Canadian Utilities & Telecom Income Fund

As of March 31, 2021, the Net Asset Value (“NAV”) of UTE.UN was at $9.97 versus $10.23 on December 31st 2020. Unitholders received regular distributions totaling $0.17996 during the quarter. The unit’s closing price on March 31st, 2021 was $9.90 which represents a discount of 0.70% to its underlying NAV.

The first quarter of 2021 was marked by continued strength in North American equity markets which closed at or near all-time highs on expectations the rollout of vaccines around the world will lead to strong global GDP growth and corporate earnings in 2021. Central banks in the meantime remained committed to a policy of monetary easing in spite of stronger economic growth and inflation numbers while governments continued to pass significant stimulus packages despite substantial deficits.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were 3.43% and 9.06% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 16.17%. Stock within the Portfolio had varied results with Transalta Corp leading the way with a 23.56% return. Innergex Renewable Energy was the underperformer, down -21.45% while held within the portfolio during this period.

Volatility as measured by the CBOE Volatility Index (“VIX”) continued to decline in the first quarter with the exception of late January as the so-called “Reddit Rally” fueled fierce price jumps in stocks such as Gamestop and AMC before regulators stepped in to limit trading. The manager continued to be opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 2.1% of portfolio written during the period vs. 6.0% on average during the previous quarter.

The Fund held an average cash position of 1.7% during the period vs. 2.0% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of December 31, 2020, the Net Asset Value (“NAV”) of UTE.UN was at $10.23 versus $9.48 on September 30, 2020. Unitholders received regular distributions totaling $0.16818 during the quarter. The unit’s closing price on December 31, 2020 was $9.84 which represents a discount of 3.81% to its underlying NAV.

North American equity markets started off the fourth quarter with some trepidation as investors became increasingly concerned about the uncertainty of the U.S. election on November 3rd as well as the rise of new Covid-19 cases around the Globe. By early November, with the election results in and more importantly, promising vaccine news from two companies in dealing with the virus, markets rallied significantly and trended higher into the end of the year.

The total returns for the Utility and Telecommunication stocks for the quarter were 5.58% and 4.38% respectively and the return for the quarter of the Oil and Gas Storage and Transportation stocks was 2.30%. Stock within the Portfolio had varied results with TransAlta Renewables Inc. leading the way with a 31.80% return. WEC Energy Group Inc. was the underperformer, down 6.76% while held within the portfolio during this period.

The CBOE Volatility Index (VIX) ended the year in the mid to low twenties after experiencing a spike to the low forties at the end of October. While there have been flashes of uncertainty resulting in elevated VIX figures now and then, we are a long way off the extremes of low 80’s that we saw at the end of March. The manager was opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 6.0% of portfolio written during the period vs. 8.2% on average during the previous quarter.

The Fund held an average cash position of 2.0% during the period vs. 4.0% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the fourth quarter 50% hedged back into Canadian dollars.

As of September 30, 2020, the Net Asset Value (“NAV”) of UTE.UN was at $9.48 versus $8.90 on September 30, 2020. Unitholders received regular distributions totaling $0.16007 during the quarter. The unit’s closing price on September 30, 2020 was $9.12 which represents a discount of 3.80% to its underlying NAV.

North American equity markets continued their impressive rally from the second quarter of 2020, as investors believe that central banks and governments will continue with unprecedented stimulus. Markets corrected in September though as the leadership groups such as mega cap technology, discretionary and communication services paused. The third quarter total return for S&P/TSX Index was 4.7% while the S&P 500 Index rose 8.9%.

The total returns for the Utility and Telecommunication stocks for the quarter were 11.02% and 3.19% respectively and the return for the quarter of the Oil and Gas Storage and Transportation stocks was -4.12%. Stock within the Portfolio had varied results with Brookfield Renewable partner leading the way with a 36.34% return. Gibson Energy Inc was the underperformer, down -11.57% while held within the portfolio during this period.

Volatility as measured by the CBOE Volatility Index (“VIX”) drifted lower for the quarter but remained high relative to levels experienced pre-COVID 19. In fact, volatility has never been higher when the S&P 500 reached new highs as it is exhibiting now. The manager continued to be opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 8.2% of portfolio written during the period vs. 15.6% on average during the previous quarter.

The Fund held an average cash position of 4.0% during the period vs. 7.9% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of June 30, 2020, the Net Asset Value (“NAV”) of UTE.UN was at $8.90 versus $8.81 on March 31, 2020. Unitholders received regular distributions totaling $0.15424 during the quarter. The unit’s closing price on June 30, 2020 was $9.22 which represents a discount of 3.60% to its underlying NAV.

North American equity markets surged after a volatile first quarter of 2020 as investors believe central banks around the world will continue with unprecedented stimulus. The S&P/TSX Index rose 17.0% while the S&P 500 Index rose 20.5%. In Canada, Technology stocks led the advance with a 68% return in the quarter while Communication stocks were the only group in the red, down 1%. In the U.S. every group had positive performance in the second quarter with Consumer Discretionary stocks returning the most, up 33%

The total returns for Utility and Telecommunication stocks for the quarter were 3.8% and negative 1.5% respectively and the return for the quarter of Oil and Gas Storage and Transportation stocks was 4.5%. Stock within the Portfolio had varied results with Boralex Inc leading the way with a 24.3% return. Parkland Corp was the underperformer, down -12.7% while held within the portfolio during this period.

Volatility in stocks peaked near the end of the first quarter and has since drifted lower during the second quarter back to more typical levels by the end of June. The Fund continues to selectively overwrite many of the stocks in the portfolio. The average overwritten level in the second quarter was 15.6% compared to 3.4% in the first quarter.

The Fund held an average cash position of 7.9% during the period vs. 4% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of March 31, 2020, the Net Asset Value (“NAV”) of UTE.UN was at $8.81 versus $10.14 on December 31, 2019. Unitholders received regular distributions totaling $0.1829 during the quarter. The unit’s closing price on March 31, 2020 was $8.53 which represents a discount of 3.18% to its underlying NAV.
The volatility experienced in the first quarter of 2020 has been truly historic across all asset classes as global markets and economies have been gripped by the pandemic COVID-19 (Coronavirus) which has infected over 2 million plus individuals to date while causing over 129,000 fatalities so far. After reaching all-time highs in the third week of February 2020, North American equity markets declined in the mid-30% range to the low reached on March 23rd, before rallying 15%-20% to end the quarter. Central banks and governments around the globe have responded with unprecedented monetary and fiscal policies to prop up economies and keep funding markets open.
The total return for the S&P/TSX Composite Index during the first quarter was -20.9%, while S&P 500 Index had a total return of -19.6%. All eleven sectors in the S&P/TSX Composite Index declined in the first quarter with the Information Technology sector outperforming, but still down 3.7%, while the Energy sector continued its underperformance of the past few years, declining 37.2% as the price of oil, as measured by WTI Cushing OK Spot, dropped 66.5%. In the U.S., the Information Technology sector also outperformed but still declined 11.9%, while the Energy sector was also the worst performing south of the border, down 50.5%.
The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were -5.28% and -9.88% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was -22.54%. Stock within the Portfolio had varied results with Innergex Renewable Energy leading the way with a 14.67% return. Keyera Corp was the underperformer, down -59.57% while held within the portfolio during this period.
After several years of generally muted volatility for many months at a time, the VIX index which measures the average implied volatility of the S&P 500 index, spiked to levels not seen since the financial crisis of 2008; it topped 80% in mid-March. The Fund had on average 3.4% of portfolio written during the period vs. 11.7% on average during the previous quarter.
The Fund held an average cash position of 4.2% during the period vs. 5.0% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of December 31, 2019, the Net Asset Value (“NAV”) of UTE.UN was at $10.14 versus $9.94 on September 30, 2019. Unitholders received regular distributions totaling $0.1748 during the quarter. The unit’s closing price on December 31, 2019 was $9.90 which represents a discount of 2.37% to its underlying NAV.

North American equity markets continued their impressive rally from the first three quarters of 2019 with most indices ending the year near all-time highs. U.S. markets led the way in the fourth quarter on expectations a trade resolution between the U.S. with China was to be announced in early 2020. The total return for the S&P/TSX Index in the fourth quarter was 3.2%, while the S&P 500 Index had a total return of 9.1%. In Canada, 7 of 11 sectors generated a positive total return for the quarter, with Information Technology sector leading the way up 10.8%, while Health Care lagged for the third consecutive quarter, down 5.9%, as Cannabis stocks continued to decline. The U.S. market saw 10 of 11 sectors generate positive performance, with the Information Technology sector also leading the way, up 14.4%, while the defensive Real Estate sector lagged during the quarter, down 0.5%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were 1.98% and 2.85% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 6.88%. Stock within the Portfolio had varied results with Gibson Energy Inc. leading the way with a 18.33% return. Edison International was the underperformer, down 15.52% while held within the portfolio during this period.

