ScotiaFunds and Scotia Private Pools Annual Report

Transcription

1 ScotiaFunds and Scotia Private Pools Annual Report 2011 Cash Equivalent Funds Scotia T-Bill Fund Scotia Premium T-Bill Fund Scotia Money Market Fund Scotia U.S. $ Money Market Fund Income Funds Scotia Short Term Bond Fund Scotia Private Short-Mid Government Bond Pool Scotia Mortgage Income Fund Scotia Bond Fund Scotia Canadian Income Fund Scotia Private Canadian Corporate Bond Pool Scotia U.S. $ Bond Fund Scotia Global Bond Fund Balanced Funds Scotia Private Advantaged Income Pool Scotia Diversified Monthly Income Fund Scotia Income Advantage Fund Scotia Canadian Balanced Fund Scotia Canadian Dividend Income Fund Scotia Canadian Tactical Asset Allocation Fund Scotia Global Balanced Fund Scotia U.S. $ Balanced Fund Equity Funds Canadian Equity Funds Scotia Private Canadian Preferred Share Pool Scotia Canadian Dividend Fund Scotia Canadian Blue Chip Fund Scotia Private Canadian Equity Pool Scotia Canadian Growth Fund Scotia Canadian Small Cap Fund Scotia Resource Fund Scotia Private North American Equity Pool Scotia Private Cyclical Opportunities Pool U.S. Equity Funds Scotia Private U.S. Dividend Pool Scotia Private U.S. Equity Pool Scotia U.S. Blue Chip Fund Scotia U.S. Value Fund International Equity Funds Scotia Private International Core Equity Pool Scotia International Value Fund Scotia European Fund Scotia Pacific Rim Fund Scotia Latin American Fund Global Equity Funds Scotia Global Dividend Fund Scotia Global Growth Fund Scotia Global Small Cap Fund Scotia Global Opportunities Fund Scotia Global Climate Change Fund Index Funds Scotia Canadian Bond Index Fund Scotia Canadian Index Fund Scotia U.S. Index Fund Scotia CanAm Index Fund Scotia Nasdaq Index Fund Scotia International Index Fund Scotia Portfolios Scotia Selected Portfolios Scotia Selected Income & Modest Growth Portfolio Scotia Selected Balanced Income & Growth Portfolio Scotia Selected Moderate Growth Portfolio Scotia Selected Aggressive Growth Portfolio Scotia Partners Portfolios Scotia Partners Diversified Income Portfolio Scotia Partners Income & Modest Growth Portfolio Scotia Partners Balanced Income & Growth Portfolio Scotia Partners Moderate Growth Portfolio Scotia Partners Aggressive Growth Portfolio Scotia Vision Portfolios Scotia Vision Conservative 2010 Portfolio Scotia Vision Aggressive 2010 Portfolio Scotia Vision Conservative 2015 Portfolio Scotia Vision Aggressive 2015 Portfolio Scotia Vision Conservative 2020 Portfolio Scotia Vision Aggressive 2020 Portfolio Scotia Vision Conservative 2030 Portfolio Scotia Vision Aggressive 2030 Portfolio Scotia INNOVA Portfolios Scotia INNOVA Income Portfolio Scotia INNOVA Balanced Income Portfolio Scotia INNOVA Balanced Growth Portfolio Scotia INNOVA Growth Portfolio Scotia INNOVA Maximum Growth Portfolio 1

2 Table of Contents 1 Global Economic Outlook Financial Statements Cash Equivalent Funds 3 Scotia T-Bill Fund 5 Scotia Premium T-Bill Fund 7 Scotia Money Market Fund 11 Scotia U.S. $ Money Market Fund Global Equity Funds 131 Scotia Global Dividend Fund 135 Scotia Global Growth Fund 139 Scotia Global Small Cap Fund 142 Scotia Global Opportunities Fund 145 Scotia Global Climate Change Fund Income Funds 14 Scotia Short Term Bond Fund 17 Scotia Private Short-Mid Government Bond Pool 20 Scotia Mortgage Income Fund 23 Scotia Bond Fund 26 Scotia Canadian Income Fund 29 Scotia Private Canadian Corporate Bond Pool 32 Scotia U.S. $ Bond Fund 35 Scotia Global Bond Fund Index Funds 148 Scotia Canadian Bond Index Fund 158 Scotia Canadian Index Fund 162 Scotia U.S. Index Fund 168 Scotia CanAm Index Fund 171 Scotia Nasdaq Index Fund 174 Scotia International Index Fund Scotia Portfolios Balanced Funds 38 Scotia Private Advantaged Income Pool 41 Scotia Diversified Monthly Income Fund 45 Scotia Income Advantage Fund 49 Scotia Canadian Balanced Fund 54 Scotia Canadian Dividend Income Fund 57 Scotia Canadian Tactical Asset Allocation Fund 70 Scotia Global Balanced Fund 72 Scotia U.S. $ Balanced Fund Equity Funds Canadian Equity Funds 75 Scotia Private Canadian Preferred Share Pool 77 Scotia Canadian Dividend Fund 81 Scotia Canadian Blue Chip Fund 84 Scotia Private Canadian Equity Pool 87 Scotia Canadian Growth Fund 90 Scotia Canadian Small Cap Fund 93 Scotia Resource Fund 96 Scotia Private North American Equity Pool 100 Scotia Private Cyclical Opportunities Pool U.S. Equity Funds 103 Scotia Private U.S. Dividend Pool 106 Scotia Private U.S. Equity Pool 109 Scotia U.S. Blue Chip Fund 112 Scotia U.S. Value Fund International Equity Funds 115 Scotia Private International Core Equity Pool 118 Scotia International Value Fund 122 Scotia European Fund 125 Scotia Pacific Rim Fund 128 Scotia Latin American Fund Scotia Selected@ Portfolios 177 Scotia Selected Income & Modest Growth Portfolio 179 Scotia Selected Balanced Income & Growth Portfolio 181 Scotia Selected Moderate Growth Portfolio 183 Scotia Selected Aggressive Growth Portfolio Scotia Partners Portfolios@ 185 Scotia Partners Diversified Income Portfolio 187 Scotia Partners Income & Modest Growth Portfolio 189 Scotia Partners Balanced Income & Growth Portfolio 191 Scotia Partners Moderate Growth Portfolio 193 Scotia Partners Aggressive Growth Portfolio Scotia Vision@ Portfolios 195 Scotia Vision Conservative 2010 Portfolio 197 Scotia Vision Aggressive 2010 Portfolio 199 Scotia Vision Conservative 2015 Portfolio 201 Scotia Vision Aggressive 2015 Portfolio 203 Scotia Vision Conservative 2020 Portfolio 205 Scotia Vision Aggressive 2020 Portfolio 207 Scotia Vision Conservative 2030 Portfolio 209 Scotia Vision Aggressive 2030 Portfolio Scotia INNOVA Portfolios» 211 Scotia INNOVA Income Portfolio 213 Scotia INNOVA Balanced Income Portfolio 215 Scotia INNOVA Balanced Growth Portfolio 217 Scotia INNOVA Growth Portfolio 219 Scotia INNOVA Maximum Growth Portfolio 221 Notes to the Financial Statements 237 Independent Auditors Report 239 Management s Responsibility for Financial Reporting

