed with the CaymanIslands Monetary Authority ("CIMA") within sixmonths of the financial year-end. The Mutual FundsLaw also gives CIMA various regulatory and remedialpowers. There is no compensation scheme in theCayman Islands for investors in mutual funds.

As regulated mutual funds, the Funds will be subjectto the supervision of CIMA, which may at any timeinstruct any Fund to have its accounts audited andto submit them to CIMA within such time as CIMAspecifies. In addition, CIMA may ask the Directors togive CIMA such information or such explanation inrespect to such Funds as it may reasonably requireto carry out its duty under the Mutual Funds Law.The Directors on request must also give CIMA accessto or provide at any reasonable time all recordsrelating to such Funds and CIMA may copy or take anextract of a record it is given access to or is provided.Failure to comply with any of these requests byCIMA may result in substantial fines being imposedon any such Fund and may result in CIMA applyingto the court to have such Fund wound up.

CIMA is prohibited by the Mutual Funds Law fromdisclosing any information relating to the affairs ofa mutual fund it has acquired in the course of itsduties or in the exercise of its functions other thandisclosure required for the effective regulation of amutual fund or when required or permitted to doso by a court or under any other law.

CIMA may take certain actions if it believes that aregulated mutual fund is or is likely to becomeunable to meet its obligations as they fall due or iscarrying on or is attempting to carry on business oris winding up its business voluntarily in a mannerthat is prejudicial to its investors or creditors. Thepowers of CIMA include, inter alia, the power torequire the substitution of any Director of a Fund,to appoint a person to advise the Fund on theproper conduct of its affairs or to appoint a personto assume control of the affairs of the Fund. There

are also other remedies available to CIMA includingthe ability to apply to the Grand Court of theCayman Islands for an order to take such otheraction as it considers necessary to protect theinterests of investors in, and creditors of, the Fundand, subsequently, to take any other actionprovided for under the Mutual Funds Law.

Pursuant to the provisions of the MonetaryAuthority Law (2003 Revision) (the "MAL") CIMAmay require the Company or a connected person(including a director of a Fund) or a personreasonably believed to have information relevant toan enquiry by CIMA to provide or produce suchspecified information or documents as CIMA mayreasonably require in connection with the exerciseof its statutory functions or in response to a requestby an overseas regulatory authority. Subject tocertain safeguards contained in the MAL, CIMA maydisclose to an overseas regulatory authorityinformation necessary to enable that authority toexercise its regulatory functions.

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Regulation of the Funds in the Cayman Islands

Capitalization

The authorised share capital of Scotiabank MoneyMarket Fund is divided into 1000 ManagementShares of par value US$1.00 each, 100,000,000Redeemable Preferred Shares of par value US$0.01each, classified as the "US Dollar Class" and200,000,000 unclassified Redeemable PreferredShares of par value US$0.01 each. The Directors ofthe Scotiabank Money Market Fund may from timeto time create additional Classes of RedeemablePreferred Shares and may allocate such number ofunclassified shares to such additional Classes as theythink fit.

The authorised share capital of Scotiabank US DollarBond Fund, Scotiabank Global Growth Fund andScotiabank US Growth Fund respectively is dividedinto 1000 Management Shares of par value US$1.00each and 100,000,000 Redeemable Preferred Sharesof par value US$0.01 each.

The authorised share capital of Scotiabank CanadianGrowth Fund is divided into 1000 ManagementShares of par value Cdn$1.00 each and 100,000,000Redeemable Preferred Shares of par value Cdn$0.01each.

The issued share capital, if any, of the above Fundsat the most recent financial year-end is disclosed intheir respective financial statements (see"Documents for Inspection").

Management Shares

The Management Shares of each Fund which carryfull voting rights but no rights to participate in theprofits or assets of such Funds (other than thereturn of their par value in the event of liquidation),have been issued to the Manager.

Redeemable Preferred Shares

The Redeemable Preferred Shares (referred to in thisProspectus as "Shares") confer no voting rights andno entitlement to receive notice of, or attend at,general meetings of the relevant Funds. The Sharescarry the right to participate in dividends and allother distributions of such Funds (subject only to thereturn of the par value of the Management Sharesin the event of liquidation).

The Articles of Association of each Fund prohibit thealteration of such Articles (including the rightsattached to the Shares) which would be materiallyprejudicial to the holders of Shares until after notless than 30 days written notice has been given tosuch holders, specifying the intended alteration oramendment and drawing the attention ofShareholders to their rights to request theredemption of their Shares.

Place of Business

The principal place of business of the Funds is at theoffices of the Manager in George Town, GrandCayman and no place of business has beenestablished in any other country.

Litigation

No litigation or claims against any of the Funds orinitiated by any of the Funds are known to theDirectors or Manager as at the date hereof.

