Core Canadian Dividend Trust

Net Asset Value at quarter end March 31, 2021 was $4.92 versus $4.62 on December 31, 2020. Unitholders received distributions totaling $0.08 during the quarter.

The first quarter of 2021 was marked by continued strength in global 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.

Financial stocks were not the strongest overall this quarter but still delivered solid returns. Most of the core financial holdings had double-digit total returns in the first quarter. The best performer was AGF Management Ltd which had a total return of 24.8% per cent this period.

Our weakest name in the core portfolio was BCE Inc which still had a positive total return of 5.8% per cent. The weakest name including the basket holdings was Shopify Inc. which was down 11.1% per cent on a total return basis.

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. On average, 8.5% of the portfolio was written during the period versus 11.6% on average during the previous quarter.

The fund had a total return of 8.35% compared to 8.80% for the TSX 60 Index. The price of the units listed on the TSX on March 31, 2021 was $4.84 up 0.24 from the December 31, 2020 trading price of $4.60 and represents a discount to NAV of $0.08 per unit.

Net Asset Value at quarter end December 31, 2020 was $4.62 versus $4.43 on September 30, 2020. Unitholders received distributions totaling $0.07 during the quarter.

Results were mixed in the fourth quarter for North American equities. Renewed COVID concerns globally and the uncertainty of the U.S. election caused weakness in October when indices returned to levels not seen since the second quarter. Optimism returned in November, however, when very promising vaccine news was released as well as the election results. Stocks generally trended higher for the rest of the quarter.

Gold continued to trend lower for much of this quarter after making new highs in the previous quarter and this commodity weakness flowed through to the materials stocks. Barrick Gold Corp (ABX) was our worst performer this quarter with a total return of negative 20.6 percent.

Financials, which are well represented in the fund, continued to rebound in the fourth quarter. Two of our best performers this period were Bank of Nova Scotia (BNS) and Bank of Montreal (BMO) which had total returns of 26.3 and 26.0 percent respectively. However, our top name was in the Industrials group, Russel Metals Inc (RUS) was up 27.4 percent on a total return basis.

Volatility continued to remain subdued for the fourth quarter with the exception of late October when the market dipped on renewed virus concerns, but quickly continued to move lower towards pre-pandemic levels. The average level of overwriting was down this quarter at 11.6 percent compared to 23.2 percent in the third quarter.

The fund had a total return of 5.89% compared to 7.86% for the TSX 60 Index. The price of the units listed on the TSX on December 31, 2020 was $4.60 down 0.26 from the September 30, 2020 trading price of $4.86 and represents a discount to NAV of $0.02 per unit.

Net Asset Value at quarter end September 30, 2020 was $4.43 versus $4.28 on June 30, 2020. Unitholders received distributions totaling $0.07 during the quarter.

Major equity indices in Canada and the USA continued to trend higher during the third quarter of 2020, at least until the end of August. In September, many of the Technology names that had led the recovery rally since the beginning of Q2 paused or corrected somewhat. Energy and Utility names were the only other industry groups represented in our fund with negative total returns in this quarter.

Gold had also been on a recovery uptrend since last March and rallied hard until early August before consolidating. The gold surge pulled several miners including those held in the fund. Our top performer this quarter was Teck Resources (TECK) whose total return to the fund this quarter was 30.7 percent. Other miners also delivered double-digit returns.

Our weakest name this quarter was Canadian Utilities (CU) with a total return to the fund of negative 4.8 percent. Much of the energy complex has been flat to down for the past few months. Our two energy names TC Energy (TRP) and Enbridge (ENB) delivered small negatives returns to the fund this quarter.

Volatility had been drifting lower since the end of Q2 and continued to do so for much of this quarter until the Tech sell-off in August. The selective overwriting program continued this quarter with a slight increase in activity. The average overwritten level for this period was 23.2 percent compared to 20.4 last quarter.