3 Global Economic Outlook Warren Jestin Senior Vice-President and Chief Economist Scotiabank Group Not So Fast Forward Financial markets have been buffeted in recent months by heightened investor anxiety over prospects for global growth, the sovereign debt crisis in Europe and the limited progress in bringing Washington s massive fiscal deficit under control. For debt- and deficit-heavy nations, the magnitude of the structural adjustments required for meaningful fiscal repair will dampen growth through middecade. The very high social costs and political risks associated with these very difficult fiscal decisions point to ongoing volatility in currency, equity and bond markets. Output growth in 2012 will struggle to reach 2% in the U.S., even if interest rates remain near historic lows and fiscal retrenchment is postponed, which seems very likely given the high levels of unemployment, fragility of the housing sector and financial difficulties confronting state and local governments. While some European nations will eke out gains, overall growth will be nonexistent in the eurozone as public sector retrenchment and private deleveraging push a number of distressed economies into or deeper into recession. Real GDP (Annual % Change) Slower Global Growth in 2012 China 2011 Estimate 2012 Forecast 2013 Forecast * Canada U.S. Eurozone * 0.0% Sources: Bloomberg, BEA, Statistics Canada, Eurostat, and Scotia Economics January 3, 2012 Global Forecast Update. Economic momentum also has moderated in many emerging nations, though growth in 2012 should be close to 9% in China, 8% in India and 4% in Brazil. With the traditional developed nations stuck in the slow lane, emerging markets are accounting for over twothirds of global growth and will likely continue to do so through the balance of the decade. The Economist magazine suggests that, by the end of the decade, China may surpass the U.S. as the world s largest economy. Overall Canadian growth is likely to be similar to the U.S. in 2012, falling short of 2%. Domestic demand will be supported by resource sector mega-projects and public infrastructural investment. However, household spending gains will be dampened by a moderation in job creation and greater caution in taking on additional consumer debt, now at record levels relative to disposable income. With home ownership at an all-time high, housing activity will subside. While the Bank of Canada is likely to hold its benchmark interest rates at current levels into 2013, keeping interest rates near generational lows, Canadian fiscal policy will be less stimulative as Ottawa and many provincial governments move to bring their budgets back towards balance. Reduced global economic momentum will temper Canadian export gains, although resource producers will continue to enjoy relatively buoyant demand from China and other emerging markets. Manufacturers will continue to be challenged by the strong loonie and soft markets in Europe, and in the U.S. still the destination of over 70% of Canadian exports. Growth in the manufacturing sector will increasingly come from smalland medium-size enterprises that are focussed on higher value-added domestic markets and new global markets. Trends in the auto industry underline the shift that is occurring in the manufacturing sector. Canada now produces nearly one million fewer vehicles than a decade ago and is getting a much smaller share of the auto sector s North American investment than over the past decade. 1

4 In today s challenging global environment, Canada remains one of the best places to work and do business. Unlike the U.S. and Europe, Canada has fully regained the jobs lost during the financial crisis and recession of In today s challenging global environment, Canada remains one of the best places to work and do business. Unlike the U.S. and Europe, Canada has fully regained the jobs lost during the financial crisis and recession of The buoyancy in our housing and commercial real estate markets contrasts sharply with the depressed conditions evident in the U.S. and much of Europe. Ottawa plans to balance its budget deficit, now equivalent to 2% of GDP, by 2017, if not before. Despite a shortfall running around 8% of GDP, Washington has no plans to move decisively towards a more balanced fiscal setting. Canada s fiscal advantage is strategically important for longer-term growth and prosperity because it underpins an internationally competitive tax system. Our financial system, the strongest in the world, supports national growth at a time when banking problems in many developed countries have become an impediment to the revitalization of economic activity. Warren Jestin Senior Vice-President and Chief Economist Scotiabank Group 2

5 Scotia T-Bill Fund STATEMENT OF NET ASSETS As at ASSETS Investments at fair value $114,295,913 $138,183,677 Cash 54, ,347 Accrued investment income 9,912 11, ,360, ,296,951 LIABILITIES Distributions payable Net Assets $114,360,321 $138,296,651 NET ASSETS PER SERIES Series A Units $114,360,321 $138,296,651 UNITS OUTSTANDING Series A Units 11,436,032 13,829,665 NET ASSETS PER UNIT Series A Units $ $ STATEMENT OF OPERATIONS For the periods ended STATEMENT OF CHANGES IN NET ASSETS For the periods ended NET ASSETS BEGINNING OF PERIOD Series A Units $138,296,651 $163,034,589 Series A Units 364, ,537 DISTRIBUTIONS TO UNITHOLDERS From net investment income Series A Units (364,472) (162,536) UNIT TRANSACTIONS Proceeds from issue Series A Units 43,947,776 67,198,912 Reinvested distributions Series A Units 361, ,328 Payments on redemption Series A Units (68,245,701) (92,098,179) (23,936,332) (24,737,939) INCREASE (DECREASE) IN NET ASSETS Series A Units (23,936,330) (24,737,938) NET ASSETS END OF PERIOD Series A Units $114,360,321 $138,296,651 INVESTMENT INCOME Interest $1,328,709 $ 892,303 Securities lending 28,502 46,694 1,357, ,997 EXPENSES Management fees (note 5) 1,220,985 1,571,808 Harmonized Sales Tax/Goods and Services Tax 117,560 84,749 Audit fees 16,128 17,018 Independent Review Committee fees 1,501 2,230 Custodian fees 2,522 2,783 Filing fees 20,554 22,674 Legal fees 2,862 1,955 Unitholder reporting costs 33,584 44,096 Unitholder administration and service fees 184, ,175 Overdraft charges 8 1,600,420 2,022,496 Absorbed expenses (607,683) (1,246,036) 992, ,460 Net investment income (loss) 364, ,537 Increase (decrease) in Net Assets from operations $ 364,474 $ 162,537 Series A Units $ 364,474 $ 162,537 PER UNIT Series A Units $ 0.03 $ 0.01 CASH EQUIVALENT FUNDS 3