Volatility levels as measured by the CBOE SPX Volatility Index (“VIX”) were at the low end of the range for most of the period. The manager was opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 9.5% of portfolio written during the period vs. 12.4% on average during the previous quarter.

The Fund held an average cash position of 3.0% during the period vs. 5.0% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of September 30, 2019, the Net Asset Value (“NAV”) of UTE.UN was at $9.94 versus $9.52 on June 28, 2019. Unitholders received regular distributions totaling $0.1697 during the quarter. The unit’s closing price on September 30, 2019 was $9.85 which represents a discount of 0.91% to its underlying NAV.

North American equity markets were choppy during the third quarter of 2019 fueled by trade uncertainties and other global concerns (Hong Kong, Saudi Arabia and Brexit). Indices ebbed and flowed between positive and negative returns over the period, only to end up slightly positive. Many economic indicators around the globe are showing signs of deceleration or a slowdown, with most Manufacturing PMI’s currently below 50, which points to a contraction. Markets have continued to price in expectations that central banks around the world will be more accommodative with interest rate cuts. The total return for the S&P/TSX Index during the period was 2.5%, while the total return for S&P 500 Index was 2.9%, when measured in Canadian dollars. In Canada, 9 of 11 sectors were positive for the quarter, with the defensive, high yielding Utilities sector leading the way with a total return of 10.1%, while Health Care lagged significantly, down 30.0%, weighed down by Cannabis stocks. The U.S. market saw 8 of 11 sectors generate positive performance, with the Utilities sector leading the way again, up 9.3%, while the Energy sector continues to be the laggard, down 6.3%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were 10.12% and 0.02% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 2.83%. Stock within the Portfolio had varied results with Brookfield Renewable Partners LP leading the way with a 20.39% return. Superior Plus Corp was the underperformer, down 15.86% while held within the portfolio during this period.

Volatility levels as measured by the CBOE SPX Volatility Index (“VIX”) spiked in early August as equity markets pulled back on trade war concerns and weak economic data. The manager was opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 12.4% of portfolio written during the period vs. 10.0% on average during the previous quarter.

The Fund held an average cash position of 5.0% during the period vs. 5.4% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of June 28, 2019, the Net Asset Value (“NAV”) of UTE.UN was at $9.52 versus $9.51 on March 29, 2019. Unitholders received regular distributions totaling $0.1665 during the quarter. The unit’s closing price on June 28, 2019 was $9.23 which represents a discount of 3.1% to its underlying NAV.

North American equity markets continued their impressive rally from the first quarter of 2019, albeit volatile as markets rose in April, declined significantly in May and advanced strongly in June. Markets have priced in expectations that central banks around the world would be more accommodative with interest rate cuts. The S&P/TSX Index rose 1.7% while the S&P 500 Index rose 3.8%. In Canada, 7 of 10 sectors were positive for the quarter, with Information Technology leading the way up 14.2%, while Health Care lagged, down 9.4%. The U.S. market saw 10 of 11 sectors generate positive performance, with the Financials sector leading the way, up 7.4%, while Energy was the lone sector to be in the red during the quarter, down 3.7%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were 5.43% and negative -0.79% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 2.40%. Stock within the Portfolio had varied results with Cogeco Communications Inc leading the way with a 11.0% return. Enbridge Inc was the underperformer, down -4.4% while held within the portfolio during this period.
Volatility levels as measured by the CBOE SPX
Volatility Index (“VIX”) remained low for most of the period other than the brief spike in early May as equity markets pulled back on trade war concerns and the effect on the economy. The manager was opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy as the Fund had on average 9.2% of portfolio written during the period vs. 14.8% on average during the previous quarter.

The Fund held an average cash position of 5.0% during the period vs. 7.0% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of March 29, 2019, the Net Asset Value “NAV” of UTE.UN was at $9.51 versus $8.72 on December 31, 2018. Unitholders received regular distributions totaling $0.1593 during the quarter. The unit’s closing price on March 29, 2019 was $9.35 which represents a discount of 1.68 percent to its underlying NAV.

After a dreadful fourth quarter of 2018, North American equity markets staged an impressive recovery in the first quarter of 2019 with the S&P/TSX Index advancing 13.3 percent while the S&P 500 Index rose 13.6 percent. As fears of a trade war between the United States and China subsided and central banks around the globe changed to a more accommodative stance on forward looking interest rates, risk assets rallied strongly. In Canada, all 11 sectors were positive for the quarter, with Health Care, the worst performing sector in Q4 leading the way, producing a 49.1 percent return, mostly due to strength in the Cannabis sector. The U.S. market also saw all 11 sectors generate positive performance, with the Information Technology sector leading the way, up 19.9 percent, while the defensive U.S. Health Care sector lagged, up 6.6 percent.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were 16.12 percent and 9.81 percent respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 11.48 percent. Stock within the Portfolio had varied results with Gibson Energy Inc leading the way with a 25.69 percent return. Verizon Communications Inc was the underperformer, down -6.65 percent while held within the portfolio during this period.

As equity markets rallied, volatility declined, as measured by the Chicago Board Options Exchange Volatility Index. (“VIX”) After starting the year above 25, the VIX declined for most of the period ending the quarter just under 14. The manager was opportunistic with the Strathbridge Selective Overwriting (“SSO”) strategy and the Fund had on average 24.1 percent of portfolio written during the period vs. 21.5 percent on average during the previous quarter.

The Fund held an average cash position of 5.0 percent during the period vs. 10.8 percent during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50 percent hedged back into Canadian dollars.

As of December 31, 2018, the Net Asset Value (“NAV”) of UTE.UN was at $8.72 versus $9.32 on September 28, 2018. Unitholders received regular distributions totaling $0.1604 during the quarter. The unit’s closing price on December 31, 2018 was $8.29 which represents a discount of 4.93% to its underlying NAV.

North American markets were dreadful in the 4th quarter of 2018, with the S&P/TSX Index declining 10.1% while the S&P 500 Index declined 13.5%, weighed down by the implications of tighter global monetary policy, trades wars, soaring valuations along with heightened geopolitical risks. In Canada, 8 of 11 sectors were negative for the quarter, with Health Care leading the way down, producing a negative 35.3% return, mostly due to weakness in the Cannabis sector. The U.S. market saw 10 of 11 sectors generate negative performance, with Energy leading all declines down 23.8%, while the defensive Utilities sector was the lone sector with a positive return in the quarter, up 1.4%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecommunication Services Index for the quarter were -1.29% and 2.01% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was -2.70%. Stock within the Portfolio had varied results with Exelon Corp leading the way with a 8.94% return. Transalta Corp and Crius Energy Trust were the underperformers, down -22.68% and -15.11% respectively while held within the portfolio during this period.

Equity volatility, as measured by the Chicago Board Options Exchange Volatility Index (“VIX”), started the quarter around 12 and accelerated into year-end, closing above 25. The rise in volatility created more opportunities to utilize the Strathbridge Selective Overwriting (“SSO”) strategy. The Fund had on average 17.2% of portfolio written during the period vs. 9.1% on average during the previous quarter.

The Fund held an average cash position of 10.8% during the period vs. 9.2% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 50% hedged back into Canadian dollars.

As of September 28, 2018, the Net Asset Value (“NAV”) of UTE.UN was at $9.32 versus $9.10 on June 29, 2018. Unitholders received regular distributions totaling $0.1635 during the quarter. The unit’s closing price on September 28, 2018 was $8.90 which represents a discount of 4.5% to its underlying NAV.

North American markets were mixed in the 3rd quarter, with the Canadian S&P/TSX Index declining 0.6% and the U.S. S&P 500 Index gaining 7.7%. In the Canadian market, 6 of 11 sectors were positive for the quarter, with Health Care leading the way up 31.1% due to strength in the Cannabis sector. The U.S. market saw 8 of 11 sectors with positive performance, also led by Health Care up 14.1%, while the Real Estate, Energy and Materials sectors lagged the broader market with negative returns.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were -0.26% and 3.47% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was -6.97%. Stocks within the Portfolio had varied results with Enercare Inc leading the way with a 61.34% return after being acquired by Brookfield Infrastructure Partners. Meanwhile, Enbridge Inc and Northland Power Inc. were the underperformers, down 10.04% and 7.93% respectively while held within the portfolio during this period.

Equity volatility, as measured by the Chicago Board Options Exchange Volatility Index (“VIX”), remained low and traded in a narrow range between 10 and 16 for most of the quarter. The Fund opportunistically wrote call options during the period as the Fund on average had 9.1% of portfolio written during the period vs. 8.7% on average during the previous quarter.