The fund had a total return of 5.09% compared to 4.41% for the TSX 60 Index. The mid price of the units listed on the TSX on September 30, 2020 was $4.86 up 0.44 from the June 30, 2020 trading price of $4.42 and represents a premium to NAV of $0.43 per unit.

Net Asset Value at quarter end June 30, 2020 was $4.28 versus $4.20 on March 31, 2020. Unitholders received distributions totaling $0.07 during the quarter.

After a difficult first quarter, AGF Management Limited (AGF.b) was able to recoup a significant portion of their previously lost market capitalization in this second quarter. It was our best performer during the period with a total return of 71.2%. All sectors were up this quarter, however, financials overall were not among the best performers. Energy and Materials stocks were the top performing groups driven by a rebound in the energy complex and a surge in gold prices.

While all sectors were up in the second quarter, Utilities and Health Care names were generally the weakest. The weakest core holding in the second quarter was TC Energy Corp (TRP) with a total return of negative 9.5% while held in the fund. The price weakness was in spite of an earnings beat and may be due, in part, to the temporary closure of a Michigan facility due to an emergency. The weakest non-core performer in the Fund this period was Dollarama Inc. (DOL) which was added to the non-core basket part way through the quarter to benefit from a rebound in consumer spending after the pandemic pause. The return while held in the fund was negative 5.9%.

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 20.4% compared to 23.3% in the first quarter.

The fund had a total return of 3.77% compared to 11.27% for the equal weighted universe. The price of the units listed on the TSX on June 30, 2020 was $4.42 up 0.68 from the March 31, 2020 trading price of $3.74 and represents a premium to NAV of $0.04 per unit.

Net Asset Value at quarter end March 31, 2020 was $4.20 versus $5.60 on December 31, 2019. Unitholders received distributions totaling $0.09 during the quarter.

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 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 only stock in the core fund to deliver a positive return this quarter was Thomson Reuters Corp (TRI). The share price did suffer weakness in March along with the rest of the market but rallied at the end of the month when the company was upgraded at major research firms. The total return for the quarter was 3.8%.

AGF Management Limited (AGF.b) was our worst performer this quarter. The company announced some proposed fund mergers and portfolio manager changes. That, along with a modest drop in overall AUM and the general market disruption caused by COVID-19, resulted in the stock price dropping over 53% with net total return at negative 52.2% for the quarter.

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 S&P TSX Volatility Index (“VIXC”) is no longer published.

In order to capture some of the historically high volatility premiums, the fund has overwritten a maximum level of over 50% of the fund during the quarter. The average level for the period was 23.3%.

The fund had a total return of negative 23.4% compared to negative 18.5% for the S&P/TSX 60 Index. The price on March 31, 2020 was $3.74 down $1.90 from the December 31, 2019 trading price of $5.64 and represents a discount to NAV of $0.46 per unit.

Net Asset Value at quarter end December 31, 2019 was $5.60 versus $5.64 on September 30, 2019. Unitholders received distributions totaling $0.09 during the quarter.

After a little pullback in September, equity markets moved steadily higher in the fourth quarter of 2019 making new highs in December. Returns were mixed across sectors, however, with Information Technology leading the way higher and Health Care and Consumer names showing weakness.

National Bank (NA) was our best performer this quarter. The company beat consensus estimates with strong year over year earnings. The share price was the best performer of the big six banks this quarter delivering a 10.4% percent total return for the period.

Our weakest performer was Restaurant Brands International (QSR), a non-core holding, which had been performing quite well in 2019 until the most recent quarter. It was down 11.4% percent on a total return basis for the quarter but the fund exited the position during the quarter which reduced the negative impact to 6.1%.

Volatility as measured by the S&P TSX Volatility Index (“VIXC”) drifted lower into the single digits for the first half of the quarter. Persistent China-US trade concerns, among other geopolitical worries, drove volatility higher in both US and Canadian markets in November and December.

The fund maintained overwriting levels close to the previous quarter averaging 20.3% in the fourth quarter.

The fund delivered a positive total return of 0.95% compared to 2.45% for the S&P/TSX 60 Index. The mid price on December 31, 2019 was $5.64 up $0.14 from the September 30, 2019 trading price of $5.50 and represents a premium to NAV of $0.04 per unit.