6 Scotia T-Bill Fund (Continued) STATEMENT OF INVESTMENT PORTFOLIO As at 2011 Face MONEY MARKET INSTRUMENTS 99.9% Treasury Bills 62.9% Government of Canada 2,675, % due Jan. 5, ,673,761 2,674, , % due Jan. 5, , ,969 8,080, % due Jan. 5, ,047,599 8,078,948 18,955, % due Jan. 19, ,923,156 18,946,357 8,535, % due Feb. 2, ,501,116 8,527,739 17,660, % due Mar. 15, ,613,554 17,628,898 12,200, % due Apr. 12, ,171,574 12,171,847 3,730, % due Oct. 25, ,694,080 3,700,494 71,874,033 71,978,972 Short-Term Bonds 37.0% Alberta Capital Finance Authority (Floating Rate) 6,000, % due Apr. 26, ,001,037 6,015,352 Financement Quebec (Floating Rate) 11,720, % due Apr. 25, ,713,102 11,738,866 Government of Canada (Floating Rate) 9,900, % due Sep. 15, ,979,722 9,986,451 Province of Ontario (Floating Rate) 3,000, % due Apr. 2, ,038,449 3,054,729 Province of Manitoba (Floating Rate) 11,500, % due May 2, ,497,592 11,521,544 42,229,902 42,316,941 TOTAL INVESTMENT PORTFOLIO 114,103, ,295,913 OTHER ASSETS, LESS LIABILITIES 0.1% 64,408 NET ASSETS 100.0% 114,360,321 SUMMARY OF INVESTMENT PORTFOLIO Investment Category Treasury Bills Short-Term Bonds SUPPLEMENTARY SCHEDULES As at 2011 and 2010 Interest rate risk (note 3) The table below summarizes the Fund s exposure to interest rate risk by the remaining term to maturity of the Fund s portfolio of money market instruments. Money Market Instruments* Less than 1 year $114,295,913 $138,183, years 3-5 years 5-10 years H 10 years Total $114,295,913 $138,183,677 * Excludes cash Credit risk (note 3) The table below summarizes the credit ratings of the money market instruments, excluding cash, held by the Fund Total Money Market Instruments (%) Total Money Market Instruments (%) Short-Term Rating R1-High Bond Credit Rating AAA AA A Total Liquidity risk (note 3) The table below summarizes a maturity analysis of cash flows associated with the maturities of the Fund s financial liabilities: Less than 3 months Less than 3 months Accounts payable and accrued liabilities $276 $300 value classification (note 2) The tables below illustrate the classification of the Fund s financial instruments within the fair value hierarchy as at 2011 and 2010, respectively. CASH EQUIVALENT FUNDS 2011 Money Market Instruments $ $114,295,913 $ $114,295, Money Market Instruments $ $138,183,677 $ $138,183,677 During the periods ended 2011 and 2010, there were no transfers between Level 1 and Level 2. 4

7 Scotia Premium T-Bill Fund STATEMENT OF NET ASSETS As at ASSETS Investments at fair value $428,840,002 $571,884,886 Cash 1,413,023 96,010 Accrued investment income 37,371 49,553 Receivable for management fees rebate 82, , ,372, ,146,740 LIABILITIES Distributions payable 7,803 13,713 Net Assets $430,365,012 $572,133,027 NET ASSETS PER SERIES Series A Units $430,365,012 $572,133,027 UNITS OUTSTANDING Series A Units 43,036,501 57,213,303 NET ASSETS PER UNIT Series A Units $ $ STATEMENT OF OPERATIONS For the periods ended STATEMENT OF CHANGES IN NET ASSETS For the periods ended NET ASSETS BEGINNING OF PERIOD Series A Units $ 572,133,027 $ 854,406,256 Series A Units 4,316,735 3,136,075 DISTRIBUTIONS TO UNITHOLDERS From net investment income Series A Units (4,316,732) (3,136,075) UNIT TRANSACTIONS Proceeds from issue Series A Units 614,215, ,199,961 Reinvested distributions Series A Units 4,219,165 3,070,049 Payments on redemption Series A Units (760,202,222) (762,543,239) (141,768,018) (282,273,229) INCREASE (DECREASE) IN NET ASSETS Series A Units (141,768,015) (282,273,229) NET ASSETS END OF PERIOD Series A Units $ 430,365,012 $ 572,133,027 INVESTMENT INCOME Interest $5,878,375 $4,308,656 Securities lending 155, ,792 6,033,872 4,541,448 EXPENSES Management fees net of rebates (note 5) 1,504,373 2,052,072 Harmonized Sales Tax/Goods and Services Tax 297, ,795 Audit fees 19,539 20,001 Independent Review Committee fees Custodian fees 7,988 9,319 Filing fees 27,331 27,201 Legal fees 2,862 1,955 Unitholder reporting costs 11,000 12,502 Unitholder administration and service fees 71,205 76,817 Overdraft charges ,942,255 2,327,942 Absorbed expenses (225,118) (922,569) 1,717,137 1,405,373 Net investment income (loss) 4,316,735 3,136,075 Increase (decrease) in Net Assets from operations $4,316,735 $3,136,075 Series A Units $4,316,735 $3,136,075 PER UNIT Series A Units $ 0.08 $ 0.04 CASH EQUIVALENT FUNDS 5

8 Scotia Premium T-Bill Fund (Continued) STATEMENT OF INVESTMENT PORTFOLIO As at 2011 Face MONEY MARKET INSTRUMENTS 99.7% Treasury Bills 62.1% Government of Canada 1,225, % due Jan. 5, ,224,241 1,224, , % due Jan. 5, , , , % due Jan. 5, , , , % due Jan. 5, , ,923 1,140, % due Jan. 5, ,139,453 1,139, , % due Jan. 5, , , , % due Jan. 5, , , , % due Jan. 5, , ,933 27,900, % due Jan. 5, ,824,390 27,896, , % due Jan. 5, , ,961 11,135, % due Jan. 5, ,090,349 11,133,550 67,760, % due Jan. 19, ,646,163 67,729,101 14,860, % due Feb. 2, ,808,287 14,847,810 20,290, % due Feb. 2, ,209,449 20,272,739 59,650, % due Mar. 15, ,493,121 59,544,947 45,700, % due Apr. 12, ,593,519 45,594,543 14,270, % due Oct. 25, ,132,580 14,157, ,698, ,080,768 Short-Term Bonds 37.6% Alberta Capital Finance Authority (Floating Rate) 10,700, % due Feb. 5, ,689,379 10,710,587 39,400, % due Apr. 26, ,406,807 39,500,808 Financement Quebec (Floating Rate) 31,730, % due Apr. 25, ,710,902 31,780,654 Canada Housing Trust No. 1 (Floating Rate) 34,680, % due Sep. 15, ,959,270 34,982,842 Province of Manitoba (Floating Rate) 44,700, % due May 2, ,691,244 44,784, ,457, ,759,234 TOTAL INVESTMENT PORTFOLIO 428,156, ,840,002 OTHER ASSETS, LESS LIABILITIES 0.3% 1,525,010 NET ASSETS 100.0% 430,365,012 SUPPLEMENTARY SCHEDULES As at 2011 and 2010 Interest rate risk (note 3) The table below summarizes the Fund s exposure to interest rate risk by the remaining term to maturity of the Fund s portfolio of money market instruments. Money Market Instruments* Less than 1 year $428,840,002 $571,884, years 3-5 years 5-10 years H 10 years Total $428,840,002 $571,884,886 * Excludes cash Credit risk (note 3) The table below summarizes the credit ratings of the money market instruments, excluding cash, held by the Fund Total Money Market Instruments (%) Total Money Market Instruments (%) Short-Term Rating R1-High Bond Credit Rating AAA AA A Total Liquidity risk (note 3) The table below summarizes a maturity analysis of cash flows associated with the maturities of the Fund s financial liabilities: Less than 3 months Less than 3 months Accounts payable and accrued liabilities $7,803 $13,713 CASH EQUIVALENT FUNDS SUMMARY OF INVESTMENT PORTFOLIO Investment Category Treasury Bills Short-Term Bonds value classification (note 2) The tables below illustrate the classification of the Fund s financial instruments within the fair value hierarchy as at 2011 and 2010, respectively Money Market Instruments $ $428,840,002 $ $428,840, Money Market Instruments $ $571,884,886 $ $571,884,886 During the periods ended 2011 and 2010, there were no transfers between Level 1 and Level 2. 6