The Fund held an average cash position of 9.2% during the period vs. 5.8% during the previous quarter. The U.S. dollar exposure was actively hedged throughout the period and ended the third quarter 75% hedged back into Canadian dollars.

As of June 29, 2018, the Net Asset Value (“NAV”) of UTE.UN was at $9.10 versus $9.05 on March 29, 2018. Unitholders received regular distributions totaling $0.1568 during the quarter. The unit’s closing price on June 29, 2018 was $8.76 which represents a discount of 3.74 percent to its underlying NAV.

As noted in our previous quarterly comment, the first quarter of 2018 was especially tumultuous. The second quarter was much more constructive with the broad indices not only re-testing the 2017 highs but moving to new all-time highs. The S&P TSX Index had a total return of 6.75 percent in this period

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were -0.42 percent and 3.69 percent respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 13.28 percent. Stocks within the Portfolio had varied results with Enbridge Inc leading the way with 17.82 percent return. Meanwhile, Kinder Morgan Canada and Just Energy Group Inc were the underperformers, down -8.72 percent and -8.44 percent respectively while held within the portfolio during this period.

Volatility as measured by the S&P TSX VIX index moved in a range between 10% and 15% for most of this quarter with a few days dipping lower into the single digits. In this fairly quiet quarter, implied volatility stayed close to its long-run average in the low teens.

The Fund saw more opportunities in its covered-call writing strategy and, on average, the Fund was written on 8.7% during the quarter versus 4.4% in the previous quarter.

As of March 29, 2018, the Net Asset Value (“NAV”) of UTE.UN was at $9.05 versus $9.95 on December 29, 2017. Unitholders received regular distributions totaling $0.1654 during the quarter. The unit’s closing price on March 29, 2018 was $8.80 which represents a discount of 2.76% to its underlying NAV.

Global equity markets experienced heightened volatility in the first quarter on fears surrounding rising interest rates, trade policy and market valuations. The S&P/TSX Composite Index declined 4.52% while the S&P 500 Index in the U.S. was down 0.76% and the MSCI EAFE Index off 1.58%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were -5.85% and -6.77% respectively and the return of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was -13.33% during the same period. Stocks within the Portfolio had varied results with Parkland Fuel Corp leading the way with 9.05% return. Meanwhile, Enbridge Inc and Altagas Ltd were the underperformers, down -18.78% and -14.95% respectively while held within the portfolio during this period.

Volatility as measured by the S&P TSX VIX index was quiet going into year-end but spiked up in early February to over 20% when the market saw several days of marked weakness, however, has since returned to the mid-teens near the long-term average of the index.

The Fund saw few opportunities in its covered-call writing strategy and, on average, the Fund was written on 4.4% during the quarter versus 3.6% in the previous quarter.

The U.S. dollar exposure was 50% hedged back into Canadian dollars throughout the period. The U.S. Dollar increased 2.51% vs. the Canadian dollar during the quarter.

As of December 29, 2017, the Net Asset Value (“NAV”) of UTE.UN was at $9.95 versus $10.21 on September 29, 2017. Unitholders received regular distributions totaling $0.1775 during the quarter. The unit’s closing price on December 29, 2017 was $10.40 which represents a premium of 4.5% to its underlying NAV.

Global equity markets continued to move higher in the fourth quarter on the back of a global synchronized recovery and the passage of the U.S. Tax Cuts and Jobs Act. The S&P/TSX Composite Index increased 4.43% while the S&P 500 Index in the U.S. was up 6.64% and the MSCI EAFE Index up 4.30%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were 2.62% and 4.02% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was -1.28%. Stocks within the Portfolio had varied results with Public Service Enterprise GP leading the way with 14.3%% return. Meanwhile, Verizon Communications Inc and AT&T Inc were the underperformers, down -6.9% and -6.2% respectively while held within the portfolio during this period.

Volatility remained low through most of the quarter and hit an all-time low towards the end of November as stocks rallied and investor sentiment was on the rise.

Given the extreme low levels of volatility, the Fund saw less opportunities in its covered-call writing strategy and, on average, the Fund was written on 2.6% during the quarter versus 2.2% in the previous quarter.

The U.S. dollar was mostly hedged back into Canadian dollars throughout the period and ended the year with approximately 100% of the U.S. dollar exposure hedged. The U.S. Dollar increased 0.3% vs. the Canadian dollar during the quarter.

As of September 30, 2017, the Net Asset Value (“NAV”) of UTE.UN was at $10.21 versus $10.76 on June 30, 2017. Unitholders received regular distributions totaling $0.1845 during the quarter. The unit’s closing price on September 30, 2017 was $10.50 which represents a premium of 2.84% to its underlying NAV.

Global equity markets continued to move higher in the third quarter with the hope that the new administration will be able to boost growth with supply side fiscal policy tools and lower regulatory oversight. The S&P/TSX Composite Index increased 3.68% while the S&P 500 Index in the U.S. was up 4.48% and the MSCI EAFE Index up 5.47%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were -2.00% and 2.84%% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 1.89%. Stocks within the Portfolio had varied results with Cogeco Communications Inc leading the way with 16.7%% return. Meanwhile, TransAlta Corp and TransAlta Renewables Inc were the underperformers, down 11.48% and 10.64% respectively while held within the portfolio during this period.

Volatility remained fairly subdued through most of the quarter although the VIX did spike marginally higher than 15 towards the middle of August as markets were skittish on continued gridlock in Washington.

With the performance in the Utilities sector generally positive, the Fund saw less opportunities in its covered-call writing strategy and, on average, the Fund was written on 2.2% during the quarter versus 2.2% in the previous quarter.

The U.S. dollar was mostly hedged back into Canadian dollars throughout the period and ended September with approximately 100% of the U.S. dollar exposure hedged, helping negate some of the negative impact of the 3.8% decline in the U.S. dollar vs. the Canadian dollar during the quarter.

As of June 30, 2017, the Net Asset Value (“NAV”) of UTE.UN was at $10.76 versus $10.77 on March 31, 2017. Unitholders received regular distributions totaling $0.1896 during the quarter. The unit’s closing price on June 30, 2017 was $10.66 which represents a discount of 0.93% to its underlying NAV.

Global equity markets continued to move higher in the second quarter with the hope that the new administration will be able to boost growth with supply side fiscal policy tools and lower regulatory oversight. The S&P/TSX Composite Index fell 1.6% while the S&P 500 Index in the U.S. was up 3.1% and the MSCI EAFE Index up 6.3%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were 2.5% and 3.4% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 2.3%. Stock within the Portfolio had varied results with Veresen leading the way with 27.5% return. Meanwhile, Just Energy Group Inc was the underperformer, down 15.2% while held within the portfolio during this period.

Volatility remained fairly subdued through most of the quarter although the VIX did spike marginally higher than 15 towards the middle of April as markets were skittish on continued gridlock in Washington.

With the performance in the Utilities sector generally positive, the Fund generally saw less opportunities in its covered-call writing strategy and, on average, the Fund was written on 2.2% during the quarter versus 2.4% in the previous quarter.

The U.S. dollar was mostly hedged back into Canadian dollars throughout the period and ended June with approximately 100% of the U.S. dollar exposure hedged, helping negate some of the negative impact of the 3.5% decline in the U.S. dollar vs. the Canadian dollar during the quarter.

As of March 31, 2017, the Net Asset Value (“NAV”) of UTE.UN was at $10.77 versus $10.58 on December 30, 2016. Unitholders received regular distributions totaling $0.18428 during the quarter. The unit’s closing price on March 31, 2017 was $10.42 which represents a discount of 3.25% to its underlying NAV.

Global equity markets continued to move higher in the first quarter with the hope that the new administration will be able to boost growth with supply side fiscal policy tools and lower regulatory oversight. The S&P/TSX Composite Index rose 2.41% while the S&P 500 Index in the U.S. was up 6.06% and the MSCI EAFE Index was down 7.40%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were 7.26% and 6.89% respectively while the quarterly return of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 0.30%. Stock within the Portfolio had varied returns with Brookfield Infrastructure Partners L.P. and Veresen Inc. leading the way with returns of 16.06% and 14.15% respectively. Meanwhile, Altagas Ltd. and Inter Pipeline Ltd. were the underperformers, down 7.62% and 4.08% respectively while held within the portfolio during the period.

Volatility remained fairly subdued through most of the quarter although the CBOE Volatility Index (VIX) did spike marginally higher than 15% towards the end of March as markets were skittish on the inability of Republicans to get the Affordable Care Act revoked.