Liquidation of the Funds

The Manager, as the holder of the issuedManagement Shares of the Funds, has the power toplace any of the Funds in liquidation. However, aFund will not be liquidated before at least 90 days’written notice of such liquidation is given to theFund’s Shareholders. Upon liquidation, the netassets of a Fund after paying off all liabilities wouldbe distributed by the liquidator to the holders ofthe Redeemable Preferred Shares, subject only tothe return of the par value of the ManagementShares.

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General Information

The following contracts which are or may be materialhave been entered into by each of the Funds withentities within the Scotiabank Group otherwise thanas a result of arm’s length negotiations:

(a) Management Agreements, under which theManager provides administrative, secretarial andregistration services, and is entitled to receivethe payments detailed under "Fees andCharges". The Management Agreements may beterminated by either party giving to the othernot less than sixty days’ written notice;

(b) Investment Advisory Agreements, under whichinvestment advice is provided by the InvestmentAdvisors. Under the terms of the InvestmentAdvisory Agreements, the Investment Advisorsare entitled to receive directly from the Managera share of the payments detailed under "Fees andCharges". The Investment Advisory Agreementsmay be terminated by either party giving to theother not less than sixty days’ written notice;

(c) Custodian Agreements, under which theCustodians have custody of the securities andcash accounts of the Funds either directly orthrough sub-custodians, agents or nominees.Under the terms of the Custodian Agreements,the Custodians may be entitled to receive directlyfrom the Manager a share of the paymentsdetailed under "Fees and Charges". TheCustodian Agreements may be terminated byeither party giving to the other not less thansixty days’ written notice;

(d) Distributorship Agreement, under which theDistributor is responsible for the promotion andmarketing of the Funds; and

(e) Listing Agreement, under which the ListingAgent acts for the Funds in connection with thelisting of their Shares on the Cayman IslandsStock Exchange. The Agreement may beterminated by either party giving to the othernot less than sixty days’ written notice.

Copies of the following documents are availablefrom the Manager or may be inspected during usualbusiness hours at the offices of the Manager in theCayman Islands:

(a) the Memorandum and Articles of Association ofthe Funds;

(b) the agreements appointing the Manager,Investment Advisors, Custodians, Distributor andListing Agent in respect of each Fund;

(c) the most recent Prospectus (including, in the caseof Scotiabank Global Growth Fund, the mostrecent offering memorandum of ScotiabankMutual Funds, SPC which incorporates theScotiabank Global Diversified Value Equity Fundand of Scotiabank US Growth Fund, the mostrecent Simplified Prospectus of Scotia AmericanStock Index Fund) and Transaction Form in respectof each Fund; and

(d) the most recent audited financial statements ofeach Fund (including, in the case of ScotiabankGlobal Growth Fund, the audited financialstatements of Scotiabank Global Diversified ValueEquity Fund and of Scotiabank US Growth Fund,the audited financial statements of ScotiaAmerican Stock Index Fund)

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Documentsfor InspectionMaterial Contracts

APPENDIX I – DIRECTORS

The Funds

The Directors of the Funds are as follows:

Name and Country of Residence Position held in the Scotiabank Group

John Fletcher; Cayman Islands Manager, Fiduciary Services, Scotiabank & Trust (Cayman) Ltd.

J. Rory MacDonald; Canada Chairman, Scotiatrust Bahamas

Gunther A. Merk; Bahamas Senior Manager, Investment Services, Scotiatrust Bahamas

Muzaffar M. Soomro; Cayman Islands Manager, Fund Services, Scotiabank & Trust (Cayman) Ltd.

Farried Sulliman; Cayman Islands Managing Director, Scotiabank & Trust (Cayman) Ltd.

The Manager

The Directors of the Manager are as follows:


Christopher A. Barnes; England Director of Scotiabank & Trust (Cayman) Ltd.

Bruce John; Cayman Islands Manager, Commercial Banking, Scotiabank & Trust (Cayman) Ltd.



Appendices

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The Investment Advisors

The Directors of Scotia Cassels Investment Counsel Limited (“Scotia Cassels”) are as follows:


J. Christopher Barron; Canada Chairman and Director, Scotia Cassels

John R. Bright; Canada Managing Director, Institutional Clients, Scotia Cassels

Christopher Hodgson; Canada Executive Vice President, Wealth Management, Scotiabank

Jill Pepall; Canada Managing Director, Chief Investment Officer, Scotia Cassels

Derrick Strizic; Canada President, Scotia Cassels and Managing Director and Head

of Investments Wealth Management, Scotiabank

Catherine Welling; Canada Managing Director and Head of Private Client and Field

Support, Scotia Cassels

The Directors of The Bank of Nova Scotia Trust Company (Bahamas) Limited (“Scotiatrust Bahamas”) are as follows:

Name and Country of Residence Position held in Scotiabank Group

Anthony C. Allen; Bahamas Managing Director, Bank of Nova Scotia International Limited