9 Scotia Money Market Fund STATEMENT OF NET ASSETS As at ASSETS Investments at fair value $2,309,224,169 $2,065,087,054 Cash 38,573 96,215 Accrued investment income 249, ,814 2,309,512,555 2,065,424,083 LIABILITIES Distributions payable 3,712 9,355 Net Assets $2,309,508,843 $2,065,414,728 NET ASSETS PER SERIES Series A Units $ 690,727,895 $ 787,387,159 Advisor Series Units $ 2,534,401 $ 4,938,578 Premium Series Units $ 287,387,492 $ 271,441,130 Series I Units $ 11,916,112 $ 15,079,684 Series M Units $1,316,942,943 $ 986,568,177 UNITS OUTSTANDING Series A Units 69,072,790 78,738,716 Advisor Series Units 253, ,858 Premium Series Units 28,738,749 27,144,113 Series I Units 1,191,611 1,507,968 Series M Units 131,694,295 98,656,818 NET ASSETS PER UNIT Series A Units $ $ Advisor Series Units $ $ Premium Series Units $ $ Series I Units $ $ Series M Units $ $ STATEMENT OF OPERATIONS For the periods ended INVESTMENT INCOME Interest $29,874,715 $22,675,905 Securities lending 2, ,876,949 22,676,753 EXPENSES Management fees (note 5) 8,465,303 10,567,890 Harmonized Sales Tax/Goods and Services Tax 841, ,939 Audit fees 23,010 23,278 Independent Review Committee fees 3,747 4,793 Custodian fees 40,901 40,286 Filing fees 63, ,649 Legal fees 5,313 1,865 Unitholder reporting costs 78,740 91,874 Unitholder administration and service fees 527, ,516 Overdraft charges ,049,817 12,180,986 Absorbed expenses (1,422,408) (3,337,119) 8,627,409 8,843,867 Net investment income (loss) 21,249,540 13,832,886 Increase (decrease) in Net Assets from operations $21,249,540 $13,832,886 Series A Units $ 2,525,110 $ 1,382,196 Advisor Series Units $ 12,492 $ 9,703 Premium Series Units $ 2,735,402 $ 2,173,143 Series I Units $ 175,042 $ 138,951 Series M Units $15,801,494 $10,128,893 PER UNIT Series A Units $ 0.03 $ 0.02 Advisor Series Units $ 0.03 $ 0.01 Premium Series Units $ 0.10 $ 0.06 Series I Units $ 0.13 $ 0.10 Series M Units $ 0.13 $ 0.09 STATEMENT OF CHANGES IN NET ASSETS For the periods ended NET ASSETS BEGINNING OF PERIOD Series A Units $ 787,387,159 $ 998,315,829 Advisor Series Units 4,938,578 7,269,580 Premium Series Units 271,441, ,115,939 Series I Units 15,079,684 11,781,019 Series M Units 986,568,177 1,179,202,404 2,065,414,728 2,753,684,771 Series A Units 2,525,110 1,382,196 Advisor Series Units 12,492 9,703 Premium Series Units 2,735,402 2,173,143 Series I Units 175, ,951 Series M Units 15,801,494 10,128,893 21,249,540 13,832,886 DISTRIBUTIONS TO UNITHOLDERS From net investment income Series A Units (2,525,114) (1,382,194) Advisor Series Units (12,492) (9,702) Premium Series Units (2,735,403) (2,173,143) Series I Units (175,041) (138,952) Series M Units (15,801,499) (10,128,893) (21,249,549) (13,832,884) UNIT TRANSACTIONS Proceeds from issue Series A Units 632,771, ,841,837 Advisor Series Units 2,054,394 5,308,677 Premium Series Units 356,892, ,361,661 Series I Units 30,000 4,799,980 Series M Units 2,600,789,015 1,877,667,766 Reinvested distributions Series A Units 2,498,493 1,367,624 Advisor Series Units 12,393 9,634 Premium Series Units 2,703,734 2,078,109 Series I Units 175, ,952 Series M Units 15,720,517 10,011,410 Payments on redemption Series A Units (731,929,442) (1,000,138,133) Advisor Series Units (4,470,964) (7,649,314) Premium Series Units (343,649,914) (728,114,579) Series I Units (3,368,613) (1,640,266) Series M Units (2,286,134,761) (2,080,313,403) 244,094,124 (688,270,045) INCREASE (DECREASE) IN NET ASSETS Series A Units (96,659,264) (210,928,670) Advisor Series Units (2,404,177) (2,331,002) Premium Series Units 15,946,362 (285,674,809) Series I Units (3,163,572) 3,298,665 Series M Units 330,374,766 (192,634,227) 244,094,115 (688,270,043) NET ASSETS END OF PERIOD Series A Units 690,727, ,387,159 Advisor Series Units 2,534,401 4,938,578 Premium Series Units 287,387, ,441,130 Series I Units 11,916,112 15,079,684 Series M Units 1,316,942, ,568,177 $ 2,309,508,843 $ 2,065,414,728 CASH EQUIVALENT FUNDS 7