With the performance in the Utilities sector generally positive, the Fund generally saw less opportunities in its covered-call writing strategy and, on average, the Fund was written on 2.4% during the quarter versus 5.2% in the previous quarter.

At the end of the quarter, the Fund’s U.S. dollar exposure was approximately 100% hedged on its US dollar exposure.

As of December 31, 2016, the Net Asset Value (“NAV”) of UTE.UN was at $10.58 versus $11.00 on September 30, 2016. Unitholders received regular distributions totaling $0.18707 during the quarter. The unit’s closing price on December 30, 2016 was $10.26 which represents a discount of 3% to its underlying NAV.

Most global equity markets rallied strongly in the fourth quarter of 2016 with the majority of the performance coming after the election of Donald Trump as the President of the United States on November 8, 2016. The S&P/TSX Composite Index rose 4.5% while the S&P 500 Index in the U.S. was up 3.8%. Meanwhile, Asian markets declined during the period, dragging the international MSCI EAFE Index down 0.6%.

The total returns for the S&P/TSX Capped Utilities Index and the S&P/TSX Capped Telecom Services Index for the quarter were -1.54% and -2.93% respectively and the return for the quarter of the S&P/TSX Oil and Gas Storage and Transportation Sub-Index was 0.43%. Stock within the Portfolio had varied returns with Parkland Fuel Corp. leading the way with 39.05%. Capital Power Corp. and Superior Plus Corp. were the other outstanding performers advancing 14.54% and 9.7% respectively. Meanwhile, Northland Power Inc. and Keyera Corp. were the underperformers, down 11.7% and 10.11% respectively while held within the portfolio during this period.

Volatility moved higher heading into the U.S. election as the Chicago Board Options Exchange Volatility Index (VIX) went from 13% on October 24th to 22.5% on November 4th. After the election, volatility declined swiftly hitting a low for the year on December 21st at 10.9%.

With the performance in the Utilities sector generally being slightly negative and with volatility for names in this sector getting slightly elevated, the Fund generally saw some opportunities in its covered-call writing and, on average, the Fund was written on 5.2% during the quarter versus 2.5% in the previous quarter.

At the end of the quarter, the Fund’s U.S. dollar exposure was 50% hedged.

As of September 30, 2016, the Net Asset Value (“NAV”) of UTE.UN was at $11.00 versus $10.79 on June 30, 2016. Unitholders received regular distributions totaling $0.18556 during the quarter. The unit’s closing price on September 30, 2016 was $10.75 which represents a discount of 2.27% to its underlying NAV.

Global equity markets continued their slow and gradual climb higher during the third quarter shrugging off the surprise Brexit vote at the end of the second quarter. The S&P 500 Index advanced 3.85% during the period, while the S&P/TSX Composite rallied to close up 5.45% with fairly broad based sector gains.

The total returns for the S&P/TSX Capped Utilities Index, the S&P/TSX Capped Telecom Services Index and the S&P/TSX Oil and Gas Storage and Transportation Sub-Index for the quarter were 0.70%, 3.07% and 6.84%, respectively. Stock within the Portfolio had varied returns with Parkland Fuel Corp leading the way with 39.05%. Veresen Inc continued its impressive performance from the previous quarter advancing 24.93%. Meanwhile, TransAlta Corp lagged the group, down 7.39% for the period while held within the portfolio.

Volatility in the third quarter remained fairly benign except for a minor spike in the September as the S&P 500 moved below a very tight range. Volatility measured by the Chicago Board Options Exchange Volatility Index (VIX) stayed below 20 on a close basis through the quarter.

With the performance in the Utilities sector generally being positive and with volatility subdued, the Fund generally saw less opportunities in its covered-call writing during the period and ended the quarter with 4.6% of the portfolio overwritten. On average, the Fund was written on 2.5% during the quarter.

At the end of the quarter, the Fund’s U.S. dollar exposure was fully hedged.

As of June 30, 2016, the Net Asset Value (“NAV”) of UTE.UN was at $10.79 versus $10.62 on March 31, 2016. Unitholders received regular distributions totaling $0.18556 during the quarter.

The unit’s closing price on June 30, 2016 was $10.58 which represents a discount of 1.95% to its underlying NAV.

Global equity markets continued marginally higher through the second quarter maintaining a steady but gradual uptrend from the lows made in the prior quarter. The S&P 500 Index advanced 1.89% during the period, while the S&P/TSX Composite rallied on the back of continued gains in Crude Oil and Gold from the lows in February to close up 4.22%. The referendum held on June 23 for “Brexit” - the vote to decide whether Great Britain would exit from the European Union - resulted in a surprise Leave vote that led to a brief selloff in markets and a spike in volatility but the market rallied impressively at month end to offset most of the losses as a result of the vote.

The total returns for the S&P/TSX Capped Utilities Index, the S&P/TSX Capped Telecom Services Index and the S&P/TSX Oil and Gas Storage and Transportation Sub-Index for the quarter were 7.02%, 5.85% and 10.75%, respectively.

Stock within the Portfolio had varied returns with Veresen leading the way with 28.04%. Manitoba Telecom Services also had an impressive performance up 18.50% on the news that BCE agreed to acquire the company. Gibson Energy was the worst performing stock within the portfolio, down 10.06% due to a disappointing earnings miss and weakness in wholesale propane distribution.

Volatility in the second quarter remained fairly benign as measured by the Chicago Board Options Exchange Volatility Index (VIX) which stayed below 20 for most of the quarter but breached those levels at the end of the quarter as the “Brexit” vote drew near and on the surprise result. With the strong performance in the Utilities sector, the Fund generally saw less opportunities in its covered-call writing during the period and ended the quarter with 2.1% of the portfolio written vs. 5.0% at the end of the previous quarter. On average the Fund was written on about 4.1% during the quarter.

As the market started to look for dividend yielders for outperformance, the Fund’s cash position remained stable at 4.5% at the end of the quarter vs. 4.3% at the end of the previous quarter.

At the end of the quarter approximately 50% of the U.S. dollar exposure was hedged.

As of March 31, 2016, the Net Asset Value (“NAV”) of UTE.UN was at $10.62 versus $10.27 on December 31, 2015. Unitholders received regular distributions totaling $0.18131 during the quarter.

The unit’s closing price on March 31, 2016 was $10.58 which represents a discount of of just 4 cents to its underlying NAV.

Global equity markets were very volatile with a strong coordinated sell off from the beginning of the year to the second week of February before rallying impressively to end the quarter mostly unchanged. The S&P 500 Index advanced 1.35% during the period, while the S&P/TSX Composite rallied on the back of gains in Crude Oil from the lows in February to close up 4.54%.

The total returns for the S&P/TSX Capped Utilities Index, the S&P/TSX Capped Telecom Services Index and the S&P/TSX Oil and Gas Storage and Transportation Sub-Index for the quarter were 9.6%, 10.8% and 13.6%, respectively.

Stock within the Portfolio had mostly positive returns with Innergex Renewable Energy and Northland Power Inc leading the way up 25.9% and 16.4% respectively. Just Energy Group Inc., was the worst performing stock within the portfolio, down 18.4% due to low average natural gas prices and increasing competition.

The first quarter was fairly volatile, the Chicago Board Options Exchange Volatility Index (“VIX”) breached the 30 levels three times during January and February as a global growth scare led to greater nervousness among investors. The Fund was active in its covered-call writing during the period and ended the quarter with 5.0% of the portfolio written vs. 4.0% at the end of the previous quarter. On average the Fund was written on about 9.1% during the quarter.

As the market started to look at defensive sectors for outperformance, the Fund’s cash position remained stable at 4.3% at the end of the quarter vs. 5.3% at the end of the previous quarter.

The manager became more concerned with the Fund’s exposure to the US dollar during the quarter and increased the hedge to 100% of the U.S. dollar exposure from 50% hedged at the end of 2015.

As of December 31, 2015, the Net Asset Value (“NAV”) of UTE.UN was at $10.27 versus $10.62 on September 30, 2015. Unitholders received regular distributions totaling $0.18421 during the quarter.

The unit’s closing price on December 31, 2015 was $9.86 which represents a discount of 4.0% to its underlying NAV.

Global equity markets mostly advanced in the fourth quarter of 2015 with strong gains generated in October partially offset by weakness in December. The S&P 500 Index advanced 7.0% during the period, while the S&P/TSX Composite was an exception as it declined 1.4% due to weak commodity prices emanating from concerns surrounding slower growth in China and other emerging markets.

The total return for the S&P/TSX Capped Utilities Index, the S&P/TSX Capped Telecom Services Index and the S&P/TSX Oil and Gas Storage and Transportation Sub-Index for the quarter were -1.3%, 0.8% and -2.3%, respectively.

