Market Update: Broad Market Returns and Indicators

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1 Market Update Eckler Ltd. collects information directly from sources believed to be reliable. Eckler Ltd. does not guarantee or warrant the accuracy, timeliness, or completeness of the information either collected, sourced or otherwise provided and is not responsible for any errors, omissions, uses and interpretations. 1

2 Sep-09 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Jan-10 Feb-10 Apr-10 May-10 Jul-10 Aug-10 Oct-10 Nov-10 Jan-11 Feb-11 Apr-11 May-11 Jul-11 Aug-11 Oct-11 Nov-11 Jan-12 Feb-12 Apr-12 May-12 Jul-12 Aug-12 Oct-12 Nov-12 Jan-13 Feb-13 Apr-13 May-13 Jul-13 Aug-13 Oct-13 Nov-13 Jan-14 Feb-14 Apr-14 May-14 Market Update: Broad Market Returns and Indicators YTD 3 Year 5 Year 10 Year S&P/TSX Composite 6.41% 12.86% 28.65% 7.60% 11.01% 8.77% S&P/TSX Small Cap 9.36% 18.04% 36.22% 2.74% 14.06% 5.12% S&P 500 ($C) 1.64% 7.54% 26.54% 20.61% 16.83% 5.36% MSCI EAFE ($C) 0.54% 5.17% 25.51% 11.83% 9.88% 4.53% MSCI World ($C) 1.28% 6.58% 25.98% 15.66% 13.04% 4.84% MSCI ACWI ($C) 1.46% 6.58% 24.87% 14.06% 12.35% 5.05% MSCI Emerging Markets ($C) 3.07% 6.72% 16.48% 3.39% 7.73% 9.77% FTSE TMX Canada 91-Day T-Bill Index 0.30% 0.52% 1.06% 1.01% 0.85% 2.01% FTSE TMX Canada Universe Bond Index 1.99% 4.82% 5.33% 4.81% 5.19% 5.55% FTSE TMX Canada Long Term Bond Index 3.82% 9.14% 7.65% 7.49% 8.05% 7.65% FTSE TMX Canada Short Term Bond Index 0.68% 1.75% 3.22% 2.79% 3.16% 4.07% FTSE TMX Canada Corporate Bond Index 1.79% 4.79% 6.13% 5.76% 6.59% 6.14% CAD/USD 3.53% -0.37% -1.54% -3.34% 1.72% 2.30% Sources: evestment Alliance, PC Bond Analytics, Bank of Canada Overview The Canadian equity market, as represented by the S&P/TSX Composite Index, rose 6.4% during the second quarter of 2014 with nine of the ten sectors displaying positive returns. Gains were lead by strong performance in the Energy and Industrials sectors. U.S. equity markets rose 5.2% in U.S. dollar terms during the quarter as all ten sectors saw gains. Increased consumer spending and improving manufacturing activity helped to bolster returns. The S&P 500 ($C) Index was up a modest 1.6% during the quarter as the Canadian dollar strengthened. Continued robust demand for bonds combined with low interest rates helped the Canadian bond market rise 2.0% during the second quarter. Long-term bonds posted the best returns, rising 3.8%, while corporates modestly outperformed federal bonds. International equities, as represented by the MSCI EAFE ($C) Index, rose 0.5% during the quarter as Central banks globally remained in a stimulative mode. Modest gains were largely due to positive returns in Europe and Japan. The Canadian dollar rose 3.5% against the U.S. dollar during the quarter. Canada s unemployment rate was 7.1% at the end of June; up 0.2% from the end of March. Year-over-year inflation of 2.4% is on the higher end of the Bank of Canada s target range of 1 to 3%. The U.S. Federal Reserve and Bank of Canada held their overnight rates steady in the second quarter at % and 1.0% respectively. 4.0% 3.0% 2.0% 1.0% -1.0% -2.0% Inflation (Measured by CPI) Overnight Rates Source: Bank of Canada Quarterly Year over Year Sources: Bank of Canada, Federal Reserve Board BoC Fed 2