10 Scotia Money Market Fund (Continued) STATEMENT OF INVESTMENT PORTFOLIO As at 2011 CASH EQUIVALENT FUNDS Face MONEY MARKET INSTRUMENTS 100.0% Bankers Acceptances 2.9% HSBC Bank Canada 44,000, % due from Jan. 16, ,959,080 43,978,879 18,000, % due from Jan. 30, ,967,420 17,983,434 Royal Bank of Canada 5,000, % due Jan. 16, ,992,400 4,997,706 66,918,900 66,960,019 Bearers Deposit Notes 4.3% Bank of Nova Scotia, The 32,000, % due Jan. 3, ,962,880 31,997,216 Caisse Centrale Desjardins 5,000, % due Jan. 10, ,993,100 4,998,563 4,150, % due Jan. 13, ,143,858 4,148,434 1,500, % due Jan. 26, ,497,195 1,498,860 Manulife Bank of Canada 5,800, % due Jan. 3, ,794,490 5,799,483 10,000, % due Jan. 9, ,990,800 9,997,329 15,000, % due Jan. 13, ,987,150 14,994,168 10,500, % due Feb. 1, ,480,440 10,489,820 14,300, % due Feb. 21, ,272,258 14,277,460 98,122,171 98,201,333 Commercial Paper 34.0% Caisse Centrale Desjardins 2,525, % due Jan. 25, ,522,349 2,523,209 Canada Pension Plan Investment Board 19,900, % due Jan. 11, ,892,438 19,894,058 8,300, % due Jan. 20, ,294,771 8,295,453 Daimler Canada Finance Inc. 7,500, % due Jan. 6, ,491,075 7,498,513 10,000, % due Jan. 10, ,989,100 9,996,697 43,590, % due Jan. 18, ,542,487 43,564,083 Enbridge Inc. 38,000, % due Jan. 9, ,963,140 37,989,633 14,000, % due Jan. 16, ,988,240 13,993,031 5,120, % due Jan. 19, ,114,675 5,117,024 Fortis, Inc. 1,540, % due Jan. 4, ,537,228 1,539,821 4,225, % due Jan. 31, ,217,522 4,221,200 3,000, % due Feb. 1, ,992,020 2,997,163 3,000, % due Feb. 3, ,994,780 2,997,042 4,000, % due Mar. 1, ,989,720 3,992,792 General Electric Company 12,000, % due Jan. 6, ,984,280 11,997,904 4,000, % due Jan. 17, ,992,520 3,998,013 3,425, % due Feb. 1, ,405,306 3,421,419 Honda Canada Finance Inc. 6,000, % due Jan. 13, ,993,700 5,997,725 5,000, % due Jan. 18, ,995,600 4,997,360 24,500, % due Jan. 27, ,478,725 24,480,602 7,700, % due Jan. 30, ,679,056 7,692,860 16,000, % due Mar. 15, ,956,960 15,962,897 Imperial Oil Limited 18,000, % due Jan. 5, ,982,000 17,997,429 24,500, % due Jan. 19, ,474,275 24,486,790 20,000, % due Jan. 26, ,983,400 19,985,117 Nova Scotia Power Inc. 11,540, % due Jan. 10, ,528,264 11,536,605 3,600, % due Jan. 16, ,596,472 3,598,289 21,000, % due Jan. 17, ,978,530 20,989,456 5,000, % due Jan. 23, ,994,850 4,996,616 3,800, % due Jan. 24, ,796,162 3,797,291 8,000, % due Jan. 25, ,991,760 7,994,114 5,700, % due Jan. 27, ,693,958 5,695,469 Omers Finance Trust 11,500, % due Jan. 6, ,490,685 11,498,004 2,300, % due Jan. 11, ,298,068 2,299,267 Face MONEY MARKET INSTRUMENTS (cont d) Commercial Paper (cont d) 61,520, % to 1.11% due Jan. 20, ,452,957 61,483,914 9,100, % due Jan. 25, ,090,991 9,093,376 17,884, % due Mar. 9, ,837,680 17,846,837 1,000, % due Mar. 14, , ,780 Omnova Solutions Inc. 4,000, % due Jan. 12, ,996,400 3,998,606 Telus Corporation Non-Voting 10,000, % due Jan. 4, ,970,300 9,998,723 8,300, % due Jan. 6, ,275,598 8,298,409 Thompson Corp 6,000, % due Jan. 13, ,995,260 5,997,535 Toyota Credit Canada Inc. 25,000, % due May 4, ,852,500 24,895,241 23,000, % due May 7, ,873,040 22,902,103 12,380, % to 1.21% due May 15, ,309,962 12,324,460 TransCanada PipeLines Ltd. 700, % due Jan. 5, , ,895 2,900, % due Jan. 25, ,891,590 2,897,664 10,000, % due Jan. 26, ,970,700 9,991,629 Union Gas Ltd. 13,315, % due Jan. 4, ,309,141 13,313,438 43,170, % due Jan. 13, ,145,554 43,153,941 Vancouver City 15,000, % due Feb. 22, ,968,650 14,976,264 9,000, % due Mar. 7, ,977,500 8,982,054 13,765, % due Mar. 14, ,727,697 13,734,666 Volkswagen AG 5,000, % due Jan. 4, ,984,650 4,999,340 9,600, % due Jan. 9, ,573,696 9,597,148 8,500, % due Jan. 24, ,474,755 8,493,268 10,000, % to 1.20% due Feb. 1, ,970,980 9,989,550 4,000, % due Mar. 2, ,987,960 3,991,797 15,000, % due Mar. 16, ,954,400 14,962,330 10,000, % due Mar. 19, ,970,300 9,973,930 Woodbridge Finance Corporation 9,900, % due Jan. 11, ,890,298 9,896,766 7,500, % due Jan. 13, ,492,875 7,497,105 4,000, % due Jan. 18, ,996,480 3,997,888 8,835, % to 0.39% due Jan. 19, ,827,956 8,831,405 4,500, % due Mar. 5, ,486,815 4,490,883 11,000, % due Mar. 8, ,970,055 10,976,704 4,000, % due Mar. 12, ,988,680 3,991,044 10,100, % due Mar. 15, ,071,013 10,076, ,807, ,395,008 Short-Term Bonds 58.8% Bank of Montreal (Floating Rate) 100,600, % due Dec. 10, ,601, ,682,481 Bank of Nova Scotia, The (Floating Rate) 21,363, % due Apr. 20, ,386,349 21,457,684 13,000, % due Dec. 21, ,994,040 12,997,588 42,000, % due Apr. 19, ,061,774 42,193,310 Caisse Centrale Desjardins (Floating Rate) 500, % due Feb. 17, , ,046 9,881, % due Feb. 17, ,882,208 9,900,434 37,350, % due Sep. 17, ,489,258 37,511,604 Canadian Imperial Bank of Commerce (Floating Rate) 19,700, % due Jul. 19, ,700,000 19,709,437 Canadian Utilities Limited 4,316, % due Nov. 1, ,443,343 4,477,503 CARDS II Trust (Floating Rate) 28,900, % due May 15, ,937,922 29,002,619 Caterpillar Financial Services Limited 55,662, % due Jun. 1, ,443,800 56,661,673 Deere & Company 28,479, % due Apr. 20, ,768,997 29,034,177 3,960, % due Jul. 27, ,047,016 4,135,987 8