Stock within the Portfolio had varying total returns during the period with Algonquin Power and Utilities leading the way up 16.9%. Gibson Energy Inc. on the other hand, was the worst performing stock within the portfolio, down 19.2% due to its high leverage to crude oil which declined by 17.8% during the period.

After a fairly volatile third quarter, the Chicago Board Options Exchange Volatility Index (“VIX”) declined in the fourth quarter to an average level of 17.1 for the period. The Fund was active in its covered-call writing during the period and ended the quarter with 4.0% of the portfolio written vs. 5.1% at the end of the previous quarter.

As investment opportunities arose, the Fund’s cash position was reduced during the period with an average cash position of 11.8% and ended the quarter at 5.3% vs. 20.1% at the end of the previous quarter.

The Fund ended the quarter with approximately 50% of the U.S. dollar exposure hedged back to the Canadian dollar.

As of September 30, 2015, the Net Asset Value (“NAV”) of UTE.UN was at $10.62 versus $11.18 on June 30, 2015. Unitholders received regular distributions totaling $0.1914 during the quarter.

The unit’s closing price on September 30, 2015 was $10.13 which represents a discount of 4.61% to its underlying NAV.

Global equity markets were down across the board in the third quarter of 2015 due to concerns surrounding slower growth in emerging market economies (most notably China) and the effects on global growth. Global indices were down anywhere from 6.9% for the S&P 500 Index to 28.6% for the Shanghai SE A Share market, with the flash crash on August 24th contributing most of the weakness. The resource heavy S&P/TSX Composite was also down 8.6% during the quarter, due to its dependence on emerging market’s demand for its resources.

The total return for the S&P/TSX Capped Utilities Index, the S&P/TSX Capped Telecom Services Index and the S&P/TSX Oil and Gas Storage and Transportation Sub-Index for the quarter were 2.3%, 2.4% and -16.3%, respectively.

Stock within the Portfolio had varying total returns during the period with Just Energy Group Inc., a basket name for the Fund, leading the way up 24.3%, followed by maritime utility Emera Inc., up 13.6%. Parkland Fuel Corporation, a Canadian energy distributor, was the biggest drag to performance, down 14.9% due to its high leverage to crude oil which declined by 24.2% during the period.

Volatility was fairly subdued in July and the first half of August, but started to rise after the FOMC meeting in August when the minutes revealed there was less of chance for the Federal Reserve to embark on its first tightening cycle in over a decade. The Chicago Board Options Exchange Volatility Index (“VIX”) spiked over 45% to a level of 40.74 on August 24th, the same day as the flash crash when the Dow Jones Industrial Average was down more than 1,000 points intraday. The Fund was active in its covered-call writing during the period and ended the quarter with 5.1% of the portfolio written.

The Manager became more cautious and increased the Fund’s cash during the period. The Fund had an average cash position of 13.9% and ended the quarter at 20.1% vs. 4.3% in the previous quarter.

The Fund ended the period with approximately 70% of the U.S. dollar exposure hedged back to the Canadian dollar.

As of June 30, 2015, the Net Asset Value (“NAV”) of UTE.UN was at $11.18 versus $11.92 on March 31, 2015. Unitholders received regular distributions totaling $0.20721 during the quarter.

The unit’s closing price on June 30, 2015 was $11.02 which represents a discount of 1.4% to its underlying NAV.

Global equity markets generated mixed returns in the second quarter of 2015 due to concerns surrounding whether Greece would exit the Eurozone or not. European markets felt most of the brunt of “Grexit” risk as the DAX 30 in Germany and CAC 40 in France declined 8.5% and 4.8% respectively. Although the Shanghai Class A market declined 7.2% in June, it was still the top performing market globally in the 2nd quarter, rising 14%.

The total return for the S&P/TSX Capped Utilities Index for the quarter was -7.7% while the S&P/TSX Capped Telecom Services Sector Index had a total return of 6.7%.

Stock within the Portfolio had varying total returns during the period with U.S. natural gas distributor, NiSource Inc., leading the way up 6.6%, followed by Cogeco Cable Inc. which rose 6.4%. Meanwhile, Superior Plus Corporation, lagged the group, down 10.3% due to weakness in their specialty chemicals business.

Volatility during the quarter remained towards the low end of the range it has traded in the past few years. The Fund has been selective in its covered call writing and ended the quarter with 3.7% of the portfolio written.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 4.3% vs. 3.3% at the end of the previous quarter.

The Fund ended the period with approximately 80% of the U.S. dollar exposure hedged back to the Canadian dollar.

As of March 31, 2015, the Net Asset Value per unit was at $11.92 versus $12.62 on December 31, 2014. Unitholders received regular distributions totaling $0.21974 during the quarter.

The closing market price on March 31, 2015 was $12.29 which represents a premium of 3.1% to its underlying NAV.

The total return for the S&P/TSX Capped Utilities Index for the quarter was 3.6% with the continuation of low interest rates. Meanwhile, the S&P/TSX Capped Telecom Services Sector Index had a negative total return of -2.9% on increased regulatory headwinds in wireless and video as well as concerns of a new wireless entrant.

Stock within the Portfolio had varying total returns during the period with Superior Plus Corp. leading the way up 20%. Meanwhile, Manitoba Telecom Services Inc., which the Fund had no exposure to, lagged the investment universe, down 9.8% during the quarter.

After starting off 2015 at elevated levels, volatility slowly declined to end the first quarter at the low end of the range for the past few years. The Fund has been selective in its covered-call writing and ended the quarter with 2.4% of the portfolio written.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 3.3% vs. 1.0% at the end of the previous quarter. The allocation between the two sectors approximately 81% invested in utility stocks and 16% invested in telecom stocks.

The Fund ended the period with approximately 50% of the U.S. dollar exposure hedged back to the Canadian dollar.

As of December 31, 2014, the Net Asset Value (“NAV”) of UTE.UN was at $12.62 versus $12.64 on September 30, 2014. Unitholders received regular distributions totaling $0.21712 during the quarter plus a special distribution of $0.20 per unit that was paid on October 31, 2014.

The unit’s closing price on December 31, 2014 was $12.92 which represents a premium of 4.2% to its underlying NAV.

Most global equity markets retreated in the early part of the fourth quarter of 2014 on concerns around the U.S. Federal Reserve ending quantitative easing in October, a substantial decline in energy commodity prices as well as deflation risks surrounding Europe and Japan. However, most markets rebounded strongly into the end of the year as U.S. payrolls continued to strengthen and third quarter GDP in the U.S. came in well above expectations at 5%.

The total return for the S&P/TSX Capped Utilities Index for the quarter was 5.0% while the S&P/TSX Capped Telecom Services Sector Index had a total return of 8.7%. This compares favorably to the broader S&P/TSX Composite Index total return of -1.5% during the period which was dragged down by S&P/TSX Energy Index that had a total return of -23.6%.

Stocks within the Portfolio had varying total returns during the period with Enbridge Income Fund Holdings Inc. leading the way up 34.3%, with most of the performance coming after the company announced on December 4th, 2014 that it was receiving the Canadian Liquids Pipelines business, valued at approx. $17 billion from Enbridge Inc. Meanwhile, Gibson Energy Inc., which the Fund has some exposure to, lagged the group, down 21.4% during the quarter on weaker oil prices as the WTI Spot Cushing price declined 41.4% in the period.

Volatility levels remained at the low end of the range for most of the period and the Fund was less active with its covered call writing. The Fund ended the quarter with none of the portfolio securities subject to covered calls.

The Fund maintained a high investment position during the majority of the period but ended the quarter with a cash position of 1.0% vs. 3.6% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 66% invested in utility stocks and 34% invested in telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time.

As of September 30, 2014, the Net Asset Value (“NAV”) of UTE.UN was at $12.64 versus $12.73 on June 30, 2014. Unitholders received distributions totaling $0.22513 during the quarter.

The unit’s closing price on September 30, 2014 was $12.40 which represents a discount of 1.9% to its underlying NAV.

Many global equity markets reached all-time highs during the third quarter of 2014 before retreating into the end of the period due to concerns about slowing global growth as well as deflation risks surrounding Europe and Japan. U.S. equities outperformed Canadian and International stocks during the period, especially when converted into Canadian dollars as the U.S. dollar rose 4.7% vs. the Loonie.