Christopher A. Barnes; England Director, Scotiatrust Bahamas

Ian D. Fair; Bahamas Director, Scotiatrust Bahamas

Ernest C. Grindrod; Bahamas Director, Scotiatrust Bahamas


Ian S. Steers; England Director, Scotiatrust Bahamas

Dana C. Wells; Bahamas Director, Scotiatrust Bahamas

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APPENDIX II – SUMMARY OF OFFERINGMEMORANDUM OF SCOTIABANKMUTUAL FUNDS, SPC RELATING TO THESCOTIABANK GLOBAL DIVERSIFIEDVALUE EQUITY FUND CLASS OFPARTICIPATING SHARES

Scotiabank Global Growth Fund may invest all, orsubstantially all, its assets in the Scotiabank GlobalDiversified Value Equity Fund, a class ofparticipating shares in the capital of ScotiabankMutual Funds, SPC. In consequence ScotiabankGlobal Diversified Value Equity Fund may be amaster fund for which Scotiabank Global GrowthFund acts as a feeder fund and this Appendixcontains the information required to be disclosed bythe Listing Rules of the Cayman Islands StockExchange ("CSX") in respect of master funds. Part Aof the Appendix contains general corporateinformation pertaining to Scotiabank Mutual Funds,SPC and Part B contains information relatingspecifically to the Scotiabank Global DiversifiedValue Equity Fund class of participating shares inwhich Scotiabank Global Growth Fund may invest.

PART A – CORPORATE INFORMATION RELATINGTO SCOTIABANK MUTUAL FUNDS, SPC

1. Incorporation.

Scotiabank Mutual Funds, SPC was incorporated inthe Cayman Islands as a multi-class segregatedportfolio company on 2nd September 2002 withregistration number CR-119702 and was registeredas an open-ended mutual fund pursuant to Section4(3) of the Mutual Funds Law of the Cayman Islandson 16th September 2002 with licence number 5900.

2. Share Capital

The authorised share capital of Scotiabank MutualFunds, SPC is US$50,000 divided into 4,999,000participating shares of par value US$0.01 each and100 ordinary shares of par value US$0.01 each.Three classes of participating shares are currently inissue, including the Scotiabank Global DiversifiedValue Equity Fund class. Shares of all classes areissued fully paid only.

3. Cayman Stock Exchange (CSX) Listing

All classes of participating shares in the capital ofScotiabank Mutual Funds, SPC, including ScotiabankGlobal Diversified Value Equity Fund, are listed onthe CSX.

4. Segregated Portfolios

The assets attributable to each class of participatingshares in the capital of Scotiabank Mutual Funds,SPC are held in separate segregated portfolios.Under Cayman Islands law, assets of one segregatedportfolio are not available to meet the liabilities ofanother segregated portfolio.

5. Registered Office

The registered office of Scotiabank Mutual Funds,SPC is 6 Cardinall Avenue, Grand Cayman, CaymanIslands, BWI.

6. Service Providers

The service providers, legal advisors, auditors andlisting agent of Scotiabank Mutual Funds, SPC are asfollows:

Manager:Scotiabank & Trust (Cayman) Ltd.6 Cardinall AvenueGrand CaymanCayman Islands, BWI

Investment Advisor:Alliance Capital Management L.P.1345 Avenue of the AmericasNew York, NY 10105USA

Custodian:The Bank of Nova Scotia44 King Street WestToronto, OntarioM58 1H1, Canada

Distributor:Scotiabank & Trust (Cayman) Ltd.6 Cardinall AvenueGrand CaymanCayman Islands, BWI

Auditors and Listing Agent:PricewaterhouseCoopersStrathvale HouseSouth Church StreetP.O. Box 258 GTGrand CaymanCayman Islands, BWI

Legal Counsel (as to Cayman law):Charles Adams, Ritchie & DuckworthZephyr House122 Mary StreetP.O. Box 709 GTGrand CaymanCayman Islands, BWI

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8. Manager

Scotiabank & Trust (Cayman) Ltd. has been appointedas Manager to manage the affairs and investmentsof Scotiabank Mutual Funds, SPC and its segregatedportfolios, including the segregated portfoliocorresponding to Scotiabank Global DiversifiedValue Equity Fund. The Manager was incorporatedunder the laws of the Cayman Islands on 27thAugust 1965 and has held an unrestricted MutualFund Administrator’s Licence issued under theMutual Funds Law of the Cayman Islands since 1994.The Manager is part of the Scotiabank Group andhas extensive experience and a successful trackrecord. The Manager has responsibility for thegeneral administration of Scotiabank Mutual Funds,SPC and will keep the books of account, calculate thenet asset value of the participating shares of eachclass, deal with communications and queries frominvestors and process subscriptions, redemptions andtransfers in respect of each class of participatingshares. Under the Management Agreement, theManager is entitled to a management fee computedby reference to the net asset value of each segregatedportfolio which, in the case of Scotiabank GlobalDiversified Value Equity Fund, will be calculated atan annual rate of up to 1.5% of the net asset valueof the segregated portfolio related to that class. TheManager is required to pay out of the managementfee, the fees of the Investment Advisor, Custodianand any other person to whom the Manager hasdelegated functions. The Management Agreementmay be terminated by either party giving not lessthan 90 days’ written notice.