11 Scotia Money Market Fund (Continued) STATEMENT OF INVESTMENT PORTFOLIO Face MONEY MARKET INSTRUMENTS (cont d) Short-Term Bonds (cont d) 15,000, % due Jul. 27, ,329,628 15,666,639 EnCana Corporation 53,154, % due Mar. 12, ,449,252 54,133,685 GE Capital Canada Funding Company 9,300, % due Jul. 24, ,542,629 9,793,767 1,000, % due Sep. 28, ,019,640 1,030,818 General Electric Company 28,155, % due Aug. 17, ,798,654 29,345,037 Greater Toronto Airports Authority 55,560, % due Jan. 30, ,780,112 57,223,842 6,500, % due Dec. 13, ,801,101 6,819,971 Honda Canada Finance Inc. (Floating Rate) 2,600, % due Mar. 26, ,599,392 2,599,601 Honda Canada Finance Inc. 45,577, % due Sep. 26, ,947,893 47,622,939 Manulife Bank of Canada (Floating Rate) 8,000, % due Jan. 5, ,000,080 8,008,943 Master Credit Card Trust 41,400, % due Aug. 21, ,403,327 43,183,974 National Bank of Canada (Floating Rate) 18,000, % due Feb. 13, ,001,085 18,013,824 48,000, % due Oct. 10, ,000,000 48,034,802 NAV Canada 23,307, % due Apr. 17, ,440,504 23,602,327 Province of Alberta (Floating Rate) 25,000, % due Jun. 12, ,000,000 25,018, ,860, % due Jun. 1, ,780, ,936,975 Province of Ontario (Floating Rate) 48,100, % due Oct. 28, ,194,906 48,317,009 Royal Bank of Canada (Floating Rate) 23,850, % due May 11, ,890,523 23,949,334 88,200, % due Apr. 8, ,213,485 88,543,660 77,900, % due Sep. 26, ,900,037 77,906,590 Shoppers Drug Mart Corporation 26,908, % due Jan. 20, ,954,092 27,526,178 TELUS Corporation 46,257, % due Mar. 15, ,536,085 47,142,252 Toronto-Dominion Bank, The (Floating Rate) 45,150, % due Sep. 19, ,150,000 45,166,021 45,000, % due Nov. 8, ,000,000 45,082,989 Toyota Credit Canada Inc. 1,115, % due Jul. 27, ,136,527 1,160,397 Wells Fargo Company 23,107, % due Jun. 26, ,504,955 23,517,835 Wells Fargo Financial Canada Corporation 1,384, % due Aug. 27, ,423,902 1,452,344 3,195, % due Sep. 13, ,271,822 3,321,117 10,974, % due Dec. 12, ,256,743 11,280,490 1,350,583,250 1,358,667,809 TOTAL INVESTMENT PORTFOLIO 2,300,431,636 2,309,224,169 OTHER ASSETS, LESS LIABILITIES 0.0% 284,674 NET ASSETS 100.0% 2,309,508,843 SUMMARY OF INVESTMENT PORTFOLIO Investment Category Bankers Acceptances Bearers Deposit Notes Commercial Paper Promissory Notes 1.3 Treasury Bills 0.2 Short-Term Bonds CASH EQUIVALENT FUNDS 9

12 Scotia Money Market Fund (Continued) SUPPLEMENTARY SCHEDULES As at 2011 and 2010 Interest rate risk (note 3) The table below summarizes the Fund s exposure to interest rate risk by the remaining term to maturity of the Fund s portfolio of money market instruments. Money Market Instruments* Less than 1 year $2,309,224,169 $2,065,087, years 3-5 years 5-10 years H 10 years Total $2,309,224,169 $2,065,087,054 * Excludes cash Credit risk (note 3) The table below summarizes the credit ratings of the money market instruments, excluding cash, held by the Fund Total Money Market Instruments (%) Total Money Market Instruments (%) Short-Term Rating R1-High R1-Middle R1-Low Bond Credit Rating AAA AA A Total Liquidity risk (note 3) The table below summarizes a maturity analysis of cash flows associated with the maturities of the Fund s financial liabilities: Less than 3 months Less than 3 months Accounts payable and accrued liabilities $3,712 $9,355 value classification (note 2) The tables below illustrate the classification of the Fund s financial instruments within the fair value hierarchy as at 2011 and 2010, respectively Money Market Instruments $ $2,309,224,169 $ $2,309,224, Money Market Instruments $ $2,065,087,054 $ $2,065,087,054 During the periods ended 2011 and 2010, there were no transfers between Level 1 and Level 2. CASH EQUIVALENT FUNDS 10

13 Scotia U.S. $ Money Market Fund STATEMENT OF NET ASSETS As at U.S.$ U.S.$ ASSETS Investments at fair value $97,712,974 $106,878,465 Cash 80,865 99,375 Accrued investment income 177, ,134 97,971, ,154,974 LIABILITIES Distributions payable 7 10 Net Assets $97,971,632 $107,154,964 NET ASSETS PER SERIES Series A Units $97,971,632 $107,154,964 UNITS OUTSTANDING Series A Units 9,797,163 10,715,496 NET ASSETS PER UNIT Series A Units $ $ STATEMENT OF OPERATIONS For the periods ended STATEMENT OF CHANGES IN NET ASSETS For the periods ended U.S.$ U.S.$ NET ASSETS BEGINNING OF PERIOD Series A Units $107,154,964 $113,786,744 Series A Units 54,016 58,082 DISTRIBUTIONS TO UNITHOLDERS From net investment income Series A Units (54,015) (58,084) UNIT TRANSACTIONS Proceeds from issue Series A Units 86,271,878 89,264,527 Reinvested distributions Series A Units 53,820 58,069 Payments on redemption Series A Units (95,509,031) (95,954,374) (9,183,333) (6,631,778) INCREASE (DECREASE) IN NET ASSETS Series A Units (9,183,332) (6,631,780) NET ASSETS END OF PERIOD Series A Units $ 97,971,632 $107,154,964 U.S.$ U.S.$ INVESTMENT INCOME Interest $ 336,299 $ 369,455 EXPENSES Management fees (note 5) 1,073,423 1,153,917 Harmonized Sales Tax/Goods and Services Tax 27,968 25,878 Audit fees 8,549 17,018 Independent Review Committee fees Custodian fees 3,995 4,094 Filing fees 22,182 19,595 Legal fees 2,862 1,955 Unitholder reporting costs 10,191 12,175 Unitholder administration and service fees 66,931 67,907 Overdraft charges ,216,572 1,302,790 Absorbed expenses (934,289) (991,417) 282, ,373 Net investment income (loss) 54,016 58,082 Increase (decrease) in Net Assets from operations $ 54,016 $ 58,082 Series A Units $ 54,016 $ 58,082 PER UNIT Series A Units $ 0.01 $ 0.01 CASH EQUIVALENT FUNDS 11