The total return for the S&P/TSX Capped Utilities Index for the quarter was 0.4% while the S&P/TSX Capped Telecom Services Sector Index had a total return of -0.03%. This compares to the broader S&P/TSX Composite Index total return of -0.6% during the period with very diverse returns between sectors as the Consumer Staples sector advanced 12.0% while the Materials sector declined 10.5%

Stock within the Portfolio had varying total returns during the period with Keyera Corp. leading the way up 15.6%, with most to performance coming after the company reported better than expected 2nd quarter earnings on August 5th, 2014. All three divisions generated excellent cash flow primarily driven by higher volumes and stronger margins. Meanwhile, Transalta Corporation lagged the group, down 8.9% during the quarter on weaker power prices in Alberta

Volatility levels remained at the low end of the range for most of the period but did start to rise towards the end of September as the S&P 500 started to sell off after reaching an all-time high on September 19, the same day that Chinese e-commerce company Alibaba became the biggest initial public offering ever. Due to the low level of volatility, the fund was less active with its covered call writing during the period and ended with 3.8% of the portfolio subject to covered calls.

The fund maintained a high investment position during the majority of the period but ended the quarter with a cash position of 3.6% vs. 6.5% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 82% invested in utility stocks and 18% invested in telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time.

As of June 30, 2014, the Net Asset Value (“NAV”) of UTE.UN was at $12.73 versus $12.46 on March 31, 2014. Unitholders received distributions totaling $0.22021 during the quarter.

The unit’s closing price on June 30, 2014 was $12.30 which represents a discount of 3.4% to its underlying NAV.

After posting mixed returns during the first quarter of 2014, global equity markets resumed their uptrend in the second quarter, as economic data out of the United States started to rebound from the weakness driven by harsh weather experienced this past winter.

The total return for the S&P/TSX Capped Utilities Index for the quarter was 1.3% while the S&P/TSX Capped Telecom Services Sector Index had a total return of 0.7%. This compares to the broader S&P/TSX Composite Index total return of 6.4% during the period led by the Energy and Industrial sectors.

Stock within the Portfolio had varying total returns during the period with Gibson Energy leading the way up 18.7%, on the back of stronger propane and NGL marketing profit reported for the first quarter. Meanwhile, Just Energy Inc. lagged the group, down 30.9% during the quarter on weaker than expected first quarter earnings and concerns that a second dividend cut was coming in as many years.

Volatility levels remained at the low end of the historical range during the period. Due to the low level of volatility, the Fund was less active with its covered call writing during the period and ended with 3.5% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the majority of the period but ended the quarter with a cash position of 6.5% in order to finance the annual retraction for June 30, 2014. The allocation between the two sectors at the end of the quarter was approximately 83% invested in utility stocks and 17% invested in telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time.

As of March 31, 2014, the Net Asset Value (“NAV”) of UTE.UN was at $12.46 versus $11.77 on December 31, 2013. Unitholders received distributions totaling $0.20715 during the quarter.

The unit’s closing price on March 31, 2014 was $12.28 which represents a discount of 1.4% to its underlying NAV.

After performing strongly in 2013, global equity markets posted mixed returns for the first quarter of 2014 due to geo-political tension between Ukraine and Russia as well as concerns that U.S. Federal Reserve might start to raise interest rates sooner than expected.

The total return for the S&P/TSX Capped Utilities Index for the quarter was 8.7% while the S&P/TSX Capped Telecom Services Sector Index had a total return of 3.4%. This compares to the broader S&P/TSX Composite Index total return of 6.1% during the period. After significantly underperforming the broader market in 2013, Utilities outperformed in the first quarter of 2014 as 10-year Government of Canada bond yields declined from 2.76% on December 31, 2013 to 2.46% on March 31, 2014.

Stock within the Portfolio had varying total returns during the period with Capital Power Corporation leading the way up 22.3% on the back of stronger merchant power prices caused by the harsh winter ‘Polar Vortex’. Meanwhile, Roger’s Communications Inc. lagged the group, down 3.7% during the quarter on weaker than expected fourth quarter earnings as wireless revenues declined roughly 2% from the previous year.

Volatility levels rose briefly at the end of January to around 21.5 after it was reported that Russian troops were occupying Crimea, an autonomous republic of Ukraine. The CBOE SPX Volatility Index (“VIX”) averaged just under 15 for the first quarter of 2014. Due to the low level of volatility, the Fund was less active with its covered call writing during the period and ended with 2.2% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 1.4% vs. 2.8% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 83% invested in utility stocks and 17% invested in telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time.

As of December 31, 2013, the Net Asset Value (“NAV”) of UTE.UN was at $11.77 versus $11.42 on September 30, 2013. Unitholders received distributions totaling $0.20208 during the quarter.

The unit’s closing price on December 31, 2013 was $11.67 which represents a discount of 0.8% to its underlying NAV.

Global equity markets continued to advance in the fourth quarter of 2013 with many indices finishing the year at new all-time highs reflecting improved global economic data and accommodative central bank monetary policy.

During the period the S&P/TSX Telecom Services Index had a total return of 6.9%, while the S&P/TSX Utilities Index had a total return of 3.1%. Both lagged the broader S&P/TSX Composite Index during the period on concerns of higher interest rates and less demand for the defensive interest rate sensitive sectors such as Telecommunications and Utilities.

Stock within the Portfolio had varying total returns during the period with Veresen Inc. (“VSN”) leading the way up 19.7%, on the back of stronger propane prices and also the benefit of stronger U.S. dollar vs. the Canadian dollar for their U.S. operations. Meanwhile, Manitoba Telecom Services. Inc. lagged the group, down 8.2% during the quarter after the Government of Canada rejected the sale of its Allstream division to Accelero Capital Holdings citing National Security reasons.

Volatility levels rose briefly at the start of the period as the U.S. Government shut down for 16 days in October as brinkmanship ruled the day. The CBOE SPX Volatility Index (“VIX”) rose to over 20 but quickly retraced and ended 2013 at the lower end of the range over the last twenty years. The Fund was not very active with its covered call writing during the period and ended with none of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended 2013 with a cash position of 2.8% vs. 0.7% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 75% invested in utility stocks and 25% invested in telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time.

As of September 30, 2013, the Net Asset Value (NAV) of UTE.UN was at $11.42 versus $11.86 on June 28, 2013. Unitholders received distributions totaling $0.20539 during the quarter.

The unit’s closing price on September 30, 2013 was $11.30 which represents a discount of 1.1% to its NAV.

Global equity markets continued their rally from the first two quarters of 2013 on improved global economic data and also after U.S. Federal Reserve Chairman, Ben Bernanke, surprised the market by delaying the tapering of quantitative easing at its Federal Open Market Committee meeting in September.

During the period, the S&P/TSX Telecom Services Index had a total return of 6.0%, while the S&P/TSX Utilities Index had a total return of negative 3.1%. The telecom stocks bounced back after Verizon Communications Inc. announced that it would not be entering the Canadian wireless market by purchasing WIND Mobile or Mobilicity, while the Utility stocks were under pressure on concerns that long-term interest rates would continue to rise.

Stock within the portfolio had varying total returns during the period with Inter Pipeline Ltd. leading the way up 17.5%, with most of the increase coming after the company announced on September 5th that it was reclassifying from a limited partnership to a corporation, and subsequently announced a 13% dividend increase on September 9th. Meanwhile, Algonquin Power & Utilities lagged the group, down 11.4% during the quarter.

Volatility levels remained low for the period with the CBOE SPX Volatility Index (VIX) still at the lower end of the range over the last twenty years. The Fund was selective with its covered call writing during the period and ended with 3.2% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 0.7 % vs. 2.5% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 70% invested in Utility stocks and 30% invested in Telecom stocks. The Fund also maintained some exposure to U.S. Utility stocks during the period due to more attractive valuations relative to Canadian Utility shares.

The Manager remains cautiously optimistic on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time. Although interest rates are expected to rise over time, the valuation of companies in the portfolio are at fairly attractive levels when measured by price to earnings ratios and current dividend yields and this should continue to act as major share support for the share prices.

As of June 28, 2013, the Net Asset Value (NAV) of UTE.UN was at $11.86 versus $12.91 on March 28, 2013. Unitholders received cash distributions totaling $0.22411 during the quarter.

The unit’s closing price on June 28, 2013 was $11.40 which represents a discount of 3.9% to its underlying NAV.

Global equity markets continued their rally from the first quarter of 2013 advancing in both April and most of May on improved economic data out of the U.S. and other parts of the world. Markets corrected considerably for the rest of the period after the U.S. Federal Reserve Chairman, Ben Bernanke, signaled to the market that the central bank may start to taper their bond purchase program later this year.

Both the Utilities and Telecom Indices in Canada performed negatively during the period, with the S&P/TSX Telecom Index down 10.6%, while the S&P/TSX Utilities Index was down 4.5% during the quarter. Both sectors underperformed the broader S&P/TSX Composite Index which was down 4.1% during the period.