9. Investment Advisor

Alliance Capital Management L.P. has been appointedas Investment Advisor to the segregated portfolioscorresponding to each class of participating shares,including Scotiabank Global Diversified Value EquityFund. The Investment Advisor is a global investmentadvisor supervising client accounts with assets inexcess of US$400 billion. The Investment Advisor’sgeneral partner, Alliance Capital ManagementCorporation, is an indirect wholly owned subsidiaryof AXA Financial, Inc., which is itself a wholly ownedsubsidiary of AXA Group, a French financial servicesgroup. The Investment Advisor is responsible forproviding investment management and advice forthe Scotiabank Global Diversified Value Equity Fundand has power to enter into transactions on its behalf.The Investment Advisor will be remunerated out ofthe management fee payable to the Manager. TheInvestment Advisory Agreement may be terminatedby either party giving not less than 90 days’ writtennotice and will be terminated immediately on thetermination of the appointment of the Manager.

10. Custodian

The Bank of Nova Scotia ("Scotiabank") has beenappointed as Custodian to the segregated portfolioscorresponding to each class of participating shares,including the Scotiabank Global Diversified ValueEquity Fund. Scotiabank provides a full range ofbanking, custody and financial services to a worldwideclientele and will hold the assets and uninvested cashof the Scotiabank Global Diversified Value EquityFund either directly or through sub-custodians,nominees or agents. Scotiabank, originally incorporated

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7. Directors

The current Directors of Scotiabank Mutual Funds, SPC are as follows:

Name and residency Position held in the Scotiabank Group

John Fletcher; Cayman Islands Manager, Fiduciary Services, Scotiabank & Trust (Cayman) Ltd.


Gunther A. Merk; Bahamas Senior Manager, Investment Services, Scotiatrust Bahamas

Muzaffar M. Soomro; Cayman Islands Manager, Fund Services, Scotiabank & Trust (Cayman) Ltd.


There are no service contracts in existence between Scotiabank Mutual Funds, SPC and its Directors and noneof the Directors are entitled to receive any fee or remuneration.

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in 1832, operates in more than fifty countries and hasover US$100 billion in assets under administration onbehalf of its clients. The Custodian will be remuneratedout of the management fee payable to the Manager.The Custodian Agreement may be terminated beeither party on 90 days’ written notice.

11. Articles of Association

The Articles of Association of Scotiabank MutualFunds, SPC contain the following provisions:

(a) Rights of Holders of Participating Shares:participating shares entitle the holder to receivenotice of, attend and (except in respect of anymotion to change the name of the company) voteat meetings of shareholders. The participatingshares have the right to participate equally in anydividends declared by the company in respect ofthe segregated portfolio to which such participatingshares related and are redeemable at the optionof the holder at a redemption price equal to thenet asset value per share for the time being ofthe relevant segregated portfolio. In the eventof the winding-up of the company, each holderof a participating share is entitled to a return ofthe paid-up par value and a pro-rata share in thesurplus assets of the relevant segregated portfolio.The rights attached to each class of share may bevaried only with the consent in writing of theholders not less than three fourths of the issuedshares of the relevant class or by a specialresolution at a class meeting.

(b) Director’s Interests: a Director may vote inrespect of any contract, arrangement or othermatter which may be proposed, notwithstandinghe has an interest in it, provided the nature ofthe interest shall have been disclosed to theother Directors prior to the relevant resolution.

(c) Remuneration of Directors: subject to anydirection given by the shareholders in generalmeeting, the Directors have power to determinetheir own remuneration.

(d) Borrowing Powers: the Directors have power toborrow money and to mortgage or charge theproperty of the company.

(e) Changes in Capital: the Directors have power toallot and dispose of unissued shares of thecompany and to determine the class in whichsuch shares shall be issued but have no power tochange the authorised share capital of the company.

12. Litigation

The Directors are not aware of any litigation or claimsagainst or initiated by Scotiabank Mutual Funds, SPC.

13. Taxation

Under current legislation in the Cayman Islands, no taxeswill be imposed upon Scotiabank Mutual Funds, SPCor its shareholders by the Cayman Islands Governmentand there are no exchange control laws or regulationsin effect. Scotiabank Mutual Funds, SPC has obtainedan undertaking from the Governor in Counsel of theCayman Islands that, for a period of twenty years fromthe date of the undertaking, no law which is enactedin the Cayman Islands imposing any tax to be leviedon profits or interests or gains or appreciation shallapply to the company or its operations and that nosuch tax or any tax in the nature of estate duty orinheritance tax shall be payable on the shares,debentures or other obligations of the company.

14. Financial Information

Unaudited quarterly reports are sent to each shareholderof Scotiabank Mutual Funds, SPC within thirty days ofthe relevant quarter end. Audited financial statementsof Scotiabank Mutual Funds, SPC, including the financialstatements of Scotiabank Global Diversified Value EquityFund, will normally be sent to each shareholder no laterthan six months after each financial year-end. All financialreports of Scotiabank Mutual Funds, SPC are prepared inaccordance with International Financial ReportingStandards except in respect of the deferral and amortisationof organisational expenses. The most recent auditedfinancial statements of Scotiabank Mutual Funds, SPC areavailable from the Manager on request.