14 Scotia U.S. $ Money Market Fund (Continued) CASH EQUIVALENT FUNDS STATEMENT OF INVESTMENT PORTFOLIO As at 2011 Face U.S. $ U.S. $ U.S. $ MONEY MARKET INSTRUMENTS 99.7% Treasury Bills 0.2% Province of Ontario 175, % due Mar. 20, , ,968 Promissory Notes 5.4% Canadian Wheat Board, The 750, % due Jan. 6, , ,995 Province of Quebec 3,425, % due Jan. 12, ,424,589 3,424,932 Province of Quebec 1,160, % due Mar. 21, ,159,768 1,159,771 5,334,337 5,334,698 Banker s Acceptance 2.9% HSBC Bank Canada 600, % due Jan. 18, , ,964 HSBC Bank Canada 800, % due Feb. 7, , ,756 Toronto-Dominion Bank, The 1,400, % due from Jan. 18, ,399,884 1,399,938 2,799,310 2,799,658 Bearers Deposit Notes 12.8% Bank of Montreal 600, % due Feb. 13, , ,839 Caisse Centrale Desjardins 2,300, % due Mar. 16, ,298,919 2,299,126 Caisse Centrale Desjardins 2,300, % due Sep. 11, ,285,671 2,289,962 HSBC Bank Canada 3,000, % due Jan. 6, ,999,670 2,999,945 National Bank of Canada 1,100, % due Apr. 10, ,097,800 1,098,766 Toronto-Dominion Bank, The 2,300, % due Jan. 9, ,299,820 2,299,948 Toronto-Dominion Bank, The 969, % due Jan. 23, , ,876 12,549,719 12,556,462 Commercial Paper 20.5% John Deere Credit Inc. & John Deere Ltd. 2,700, % due Jan. 23, ,699,622 2,699,860 Nestle Capital Canada Ltd. 2,200, % due Aug. 3, ,196,205 2,196,964 Province of Ontario 1,500, % due Jan. 18, ,499,940 1,499,943 Province of Ontario 6,440, % due Mar. 13, ,438,712 6,438,965 Suncor Energy, Inc 155, % due Jan. 4, , ,995 Suncor Energy, Inc 2,000, % due Jan. 18, ,998,240 1,999,599 Thomson Reuters Corp. 2,400, % due from Jan. 17, 2012 to Jan. 30, ,399,034 2,399,258 TransCanada Keystone Pipeline, LP 1,400, % due Feb. 2, ,398,264 1,399,384 TransCanada Keystone Pipeline, LP 600, % Mar. 13, , ,272 TransCanada PipeLines Limited 740, % due Mar. 2, , ,237 20,122,978 20,127,477 Short Term Bonds 57.9% American Honda Finance Corporation (Floating Rate) 2,500, % due Jan. 17, ,500,712 2,505,000 Bank of Montreal (Floating Rate) 4,000, % due Aug. 14, ,997,148 3,999,912 Face U.S. $ U.S. $ U.S. $ MONEY MARKET INSTRUMENTS (cont d) Short Term Bonds (cont d) Bank of Nova Scotia, The (Floating Rate) 4,500, % due Mar. 12, ,499,906 4,501,664 Canadian Imperial Bank of Commerce (Floating Rate) 2,800, % due Jan. 13, ,800,043 2,803, , % due Oct. 1, , ,489 1,700, % due Oct. 15, ,700,000 1,700,396 Caterpillar Financial Services Limited (Floating Rate) 2,830, % due Jul. 24, ,833,434 2,835,517 General Electric Capital Corporation 2,700, % due Feb. 21, ,718,493 2,840,162 International Business Machines Corporation (Floating Rate) 2,841, % due Jun. 15, ,842,034 2,842,716 KFW International Finance, Inc. 1,492, % due Jun. 15, ,498,056 1,498,834 National Australia Bank Limited (Floating Rate) 1,500, % due Jan. 8, ,500,487 1,503,399 Province of Nova Scotia 1,500, % due Feb. 27, ,512,987 1,542,456 Province of Ontario (Floating Rate) 5,755, % due May 22, ,763,828 5,769,524 3,100, % due Nov. 19, ,101,173 3,103,287 5,100, % due May 7, ,108,704 5,113,074 Province of Ontario 1,762, % due Jun. 1, ,795,562 1,802,588 Royal Bank of Canada (Floating Rate) 1,200, % due Dec. 12, ,200,162 1,200,572 3,500, % due Jan. 28, ,499,762 3,503,114 Royal Dutch Shell PLC (Floating Rate) 4,842, % due Jun. 22, ,851,565 4,852,543 Toyota Credit Canada Inc. (Floating Rate) 2,500, % due Jan. 11, ,500,000 2,500,843 56,524,134 56,719,711 TOTAL INVESTMENT PORTFOLIO 97,505,443 97,712,974 OTHER ASSETS, LESS LIABILITIES 0.3% 258,658 NET ASSETS 100.0% 97,971,632 SUMMARY OF INVESTMENT PORTFOLIO Investment Category Treasury Bills 0.2 Promissory Notes 5.4 Bankers Acceptances Bearers Deposit Notes Commercial Paper Short-Term Bonds

15 Scotia U.S. $ Money Market Fund (Continued) SUPPLEMENTARY SCHEDULES As at 2011 and 2010 Interest rate risk (note 3) The table below summarizes the Fund s exposure to interest rate risk by the remaining term to maturity of the Fund s portfolio of money market instruments. Money Market Instruments* 2011 (U.S.$) 2010 (U.S.$) Less than 1 year $97,712,974 $106,878, years 3-5 years 5-10 years H 10 years Total $97,712,974 $106,878,465 * Excludes cash Credit risk (note 3) The table below summarizes the credit ratings of the money market instruments, excluding cash, held by the Fund Total Money Market Instruments (%) Total Money Market Instruments (%) Short-Term Rating R1-High R1-Middle R1-Low Bond Credit Rating AAA AA A Total Liquidity risk (note 3) The table below summarizes a maturity analysis of cash flows associated with the maturities of the Fund s financial liabilities: Less than 3 months (U.S.$) Less than 3 months (U.S.$) Accounts payable and accrued liabilities $7 $10 value classification (note 2) The tables below illustrate the classification of the Fund s financial instruments within the fair value hierarchy as at 2011 and 2010, respectively Level 1 (U.S.$) Level 2 (U.S.$) Level 3 (U.S.$) Total (U.S.$) Money Market Instruments $ $97,712,974 $ $97,712, Level 1 (U.S.$) Level 2 (U.S.$) Level 3 (U.S.$) Total (U.S.$) Money Market Instruments $ $106,878,465 $ $106,878,465 During the periods ended 2011 and 2010, there were no transfers between Level 1 and Level 2. CASH EQUIVALENT FUNDS 13