Stock within the portfolio had varying total returns during the period with AltaGas Ltd. (ALA) leading the way up 6.6%, while Rogers Communications Inc. lagged the group down 19.8% on weaker than expected wireless subscriber growth in the first quarter. The Telecommunications sector in general performed poorly during the period as it was reported that the U.S. wireless giant, Verizon Communications Inc., was considering acquiring WIND Mobile and Mobilicity to enter the Canadian wireless market.

Volatility levels remained low for the period with the CBOE SPX Volatility Index (VIX) still at the lower end of the range over the last twenty years. The Fund was selective with its covered call writing during the period and ended with 10.3% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 2.5% vs. 1.0% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 78% invested in utility stocks and 22% invested in telecom stocks. The Fund also maintained some exposure to U.S. utility stocks during the period due to more attractive valuations relative to Canadian utility shares.

The Manager remains cautiously optimistic on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by the long-term fixed price contracts as well as their track record of paying high and growing dividends over time. Although interest rates are expected to rise over time, the valuation of companies in the portfolio are at moderately attractive levels when measured by price to earnings ratios and current dividend yields and this should continue to act as major share support for the share prices.

As of March 31, 2013, the Net Asset Value (“NAV”) of UTE.UN was at $12.91 versus $12.15 on December 31, 2012. Unitholders received distributions totaling $0.21811 during the quarter.

The unit’s closing price on March 31, 2013 was $12.50 which represents a discount of 3.18% to its underlying NAV.

Global equity markets moved higher in the first quarter of 2013 as market concerns surrounding the “Fiscal Cliff” in the U.S. dissipated after a last minute deal was reached at the end of 2012 that increased taxation but pushed out mandatory spending cuts to March 1, 2013. At the same time, sovereign default risk in Europe reared its head once again as Cyprus became the latest country requiring a bailout of its banking system.

The Canadian Telecom Index performed strongly on both an absolute and relative basis in the first quarter of 2013, while the Canadian Utilities Index was flat during the period and underperformed the broader market. The total returns of the S&P/TSX Telecom Services Index and the S&P/TSX Utilities Index were 11.7% and 0.5% respectively, while the S&P/TSX Composite Index was up 3.3% during this period.

Stocks within the investment universe had varying total returns during the first quarter with Cogeco Cable Inc. and Keyera Corp. (which the Fund owns) leading the way up 20.6% and 17.1% respectively. Meanwhile, Atlantic Power and Just Energy, neither of which the Fund owned due to concerns of their high payout ratios, lagged the group for the second consecutive quarter down 54.8% and 27.1% respectively.

Volatility levels remained low for the period with the CBOE SPX Volatility Index (“VIX”) back to levels not seen since 2007. Due to the low volatility levels and positive view of the stocks within the portfolio, the Fund was not active in its covered call writing program and ended the period with none of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended the period with a cash position of 1.0%, which was unchanged from the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 70% invested in utilities stocks with the remaining 30% invested in telecom stocks. The Fund also increased its U.S. basket holdings during the period by buying U.S. Utilities and Telecom stocks due to more attractive valuations relative to its Canadian peers. The Fund ended the first quarter with a U.S. basket weight of 15%.

The Manager remains positive on both the Utilities and Telecom Services sectors due to their ability to generate strong free cash flows as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 1.87%.

As of December 31, 2012, the Net Asset Value (“NAV”) of UTE.UN was at $12.15 versus $12.04 on September 30, 2012. Unitholders received distributions totaling $0.21006 during the quarter.

The unit’s closing price on December 31, 2012 was $11.75 which represents a discount of 3.29% to its underlying NAV.

Canadian Utilities and Telecom Indices were up in the fourth quarter of 2012 but the Utilities Index underperformed the broader market while the Telecom Index outperformed. The total returns of the S&P/TSX Utilities Index and the S&P/TSX Telecom Services Index were 1.3% and 4.3% respectively, while the return for S&P/TSX Composite Index was 1.7% during the period.

Stocks within the investment universe had varying total returns during the fourth quarter with Shaw Communications Inc. and Roger Communications Inc. leading the way, up 14.8% and 14.5% respectively. Meanwhile, Atlantic Power Corp. and Just Energy Group Inc. lagged the group, down 21.2% and 8.7% respectively.

Volatility continued to remain low in the fourth quarter other than a brief spike that occurred in November heading into the U.S. presidential election. The Fund had, on average, 4.6% of the portfolio subject to covered calls during the fourth quarter and ended the period with none of the portfolio subject to covered calls, similar to the end of the previous quarter.

The Fund maintained a high investment position during the period and ended 2012 with a cash position of 1.0% vs. 3.4% at the end of the previous quarter. The allocation between the two sectors at the end of the quarter was approximately 69% invested in Utilities stocks with the remaining 31% invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, both the valuation and dividend yield of the companies within the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 1.8%.

As of September 28, 2012, the Net Asset Value (“NAV”) of UTE.UN was at $12.04 versus $11.88 on June 29, 2012. Unitholders received distributions totaling $0.20878 during the quarter.

The unit’s closing price on September 28, 2012 was $11.69 which represents a discount of 2.91% to its underlying NAV.

Canadian Utilities and Telecom Indices were up in the third quarter of 2012 but underperformed the broader market. The S&P/TSX Utilities Index and the S&P/TSX Telecom Services Index total returns during the period were 2.05% and 4.96% respectively, while the S&P/TSX Composite Index was up 7.02%.

Volatility continued to remain low in the third quarter. The Fund ended the third quarter with only one equity security subject to covered calls, representing 3.5% of the portfolio vs. 15.8% at the end of the previous quarter.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 3.4% vs. 4.9% at the end of the previous quarter. The allocation between the 2 sectors at the end of the quarter was approximately 74% invested in Utilities stocks with the remaining 26% invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 1.73%.

As of June 29, 2012, the Net Asset Value (“NAV”) of UTE.UN was at $11.88 versus $12.22 on March 30, 2012. Unitholders received distributions totaling $0.2128 during the quarter.

The unit’s closing price on June 29, 2012 was $11.43 which represents a discount of 3.79% to its underlying NAV.

Canadian Utilities and Telecom Indices were generally flat in the second quarter of 2012 very similar to the performance of the previous quarter. The S&P/TSX Utilities Total Return Index decreased modestly to 3202.18 from 3218.02, while the S&P/TSX Telecom Services Total Return Index increased moderately to 1574.28 from 1530.90.

Volatility continued to remain low in the second quarter. The Fund ended the second quarter with 15.8% of the portfolio subject to covered calls vs. 8.9% at the end of the previous quarter.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 4.9% vs. 0.9% at the end of March 2012. The allocation between the 2 sectors at the end of the quarter was approximately 76% invested in Utilities stocks with the remaining 24% invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecom sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 1.74%.

As of March 30, 2012, the Net Asset Value (“NAV”) of UTE.UN was at $12.22 versus $12.42 on December 31, 2011. Unitholders received distributions totaling $0.2142 during the quarter.

The unit’s closing price on March 30, 2012 was $12.10 which represents a discount of 0.98% to its underlying NAV.

Canadian Utility and Telecom stocks were generally flat in the first quarter of 2012 after posting strong absolute and relative returns in 2011. The S&P/TSX Utilities Total Return Index increased modestly to 3218.02 from 3182.67, while the S&P/TSX Telecom Services Total Return Index declined moderately to 1530.90 from 1545.23.

Stocks within the portfolio had varying total returns during the first quarter with Provident Energy Ltd. leading the way up 23.6% due to Pembina Pipeline Corp. announcing on January 16, 2012 that it was acquiring Provident in an all share deal estimated at $10 billion. At the other end of the spectrum, Keyera Corp. declined 16.8% during the period, weighed down by concerns of its exposure to weak natural gas prices.

During the first quarter, 5 companies within the portfolio announced they were increasing their dividends. Rogers Communications, Inc. (“RCI.b”), Canadian Utilities Ltd, Gibson Energy Inc., Telus Corporation and Shaw Communications, Inc., all raised their dividends with RCI.b increasing the most with an 11.3% annualized dividend increase.

Volatility continued to decline in the first quarter, reaching levels not seen since July 2011, as economic statistics in the U.S. continued to improve and concerns about European sovereign default subsided. The average percent of the portfolio subject to covered calls during the period was 3.0% and the Fund ended the first quarter with 8.9% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 0.9% vs. 3.2% at the end of 2011. The allocation between the 2 sectors at the end of the quarter was unchanged from the previous quarter with approximately 72% invested in Utility stocks with the remaining 28% invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunications sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 2.11%.

As of December 31, 2011, the Net Asset Value (“NAV”) of UTE.UN was at $12.42 versus $11.76 on September 30, 2011. In addition, the Fund paid distributions totaling $0.20691 during the quarter.