15. Indemnification

The terms of appointment of the Manager, InvestmentAdvisor and Custodian provide that such appointees shallbe indemnified against all claims, liabilities, expenses andlike matters, except in those circumstances pursuant tothe fraud, wilful deceit or gross negligence of therelevant service provider. The Directors and officers ofthe company have the benefit of correspondingprovisions in the articles of association.

16.Documents available for inspection

Copies of the following documents are available from ormay be inspected during the usual business hours at theoffices of the Manager in the Cayman Islands:

(a) Offering Memorandum;

(b) Articles of Association of Scotiabank MutualFunds, SPC;

(c) Material contracts with service providers; and

(d) Audited financial statements and unaudited quarterlyreports of Scotiabank Mutual Funds, SPC, including theScotiabank Global Diversified Value Equity Fund class.

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PART B – INFORMATION RELATING TO SCOTIABANKGLOBAL DIVERSIFIED VALUE EQUITY FUND

1. Investment Policy, Objectives and Restrictions

The investment objective of Scotiabank GlobalDiversified Value Equity Fund is to provide long-termcapital growth by investing in a diversified portfolioof global equity securities that are determined by theInvestment Advisor to be undervalued. ScotiabankGlobal Diversified Value Equity Fund emphasises stockselection based on a fundamental value approach ofthe Investment Advisor’s Bernstein InvestmentManagement and Research Unit. In selectingsecurities for Scotiabank Global Diversified ValueEquity Fund the Investment Advisor uses itsfundamental research to identify companies whoselong-term earnings power is not reflected in thecurrent market price of their securities. In order tohedge a portion of currency risk, Scotiabank GlobalDiversified Value Equity Fund may from time to timeinvest in currency futures contracts or currency forwardcontracts and may at times use certain types ofinvestment derivatives such as options, futures,forwards and swaps. The Directors may change or varythe investment objectives, policies and restrictions ofScotiabank Global Diversified Value Equity Fund atany time on giving not less than thirty days’ noticeto shareholders. The investment policy of ScotiabankGlobal Diversified Value Equity Fund does notprohibit it from taking management control of anyunderlying investments but the Directors do notintend to take any such control.

2. Terms of Participating Shares

The Articles of Association of Scotiabank MutualFunds, SPC contain the following provisions:

(a) Redemptions: participating shares may beredeemed on the dealing day next followingreceipt by the Manager of a signed redemptionrequest. A dealing day is any business day in theCayman Islands or New York. The Directors maysatisfy all or part of the redemption price in specie.

(b) Compulsory Redemption: the Directors maycompulsorily redeem all of the participating sharesheld by a shareholder if as a result of a redemptionrequest the value of participating shares held by ashareholder is reduced to less than US$50,000 or itcomes to the attention of the Directors thatparticipating shares are held by, or on behalf of, aperson who is not an eligible investor. The Directorsmay also compulsorily redeem all the participatingshares in issue of the Scotiabank Global DiversifiedValue Equity Fund if: the net asset value is less than5 million dollars on four consecutive valuation

days; the Investment Advisor notifies the Managerthat the investment objective is no longer reasonablyachievable; or any law is passed which renders itillegal or impracticable to continue operations.

(c) Net Asset Value: the net asset value ofparticipating shares is determined by the Manageron each valuation day by ascertaining the valueof the assets of the segregated portfoliocorresponding to the Scotiabank GlobalDiversified Value Equity Fund and deductingfrom such amount the liabilities relating to suchsegregated portfolio. The net asset value perparticipating share of the Scotiabank GlobalDiversified Value Equity Fund is calculated bydividing the net asset value by the number ofparticipating shares in issue on the relevantvaluation day. The net asset value per participatingshare is the resulting sum rounded to the nearestcent. A valuation day is the business dayimmediately preceding a dealing day.

(d) Suspension of Valuation, Issue or Redemption ofParticipating Shares: the Directors may suspend thevaluation, issue or redemption of participatingshares of the Scotiabank Global Diversified ValueEquity Fund for the whole or part of a periodduring which:

(i) by reason of the closure or suspension of trading on any money market or stock exchange or over the counter market or for any other reason the Directors consider it notreasonably practicable for the investments ofthe segregated portfolio to be realised or disposed of or for the net asset value of the participating shares to be fairly determined;

(ii) as a result of an emergency state of affairs, the reasonable disposal of securities of the segregated portfolio becomes impracticable or there exists circumstances which the Directors deem will cause material harm or serious prejudice to the relevant shareholders;

(iii) there is a breakdown in the means normally employed by the Directors in ascertaining the value of investments or for any other reason the Directors consider that they cannot ascertain the value of such investments or other assets of the segregated portfolio at thevaluation point on the day appointed for settlement of the transaction in question; or

(iv) the Directors deem it impracticable to transfermonies of or for the segregated portfolio at normal exchange rates at any time.