16 Scotia Short Term Bond Fund STATEMENT OF NET ASSETS As at ASSETS Investments at fair value $28,030,940 $5,708,736 Cash 961,747 99,061 Accrued investment income 168,260 40,907 29,160,947 5,848,704 LIABILITIES Payable for securities purchased 426,064 Accrued expenses ,064 Net Assets $29,160,842 $5,422,640 NET ASSETS PER SERIES Series M Units $29,160,842 $5,422,640 UNITS OUTSTANDING Series M Units 2,910, ,793 NET ASSETS PER UNIT Series M Units $ $ 9.86 STATEMENT OF OPERATIONS For the periods ended STATEMENT OF CHANGES IN NET ASSETS For the periods ended * NET ASSETS BEGINNING OF PERIOD Series M Units $ 5,422,640 $ Series M Units 1,038,038 (20,404) DISTRIBUTIONS TO UNITHOLDERS From net investment income Series M Units (623,986) (23,394) UNIT TRANSACTIONS Proceeds from issue Series M Units 30,134,490 6,246,277 Reinvested distributions Series M Units 508,974 11,352 Payments on redemption Series M Units (7,319,314) (791,191) 23,324,150 5,466,438 INCREASE (DECREASE) IN NET ASSETS Series M Units 23,738,202 5,422,640 NET ASSETS END OF PERIOD Series M Units $29,160,842 $5,422,640 * Fund s inception date August 26, * INVESTMENT INCOME Interest $ 680,501 $ 32,882 Securities lending 1, ,670 32,882 EXPENSES Management fees (note 5) 14, Harmonized Sales Tax/Goods and Services Tax 5, Audit fees 13,150 10,702 Custodian fees 1, Filing fees 13,940 2,324 Legal fees 3, Unitholder reporting costs 6,554 2,888 Unitholder administration and service fees 42,798 10,036 Overdraft charges ,148 28,155 Absorbed expenses (74,465) (26,630) 26,683 1,525 Net investment income (loss) 654,987 31,357 Net realized gain (loss) on investments sold 13,384 (10,998) Net gain (loss) foreign exchange (20) Change in unrealized appreciation (depreciation) of investments 369,687 (40,763) Net gain (loss) on investments 383,051 (51,761) Increase (decrease) in Net Assets from operations $1,038,038 $(20,404) Series M Units $1,038,038 $(20,404) PER UNIT Series M Units $ 0.51 $ (0.05) INCOME FUNDS 14

17 Scotia Short Term Bond Fund (Continued) STATEMENT OF INVESTMENT PORTFOLIO As at 2011 Face BOND AND DEBENTURE INSTRUMENTS 96.1% Federal Bonds 34.2% Canada Housing Trust No , % due Sep. 15, , ,454 1,170, % due Mar. 15, ,172,340 1,173,698 5,780, % due Jun. 15, ,922,193 6,137,232 2,255, % due Jun. 15, ,344,387 2,373,866 9,723,721 9,971,250 Provincial Bonds 15.5% Province of British Columbia 380, % due Aug. 23, , ,054 Province of Manitoba 660, % due Dec. 3, , ,981 Province of Ontario 550, % due Jun. 2, , ,536 2,650, % due Sep. 8, ,776,473 2,805,868 4,526,321 4,516,439 Mortgage-Backed Securities 0.3% Schooner Trust 75, % due Sep. 12, ,305 79,541 Corporate Bonds 39.2% 407 International Inc. 600, % due Jan. 20, , ,340 Bank of Montreal 550, % due Mar. 10, , ,807 Bayerische Motoren Werke AG 600, % due Mar. 28, , ,103 Bell Canada 550, % due Dec. 2, , ,921 Canadian Imperial Bank of Commerce 600, % due Nov. 8, , ,727 Canadian Natural Resources Limited 150, % due Jun. 1, , ,864 Caterpillar Financial Services Limited 100, % due Jun. 3, , ,794 Enbridge Pipelines Inc. 300, % due Sep. 8, , ,781 EnCana Corporation 600, % due Mar. 12, , ,202 GE Capital Canada Funding Company 600, % due Feb. 11, , ,891 Golden Credit Card Trust 250, % due May 15, , ,361 Greater Toronto Airports Authority 550, % due Feb. 15, , ,137 Honda Canada Finance Inc. 600, % due Sep. 26, , ,710 Hydro One Inc. 300, % due Sep. 11, , ,396 National Bank of Canada 550, % due Apr. 26, , ,301 NAV Canada 550, % due Feb. 24, , ,010 OMERS Realty Corporation 600, % due May 5, , ,077 Royal Bank of Canada 600, % due May 7, , ,567 Thomson Reuters Corporation 500, % due Mar. 31, , ,222 Toronto-Dominion Bank, The 600, % due Nov. 19, , ,652 VW Credit Canada, Inc. 600, % due Nov. 18, , ,627 Wells Fargo Financial Corporation Canada 600, % due Nov. 3, , ,773 11,338,873 11,437,263 Face BOND AND DEBENTURE INSTRUMENTS (cont d) Short-Term Bond 6.9% Canada Housing Trust No. 1 (Floating Rate) 2,025, % due Sep. 15, ,034,796 2,026,447 TOTAL INVESTMENT PORTFOLIO 27,702,016 28,030,940 OTHER ASSETS, LESS LIABILITIES 3.9% 1,129,902 NET ASSETS 100.0% 29,160,842 SUMMARY OF INVESTMENT PORTFOLIO Investment Category Federal Bonds Provincial Bonds Mortgage-Backed Securities Corporate Bonds Short-Term Bond 6.9 Money Market Instruments 7.3 INCOME FUNDS 15

18 Scotia Short Term Bond Fund (Continued) SUPPLEMENTARY SCHEDULES As at 2011 and 2010 Interest rate risk (note 3) The table below summarizes the Fund s exposure to interest rate risk by the remaining term to maturity of the Fund s portfolio of bond and debenture instruments. Interest Rate Exposure* Less than 1 year $ 2,446,131 $ 983, years 5,212,739 2,029, years 20,372,070 1,796, years 504,419 Total $28,030,940 $5,314,289 * Excludes cash, money market instruments and preferred shares as applicable As at 2011, had the prevailing interest rates increased or decreased by 0.25%, assuming a parallel shift in the yield curve and all other variables held constant, Net Assets would have decreased or increased, respectively, by $184,104, or approximately 0.6% of the total Net Assets ( 2010 $32,814, or approximately 0.6% of the total Net Assets). In practice, actual results may differ from this sensitivity analysis and the difference could be material. Credit risk (note 3) The table below summarizes the credit ratings of the bond and debenture instruments, excluding cash and money market instruments but including preferred shares, held by the Fund Total Bond and Debenture Instruments (%) Total Bond and Debenture Instruments (%) AAA AA A BBB Total Liquidity risk (note 3) The table below summarizes a maturity analysis of cash flows associated with the maturities of the Fund s financial liabilities: Less than 3 months Less than 3 months Accounts payable and accrued liabilities $105 $426,064 value classification (note 2) The tables below illustrate the classification of the Fund s financial instruments within the fair value hierarchy as at 2011 and Bond and Debenture Instruments $ $28,030,940 $ $28,030, Bond and Debenture Instruments $ $ 5,314,289 $ $ 5,314,289 Money Market Instruments 394, ,447 $ $5,708,736 $ $5,708,736 During the periods ended 2011 and 2010, there were no transfers between Level 1 and Level 2. INCOME FUNDS 16