The unit’s closing price on December 30, 2011 was $12.00 which represents a discount of 3.38% to its underlying NAV.

Canadian Utility and Telecom stocks generated a mixture of returns in the fourth quarter of 2011. During the period, the S&P/TSX Utilities Total Return Index was relatively flat, rising to 3182.67 from 3155.00, while the S&P/TSX Telecom Services Total Return Index was up significantly to 1545.23 from 1405.89. After significantly outperforming the S&P/TSX Composite Total Return Index for the first 3 quarters of 2011, the S&P/TSX Utilities Index underperformed the broader market which rose 3.58% in the fourth quarter, while the S&P/TSX Telecom Services Index significantly outperformed.

Stocks within the Universe had varying total returns during the fourth quarter with AltaGas Ltd. and Inter Pipeline Fund, both of which the Fund was invested in, leading the way up 18.9% and 18.0% respectively. At the other end of the spectrum, Manitoba Telecom Services Inc., which the Fund was also invested in, was down 7.20% during the period, weighed down by regulatory concerns regarding foreign ownership rules imposed by the CRTC.

Five companies within the portfolio raised their dividends in the fourth quarter. Inter Pipeline Fund (“IPL”), Keyera Corp, Telus Corporation, BCE Inc. and Fortis Inc., all raised their dividends with IPL increasing the most with a 9.3% annualized dividend increase.

Volatility for the fourth quarter declined from the elevated level we saw in the previous quarter as economic statistics in the U.S. started to gradually improved and concerns about European sovereign default slowly subsided. The Fund did little call writing during the quarter and ended the year with approximately 1.0 percent of the portfolio subject to covered calls.

The Fund maintained its invested position during the majority of the period and ended 2011 with a cash position of 3.2% compared to 5.6% at the end of September, 2011. The allocation between the 2 sectors at the end of the quarter was approximately 72% in Utility stocks with the remaining 28% invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 1.9%.

As of September 30, 2011, the Net Asset Value (“NAV”) of UTE.UN was at $11.76 versus $11.59 on June 30, 2011. In addition, Unitholders received distributions totaling $0.20108 during the quarter.

The unit’s closing price on September 30, 2011 was $11.28 which represents a discount of 4.08% to its underlying net asset value.

Although Canadian Utility and Telecom stocks declined considerably with global markets in early August after Standard & Poor’s downgraded the U.S. Government debt rating, most of the stocks within the portfolio rebounded quickly due to their perceived status as safe haven defensive stocks as well as the continued demand for yield in the current low interest rate environment. During the period, the S&P/TSX Utilities Total Return Index increased to 3155.00 from 3046.27, while the S&P/TSX Telecom Services Total Return Index was relatively flat at 1405.89 from 1401.41. Both sectors strongly outperformed the broad S&P/TSX Composite Total Return Index which declined 12.0%. The stocks within the Universe had varying total returns during the third quarter with Brookfield Renewable Power Fund, which the fund was invested in, leading the way up 13.91%. This strong performance was due to the announced merger with Brookfield Renewable Power Inc., the renewable power business of Brookfield Asset Management Inc. which will make the combined company one of the largest renewable power companies in the world. At the other end of the spectrum, Just Energy Group Inc., which the Fund didn’t hold was down 27.78% during the period.

Algonquin Power & Utilities Corp. was the only company within portfolio that raised their dividend in the third quarter with a 7.7% increase announced on August 11, 2011.

Volatility levels picked up in the quarter after being relatively tame during the first half of the year. Volatility levels started to pick up in late July as the deadline for the U.S. Congress vote on the debt ceiling limit on August 2nd was approaching and has remained high since as Standard & Poor’s downgraded the rating of U.S. Government debt and the prospect of Greece defaulting on their debt increased. The Fund was active in its call writing during the quarter and ended September 30, 2011 with approximately 3.16 percent of the portfolio subject to covered calls.

The Fund maintained its invested position during the majority of the period and ended with a cash position of 5.6% compared to 3.0% at the end of June, 2011. The allocation between the 2 sectors at the end of the quarter was approximately 2/3rds in Utility stocks with the remaining 1/3rd invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends. In the context of the current low interest rate environment, the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 2.15%.

As of June 30, 2011, the Net Asset Value (“NAV”) of UTE.UN was at $11.59 versus $11.39 on March 31, 2011. In addition, Unitholders received distributions totaling $0.2009 during the quarter.

The unit’s closing price on June 30, 2011 was $11.09 which represents a discount of -4.31% to its underlying net asset value.

During the period, the S&P/TSX Utilities Total Return Index increased modestly to 3046.27 from 3026.02, while the S&P/TSX Telecom Services Total Return Index increased considerably to 1401.41 from 1287.49. The stocks within the Portfolio had varying total returns during the second quarter with Pembina Pipeline Corporation and Keyera Corp. leading the way up 12.5% and 12.4%, respectively, during the period. At the other end of the spectrum, holdings in Inter Pipeline Fund L.P. and Provident Energy Ltd. lagged the group with negative total returns of 5.71% and 3.0% respectively.

Consistent with one of the themes prevailing when we marketed the fund in late 2010, stocks within the Canadian Utilities & Telecom Income Fund universe continued to grow their dividends in the second quarter of 2011. Notable examples with dividend increases were; BCE Inc. which announced a 5.07% increase to its dividend on May 12, 2011 and Telus Corporation which announced a 4.76% increase in its dividend on May 5, 2011.

Due to the low level of volatility in the Canadian Utilities and Telecom companies for the majority of the period, the covered-call writing activity was limited to select holdings only as the lower volatility did not compensate the Fund enough to justify this activity. The Fund ended June 30, 2011 with none of the portfolio subject to covered calls. The Fund maintained its invested position during the majority of the period and ended with a cash position of 3.0 percent compared to 2.1 percent at the end of March 31, 2011. The allocation between the 2 sectors at the end of the quarter was approximately 2/3rds in Utility stocks with the remaining 1/3rd invested in Telecom stocks.

The Manager remains positive on both the Utilities and Telecommunication Services sectors due to their ability to generate strong free cash flows supported by long-term fixed price contracts they have with their customers as well as their track record of paying high and growing dividends over time. In the context of the current low interest rate environment , the valuation and dividend yield of companies in the portfolio remain at attractive levels relative to 10-year Government of Canada bond yields which ended the quarter at 3.11%.

Redemption Deadlines
Units may be surrendered at any time for redemption, but will be redeemed only on a Redemption Date, being the last business day of any month. Units surrendered for redemption by a Unitholder at least twenty business days prior to the last day in June 2012 or any year thereafter (the “Annual Redemption Date”) will be redeemed on such Annual Redemption Date. Units surrendered for redemption by a Unitholder at least ten business days prior to the last day of any other month (a “Monthly Redemption Date”), will be redeemed on such Monthly Redemption Date. Unitholders will receive payment for the Units on or before the 15th day following any such Redemption Date. If a Unitholder surrenders Units after 5:00 p.m. (EST) on the applicable cut-off date, the Units will be redeemed on the following Redemption Date. Redemption notices must be delivered to the Fund by an investor’s advisory form in sufficient time to meet the deadline.

Annual Redemption
Beginning in June 2012, units surrendered for redemption at least 20 business days prior to the last day of June will be redeemed at 100% of net asset value less costs, valued on the last business day of June being the redemption day. Costs may include an amount equal to the aggregate of all brokerage fees, commissions and other costs incurred by the Fund in connection with such payment, including, but not limited to, costs incurred in liquidating securities held in the Fund’s portfolio. Payment will be received on or before the 15th day following the redemption day.

Monthly Redemption
For Unitholders whose Units are redeemed on any other Redemption Date, the redemption price per Unit will be equal to the lesser of:

1. 95% of the Market Price. For such purposes, “Market Price” means the weighted average trading price of the Units on the principal stock exchange on which the Units are listed for the ten trading days immediately preceding the applicable Redemption Date, and
2. 100% of the Closing Market Price of the Units on the applicable Redemption Date, minus an amount equal to the aggregate of all brokerage fees, commissions and other costs incurred by the Fund in connection with such payment, including, but not limited to, costs incurred in liquidating securities held in the Fund’s portfolio. For such purposes, the “Closing Market Price” means the closing price of the Units on the principal stock exchange on which the Units are listed or, if there was no trade on the relevant date, the average of the last bid and the last asking prices of the Units on the principal stock exchange on which the Units are listed.

Any unpaid distribution payable on or before the applicable Redemption Date in respect of Units tendered for redemption on such Redemption Date will also be paid on the applicable Redemption Payment Date.