(e) Conversion between Classes: holders ofparticipating shares of any class may freelyconvert such shares to the number ofparticipating shares of any other class calculatedby reference to the prevailing price per share ofsuch classes.

3. Dividend Policy

The Directors do not anticipate that any dividends willbe paid to shareholders of Scotiabank Global DiversifiedValue Equity Fund out of its distributable profits and it isthe present intention of the Directors that all such profitswill be reinvested.

4. Risk Factors

(a) Investor Control: although participating sharesgenerally have voting rights, the Directors of orinvestors in Scotiabank Global Growth Fund maynot be able to control the Scotiabank GlobalDiversified Value Equity Fund.

(b) Multi Class Insolvency: although as a segregatedportfolio the assets of Scotiabank GlobalDiversified Value Equity Fund will not be availableunder Cayman Islands law to meet the liabilitiesof any other segregated portfolio, ScotiabankMutual Funds, SPC is a single legal entity whichmay operate and have assets held on its behalf inother jurisdictions and there is a risk that theassets attributable to one segregated portfoliomay be exposed to the liabilities of another if thecourts of any such jurisdiction do not recognisesuch segregation. The Directors are not presentlyaware of any such jurisdictions.

(c) Conflicts of Interest: instances may arise wherethe interests of the Manager and the InvestmentAdvisor or their affiliates conflict with theinterests of Scotiabank Global Diversified ValueEquity Fund and its shareholders. Such conflictsinclude, but are not limited to, the fact that theManager and the Investment Advisor may beengaged in other substantial activities and maytherefore devote to Scotiabank Global DiversifiedValue Equity Fund only as much time as isreasonably necessary in their judgement for theirrespective duties. It should also be understoodthat the Management Agreement has not beennegotiated at arm’s length and that it is unlikelythat the Manager will be replaced.

5. Net Asset Value Per Share

The current net asset value per share of the ScotiabankGlobal Diversified Value Equity Fund is available on thewebsite of the Cayman Islands Stock Exchange atwww.csx.ky where it is listed under ticker symbolSCBGDVE KY.

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APPENDIX III – SUMMARY OF THESIMPLIFIED PROSPECTUS OF SCOTIAAMERICAN STOCK INDEX FUND

Scotiabank US Growth Fund may invest all, orsubstantially all, its assets in Scotia American StockIndex Fund (formerly the National Trust U.S. IndexFund) an open-ended mutual fund trust establishedunder the laws of Ontario, Canada by a Declarationof Trust dated December 13, 1996, as amended andrestated on November 30, 2000 by Scotia SecuritiesInc. (the "Trustee" and "Manager"). The followinginformation is a summary of the informationcontained in the Simplified Prospectus of ScotiaAmerican Stock Index Fund and the terms andconditions of the Declaration of Trust.

Investment Policy, Objectives and Restrictions.

The objective of the Scotia American Stock IndexFund is to provide Unit holders with long-termgrowth of capital by investing primarily in US equitysecurities to track the performance of a generallyrecognized index of US equity securities (the"Recognised US Index"), currently being TheStandard & Poor’s 500 Total Return Index. The ScotiaAmerican Stock Index Fund will invest in thesecurities that are included in the Recognised USIndex in substantially the same proportion as theyare adjusted in the Recognised US Index. The ScotiaAmerican Stock Index Fund’s portfolio will thereforebe rebalanced with a frequency and degree ofprecision that seeks to track the Recognised USIndex as closely as possible, consistent withminimizing trading costs.

The Scotia American Stock Index Fund has adoptedthe standard investment restrictions and practicesprescribed by National Instrument 81- 102 publishedby the Canadian Securities Administrators. TheScotia American Stock Index Fund will not takemanagement control of any issuer of securities inwhich it invests. The Scotia American Stock IndexFund may use derivatives in accordance withapplicable securities regulations. Derivatives maynot be used for speculation or to create a portfoliowith excessive leverage. The Scotia American StockIndex Fund may not borrow money except as atemporary measure for the purpose of accommodatingrequests for the redemption of Units and providingsuch borrowings do not exceed 5% of the Net AssetValue of the Fund taken at market value at the timeof borrowing.

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Distribution Policy

Distributions by the Scotia American Stock IndexFund will be made to Unitholders on specified dates.In addition, the Manager of the Scotia AmericanStock Index Fund may make other distributions toUnitholders at its discretion. Net income andrealised capital gains (after deduction of any lossescarried forward) are distributed by the ScotiaAmerican Stock Index Fund annually in December ofeach calendar year to Unitholders of record no earlierthan the last business day before the distribution.

Distributions will be automatically reinvested inadditional Units of the Scotia American Stock IndexFund based on the net asset value per unit at therelevant time unless Unitholders have requested inwriting to receive cash distributions in lieu ofreinvestment.