3 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Yield (%) Market Update: Canadian Fixed Income Performance By Sector Overview The relationship between the yield to maturity and the term to maturity is outlined in the chart below. The June 2014 federal government yield curve was marginally flatter than the March 2014 curve as shorterdated yields remained relatively flat while longer-dated yields declined. 8.0% 6.0% 4.0% 2.0% 2.0% 5.3% 1.5% 3.8% 6.5% 2.8% 2.7% 7.0% 1.8% 6.1% June 2013 March 2014 June 2014 Canadian Yield Curve FTSE TMX Universe Federal Provincial Municipal Corporate Performance By Term mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr Source: Bank of Canada Term 9.0% 7.0% 5.0% 3.0% 1.0% -1.0% -3.0% 7.7% 6.4% 3.8% 3.2% 2.1% 1.0% 0.7% 0.2% 91 Day Treasury Bill Short (1-5 years) Mid (5-10 years) Long (10 + Years) "A" Corporate Yield Spread vs. Federals 9.0% 6.0% 3.8% 3.0% 1.5% Performance By Quality 6.4% 4.2% 2.1% 2.2% 0.9% 7.7% Federal AAA/AA A BBB Corporates 3

4 Sep-09 Market Update: Canadian Equities 4 Overview Nine of the ten sectors within the S&P/TSX Composite Index rose over the second quarter of Top performing sectors included Energy (10.47%), Industrials (9.44%), Materials (6.36%) and Information Technology (6.34%) Smaller cap stocks outperformed larger cap stocks during the quarter as investor confidence strengthened. Sector Returns -25% -5% 15% 35% 55% 6.41% S&P/TSX Composite 28.65% 2 1 Large Cap vs. Small Cap S&P/TSX Composite less S&P/TSX Small Cap Large Wins Energy (27.1%) Materials (12.3%) Industrials (7.9%) 10.47% 6.36% 19.50% 9.44% 36.40% 34.54% -1-2 Small Wins Consumer Discretionary (5.3%) 4.54% 27.54% -3-4 Consumer Staples (2.6%) 2.77% 18.63% Source: evestment Alliance Quarterly Year over Year Health Care (2.8%) Financials (33.7%) -6.60% 5.60% 32.72% 28.49% Top 5 Stocks Q2 Return Contribution to TSX Return SUNCOR ENERGY 17.85% 0.58% BANK OF NOVA SCOTIA 11.10% 0.49% CANADIAN NATURAL RESOURCES 15.72% 0.41% CANADIAN NATIONAL RAILWAY 11.74% 0.34% TORONTO-DOMINION BANK 5.98% 0.32% Bottom 5 Stocks Q2 Return Contribution to TSX Return VALEANT PHARMACEUTICALS -7.22% -0.18% CAMECO % -0.10% AGRIUM -9.26% -0.08% ROGERS COMMUNICATIONS -6.27% -0.06% YAMANA GOLD -9.30% -0.04% Info Technology (1.8%) Telecommunications (4.5%) Utilities (1.9%) Sources: TD Securities 6.34% 28.28% 0.88% 19.05% 1.26% 9.93% Sources: TD Securities, Yahoo Finance

5 Sep-09 Sep-09 July 2010 October 2010 January 2011 April 2011 July 2011 October 2011 January 2012 April 2012 July 2012 October 2012 January 2013 April 2013 July 2013 October 2013 January 2014 April 2014 Market Update: Foreign Equities U.S. Equities International Equities Global Equities -10% 0% 10% 20% 30% 40% 1.64% S&P % % MSCI EAFE 25.51% % MSCI World 25.98% Energy (10.9%) 8.27% 30.73% Energy (7.3%) 7.42% 33.41% Energy (10.1%) 8.02% 31.61% Materials (3.5%) 2.00% 34.66% Materials (8.0%) -0.23% 25.25% Materials (5.7%) 0.94% 26.59% Industrials (10.5%) 0.31% 30.59% Industrials (12.7%) -1.24% 24.63% Industrials (11.2%) -0.41% 26.34% Consumer Discretionary (11.8%) -0.03% 22.04% Consumer Discretionary (11.9%) -0.29% 21.78% Consumer Discretionary (11.9%) -0.24% 21.88% Consumer Staples (9.5%) 1.08% 17.01% Consumer Staples (11.1%) 2.28% 18.89% Consumer Staples (9.7%) 1.52% 17.18% Health Care (13.3%) 0.95% 32.11% Health Care (10.5%) 1.78% 27.95% Health Care (11.7%) 1.09% 29.90% Financials (16.1%) -1.19% 21.00% Financials (25.3%) -1.11% 23.30% Financials (20.6%) -0.71% 21.89% Info Technology (18.8%) 2.88% 33.60% Information Technology (4.4%) -2.53% 20.94% Information Technology (12.3%) 1.72% 31.55% Telecommunications (2.4%) 0.24% 6.77% Telecommunication Services (4.9%) 0.03% 34.49% Telecommunication Services (3.5%) -0.03% 23.34% Utilities (3.2%) 4.10% 24.10% Utilities (3.9%) 2.95% 28.26% Utilities (3.3%) 3.29% 24.40% Sources: TD Securities Source: Pyramis Global Advisors Source: Pyramis Global Advisors Growth vs. Value ($US) Russell 1000 Growth less Russell 1000 Value Large Cap vs. Small Cap ($US) S&P 500 less Russell 2000 $US per $Cdn % 1 5.0% -5.0% -1 Growth Wins Value Wins 1 5.0% -5.0% % Large Wins Small Wins $1.10 $1.05 $1.00 $0.95 $0.90 $0.85 Quarterly Year over Year Quarterly Year over Year Source: Russell Investments Sources: evestment Alliance, Russell Investments Source: Bank of Canada 5

