Investment Objective

The objective of this fund is to provide a relatively stable and consistent rate of return through a portfolio of Canadian bonds.

Fund Details

• Fund Inception: December 1, 1996
• Net Assets: $144.8 million
• Term: 8.7
• Duration: 6.2
• Yield: 4.5
• Avg. Quality: AA
• Primary Investments: Bonds
• Distributions: Monthly as required
• RRSP eligible

Growth of $1,000†

Asset Mix

Annual Returns to September 30 (%)
1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
2.1	6.1	8.6	9.1	8.2	4.5	5.9	3.9	1.8	5.1
Annualized Returns to September 30, 2008 (%)
Qtr*	6 mo*	1 yr	2 yr	3 yr	4 yr	5 yr	6 yr	7 yr	10 yr
-0.4	-0.9	5.1	3.5	3.6	4.2	4.3	4.9	5.5	5.5

†Growth is calculated based on compounded monthly returns.
*Performance for the quarter and 6 months to September 30 represent the actual total return of the funds for the period, and are not annualized.

The Integra Bond Fund invests in a broad range of Canadian federal and provincial governments bonds and high-quality corporate bonds. An important characteristic of bond funds is that they tend to move in the opposite direction as interest rates. When interest rates drop, bond funds tend to perform very well. Conversely, when interest rates rise, bond funds tend to perform poorly.

Lincluden Management - Credit Analysis & Yield Spreads
Oakville, founded 1982, managing $2.8 billion.

Continued concerns in world financial markets were the driving force behind a steepening of the yield curve in Canada as short yields declined and longer term yields were unchanged to higher. The failure and forced nationalization or merger of eight sizeable U.S. institutions in a single quarter constitutes the largest financial system collapse in U.S. history. Adding fuel to the fires of fear was the subsequent delays of a U.S. bill to come to the aid of financial markets. In this environment apprehension drove investors to seek the safety of government T-bills. As a consequence spreads on corporate bonds increased quite rapidly driving the overall return slightly into negative territory.

State Street Global Advisors - Enhanced Core/Active Bond Manager
Montreal, founded 1978, managing $1.9 trillion.

The DEX Universe Bond Index posted a -0.37% negative total return for the third quarter of 2008 while 10 year Government of Canada yields remained virtually unchanged to close the quarter yielding 3.72%. This negative market return can be largely attributed to the underperformance of the corporate sector which lagged the Federal index by 1.81% for Q3 while aggregate corporate spreads continued to deteriorate to end the quarter at their widest levels in over 20 years. The market action over the quarter remains consistent with our view that the ramifications of the sub-prime crisis still remain to be fully understood by investors and will remain a source of volatility over the foreseeable future.

All performance is presented in Canadian dollar terms, gross of investment management fees. Past performance is not indicative of future results.