Risk Factors

The value of investments made by the ScotiaAmerican Stock Index Fund will vary with prevailingmarket conditions. Fluctuations in the value of theinvestment portfolio will affect the Net Asset Valueof Units and there is no assurance as to the amountsthat will be returned to Unitholders on theredemption of their Units.

The main risks of investing in this fund are currency,index, liquidity, concentration and equity risk:

Currency RiskWhen a mutual fund buys an investment that isdenominated in a foreign currency, changes in theexchange rate between that currency and theCanadian dollar will affect the value of the fund.

Concentration RiskSome mutual funds concentrate their investments ina single industry, country or geographic area. Thisallows them to focus on the potential of thatparticular industry, country or area. Other funds, suchas index funds, may be permitted to concentratemore of their assets in one or more securities than isusually permitted for mutual funds. This allowsthem to more accurately track the performance oftheir target index. Mutual funds that concentratetheir investments tend to have greater fluctuationsin price than funds with broader diversification. Thisis because they invest in fewer securities, which tendto be affected by the same factors.

Liquidity RiskLiquidity is a measure of how quickly an investmentcan be sold for cash at a fair market price. If a fund

can’t sell an investment quickly, it may lose moneyor make a lower profit, especially if it has to meet alarge number of redemption requests. In generalinvestments in smaller companies, smaller marketsor certain sectors of the economy tend to be lessliquid than other types of investments. The lessliquid an investment the more its value tends tofluctuate.

Equity RiskFunds that invest in equities, such as commonshares, are affected by changes in the generaleconomy and financial markets, as well as by thesuccess or failure of the companies that issued thesecurities. When stock markets rise, the value ofequity securities tend to rise. When stock marketsfall, the value of equity securities tend to fall.

Index RiskSome mutual funds have an investment objectivethat requires them to duplicate the investmentportfolio of a particular index. Depending onmarket conditions, one or more of the securitieslisted in that index may account for more than 10% ofthe net assets of the fund. As an index mutual fund,and the index it tracks, become less diversified, theindex mutual fund is exposed to greater concentrationand liquidity risks, and may become more volatile

Manager and Service Providers

The Manager is responsible for the overallmanagement of the business and affairs of theScotia American Stock Index Fund. Under the termsof the Management Agreement dated October 24,1998 as amended, the Manager may engage agentsto perform administrative functions and engagebrokers or dealers in connection with the investmentportfolio transactions of the Scotia American StockIndex Fund. The Management Agreement may beterminated upon sixty days' written notice by theManager or after a Unitholders' meeting approvingthe termination..

State Street Global Advisors, Ltd. (the "InvestmentAdvisor") has been appointed to provide investmentadvice to the Scotia American Stock Index Fund. TheInvestment Advisor is a Montreal, Canada basedprofessional investment and management firm andis an industry leader in the development of indexfunds and is one of the world's largest managers ofboth US and non-US indexed strategies withapproximately $900 billion in indexed investmentsunder management.

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The Bank of Nova Scotia, a chartered bankincorporated under the Bank Act of Canada in 1871,has been appointed Custodian to Scotia AmericanStock Index Fund by an agreement dated October 24,1998 as amended and restated on January 31, 2001.The Custodian provides a full range of banking,global custody and financial services to a worldwideclientele and will hold the assets and uninvested cashof Scotia American Stock Index Fund either directlyor through sub-custodians, nominees or agents.

Fees and Expenses

The Manager receives a management fee equal toor less than 0.80% of the Net Asset Value of theScotia American Stock Index Fund. Managementfees are calculated and payable daily.

Reductions in management fees may be negotiatedbetween the Manager and certain Unitholders.Such reductions are paid by the Scotia AmericanStock Index Fund and are currently effected throughadditional distributions of units of the ScotiaAmerican Stock Index Fund. These reductions areintended to attract large investments, which mightnot otherwise be invested in the Scotia AmericanStock Index Fund. The Manager may discontinuethese reductions at any time upon written notice tothe investor or his agent. The Scotia American StockIndex Fund reserves the right to vary from time totime the method by which such reductions areeffected.

The Scotia American Stock Index Fund pays its ownexpenses including commissions and brokerage feeson the purchase and sale of portfolio securities, taxes,charges for registry and transfer agency services,dividend crediting services, interest expense, auditand legal fees, custodianship charges, and the costs ofpreparing and sending annual and semi-annualreports and other required information to Unitholders.

Conflicts of Interest

As companies and personnel within the ScotiabankGroup direct, control and manage Scotia AmericanStock Index Fund and act as its Custodian, theoperations of the Fund may give rise to conflicts ofinterest or duty.

Financial Information about the Fund

Audited financial statements of Scotia AmericanStock Index Fund are currently provided to

Unitholders within 140 days following the Fund’sfinancial year-end. The annual financial statementsare prepared in accordance with Canadian generallyaccepted accounting principles and are audited bythe auditors in accordance with Canadian generallyaccepted auditing standards. The most recentaudited financial statements of Scotia AmericanStock Index Fund are available as noted (see"Documents for Inspection").