6 Proportion of Fund Searches Market Update: Emerging Markets and Alternatives Emerging Markets % MSCI Emerging Markets 16.48% 6.34% Energy (10.8%) 15.25% 0.32% Materials (8.8%) 13.30% 2.03% Industrials (6.5%) 18.06% Cons. Discretionary 0.60% (9.1%) 22.50% 0.54% Cons. Staples (8.2%) 2.09% Real Assets YTD 2 Year 3 Year 4 Year 5 Year IPD Canada Annual Property Index ($C) 1.50% 3.40% 9.50% 11.38% 12.53% 12.76% 11.00% NCREIF Farmland Index ($US) 1.73% 4.18% 17.18% 18.60% 18.31% 16.45% 14.20% NCREIF Timberland Index ($US) 1.08% 2.70% 9.92% 9.64% 6.73% 5.14% 3.33% YTD 2 Year 3 Year 4 Year 5 Year S&P/TSX Capped REIT ($C) 3.93% 9.94% 10.01% 4.34% 8.86% 14.51% 19.03% EPRA/NAREIT Global Real Estate Index ($C) 4.10% 12.48% 15.48% 16.86% 13.77% 15.53% 15.31% Source: evestment Alliance, Investment Property Database Commodities ($US) Change Commodity 1-Year Gold 3.01% 8.03% Silver 6.35% 8.00% Copper 5.77% 4.41% Crude Oil 3.73% 9.12% Natural Gas 2.06% 25.13% Potash 6.94% % Source: TD Securities Health Care (1.8%) Financials (27.0%) Info Tech (17.3%) Telecom. Services (7.0%) Utilities (3.6%) 4.41% 2.50% 2.75% 4.78% Source: Dimensional Fund Advisors 7.40% 6.83% 11.94% 19.45% 22.62% 37.25% Hedge Funds ($US) YTD 3 Year 5 Year HFN Hedge Fund Aggregate Index 2.02% 3.39% 9.34% 4.54% 6.76% HFN Long/Short Equity Index 1.51% 2.94% 12.47% 6.34% 7.95% HFN Market Neutral Equity Index 0.78% 2.32% 6.36% 3.84% 3.74% HFN Macro Index 1.06% 1.17% 3.29% 1.15% 3.10% HFN CTA/Managed Futures Index 2.68% 2.77% 3.07% -1.29% 0.72% HFN Fixed Income (non-arbitrage) Index 2.38% 5.30% 10.39% 9.19% 10.87% HFN Fund of Funds Aggregate Index 1.55% 2.20% 7.61% 3.52% 3.99% Real Estate Regions Targeted by Private Real Estate Investors in the Next 12 Months % 49.0% % % % 6% MSCI Emerging Markets Country Allocation Source: evestment Alliance Region Source: Preqin Real Estate Spotlight, Q Mexico, 5.1% Russia, 5.4% Indonesia, 2.5% Malaysia, 3.9% India, 6.8% South Africa, 7.5% Other, 11.8% Brazil, 10.9% China, 18.3% Korea, 15.6% Taiwan, 12.2% Source: Dimensional Fund Advisors High Yield Bonds ($US) YTD 2 Year 3 Year 4 Year 5 Year BofA ML US High Yield Master II 2.57% 5.64% 11.80% 10.68% 9.27% 10.77% 13.94% BofA ML Global High Yield Constrained 2.90% 5.85% 13.61% 12.43% 9.63% 11.67% 14.41% Emerging Market Debt ($US) YTD 2 Year 3 Year 4 Year 5 Year JPMorgan GBI EM Global Diversified 4.02% 5.99% 3.91% 2.61% 1.16% 5.50% 7.42% JPMorgan EMBI Global Diversified 4.76% 8.66% 11.63% 6.24% 7.40% 8.39% 10.33% Source: evestment Alliance Infrastructure Infrastructure Deals Completed in Q by Region 7% 7% 5% 35% 3% 43% Europe North America Asia South America Australasia Africa Source: Preqin Infrastructure Spotlight, Q