Terms of the Units

(a) Valuations: The Units are valued by the Trusteeon each day (the "Valuation Day") that theToronto Stock Exchange is open for business.The Net Asset Value per Unit is equal to themarket value of the trust property less the totalliabilities of the Scotia American Stock IndexFund divided by the total number of Unitsoutstanding at the relevant time.

(b) Redemptions: The Trustee may redeem Units atthe option of the Unit holder at the Net AssetValue per Unit on the next Valuation Dayfollowing receipt of the redemption request.

(c) Payment on redemption: Payment on redemptionwill normally be made by cheque or such othermethod of payment approved by the Trustee.The Trustee may elect to make payment in specieby delivery of securities or other assets to theinvestor in which case the Trustee has completediscretion to determine the assets to be distributedand their values, determined on a reasonablebasis, for distribution purposes.

(d) Compulsory redemptions: The Trustee mayrequire Unitholders to redeem Units on givingthe Unitholder ten days’ prior notice if theaggregate value of the Units held by aUnitholder is less than the minimum amountspecified in the Simplified Prospectus of theScotia American Stock Index Fund.

(e) Suspension of Valuation and Redemption: TheTrustee may suspend or postpone the valuationand redemption of Units with, where necessary,the prior consent of the Ontario SecuritiesCommission, and may postpone the payment ofredemption proceeds provided such suspensionor postponement complies with the law.

(f) Transfer of Units: Units of the Fund are nottransferable, but Unitholders may redeem Unitsas noted above.

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General Information

Each Unitholder of Scotia American Stock IndexFund is bound by the terms and conditions of theDeclaration of Trust and has a beneficial interest inthe Net Assets comprising the Fund. The Units areredeemable at the option of the Unit holder. TheScotia American Stock Index Fund may be terminatedat any time by the Trustee and will be terminated,in certain circumstances, if a successor Trustee is notappointed within a designated time. On termination,the Unitholders will participate pro-rata in the NetAssets of the Scotia American Stock Index Fund. TheTrustee may be removed by the Manager provided asuccessor Trustee has been appointed either by theManager or by resolution of the Unitholders.

The Trustee has power to amend the provisions ofthe Declaration of Trust provided, where approval ofUnitholders is required under securities regulations,such amendment is approved by at least a majorityof the votes cast in person or by proxy at a meetingof the Unitholders called for the purpose.

Litigation

No litigation or claims against the Scotia AmericanStock Index Fund or initiated by the Scotia AmericanStock Index Fund is known to the Trustee or Managerof Scotiabank US Growth Fund as at the date hereof.

Material Contracts

By agreements dated October 24, 1998, as amendedthe Trustee acts as Manager, Registrar and TransferAgent and Distributor and The Bank of Nova Scotiaacts as Custodian of the assets of the ScotiaAmerican Stock Index Fund.

Documents for Inspection

Copies of the following documents are availablefrom the Manager of Scotiabank US Growth Fund ormay be inspected during usual business hours at theoffices of the Manager in the Cayman Islands:

(a) The Declaration of Trust in respect of ScotiaAmerican Stock Index Fund;

(b) The agreements appointing the Manager,Registrar and Transfer Agent, Custodian andPrincipal Distributor of the Scotia American StockIndex Fund;

(c) The most recent Simplified Prospectus of theScotia American Stock Index Fund; and

(d) The most recent audited financial statementsand unaudited semi-annual financial statementsof the Scotia American Stock Index Fund.

APPENDIX IV – TRANSACTION FORMS

Any person wishing to subscribe for Shares in any ofthe Funds, redeem all or part of their holding ofShares in any of the Funds, convert Shares from oneFund to another Fund, transfer Shares to a thirdparty or amend their registered particulars shouldcomplete and sign the appropriate Form listedbelow and return it to the Manager. Copies of theForms are attached.

Forms may be submitted by facsimile provided theoriginals are forwarded by airmail or courier. If Sharecertificates are held in respect of the Shares to beredeemed, they must be returned at the same timeas the Redemption Request Form and failure to doso may delay the redemption of the related Shares.

Forms:

New Account Request Formto be completed by all new investors includingpersons purchasing Shares from existing investors

Purchase Request Formto be completed by all investors including personspurchasing Shares from existing investors

Redemption Request Formto be completed whenever Shares are to be redeemed

Interfund Request Formto be completed when an investor wishes to convertShares held in a Fund to Shares in any other Fund

Maintenance Request Formto be completed whenever a holder of Shares wishesto amend his or her registered particulars excludingdetails of ownership

Pre Authorized Contribution (PAC) Plan Request FormTo be completed when ever a shareholder wishes tocommence /or stop their PAC plan.

Forms should be signed after completion andforwarded to:

Scotiabank & Trust (Cayman) Ltd.6 Cardinall Avenue

Grand CaymanCayman Islands, BWI

Telephone (345) 949-2001Facsimile: (345) 949-7097

PROSPECTUS - Scotiabank...Grand Cayman Cayman Islands, BWI Legal Advisors (as to Cayman Islands law)...

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