Net Asset Value at quarter end September 30, 2019 was $5.64 versus $5.65 on June 28, 2019. Unitholders received distributions totaling $0.09 during the quarter.

The rally of the first half of 2019 generally faded in the third quarter. However, a strong September allowed for a 2.5% total return in the S&P/TSX Index. Most sectors enjoyed single-digit gains while Health Care continued to be a drag the index as cannabis stocks continued their downtrend.

Utilities were up 10.1% while Health Care was down 30.0% this quarter.

Our best performer this quarter was AGF Management Ltd. (AGF.b) with a total return of 21.0%. This company delivered better than expected earnings this quarter after a dismal 2018 and quiet first half of 2019.

Our worst performer was Teck Resources Ltd. (TECK.b) at negative 28.8% total return. Teck reduced its production guidance for 2019 as well as capex plans which caused some analysts to reduce price targets; all of which weighed on the share price.

Volatility as measured by the S&P TSX Volatility Index (“VIXC”) remained low through July but started to move into the mid-teens in August and September as various geopolitical concerns, like China trade and Brexit, roiled the markets.

The manager continued to be opportunistic in overwriting and maintained overwritten levels at approximately 21% of fund.

The fund delivered a positive total return of 1.37% compared to 2.69% for the S&P/TSX 60 Index. The trading price on September 30, 2019 was $5.50 up $0.10 from the September 28, 2019 trading price of $5.40 and represents a discount to NAV of $0.14 per unit.

The Net Asset Value “(NAV)” at quarter end June 28, 2019 was $5.65 versus $5.71 on March 31, 2019. Unitholders received distributions totaling $0.09 during the quarter.

The 2019 rally continued in the second quarter, except for the month of May which saw a dramatic mid-quarter correction. The trend resumed in June and finished up on the quarter. The S&P/TS Index rose 1.7%. Seven of ten sectors were positive for the quarter with Information Technology leading the way.

Cannabis stocks continued to make headlines, however, this quarter they produced negative returns for the sector. Health Care was down 9.3%. Most other sectors sustained only small gains or losses.

Our best performer for the second quarter in a row was TC Energy Corp (TRP), parent of Transcanada Corp with a total return of 28.6% in Q2. Our worst name was Russell Metals Inc. (RUS) at negative 4.5% total return.

Volatility as measured by the S&P TSX Volatility Index (“VIXC”) remained low for most of the period other than the brief spike in early May as equity markets corrected on trade war concerns that spilled over to Canada and their potential effect on the economy.

The manager increased average overwriting levels somewhat to 21.4% in the second quarter to take advantage of the elevated volatility levels.

The Fund delivered a positive total return of 0.65% compared to 2.98% for the S&P/TSX 60 Index. The trading price on June 28, 2019 was $5.40 up $0.02 from the March 29, 2019 trading price of $5.38 and represents a discount to NAV of $0.25 per unit.

Net Asset Value “NAV” at quarter end March 29, 2019 was $5.71 versus $5.31 on December 31, 2018. Unitholders received distributions totaling $0.09 during the quarter.

After one of the worst Decembers in many years, the market turned on Christmas Eve and has moved steadily higher since then coming close to testing the 2018 highs.

All sectors reversed and moved higher in the first quarter of 2019. The Health Care sector was significantly higher as Cannabis stocks continued to make headlines. Technology stocks also fared well in this period.

Sectors represented in our core portfolio had more muted but still positive performance this quarter. Total returns for the Energy and Utility sectors were 15.6 percent and 17.1 percent respectively.

Our best performer was TransCanada Corp (TRP) with a total return of 24.6 percent. The financial names delivered mostly single-digit gains including our weakest performer, CIBC (CM) at 5.2 percent.

Volatility as measured by the S&P TSX VIX index finished the year in the high 20s, which is unusually high for this measure. Implied volatility moved steadily lower throughout this quarter to finish just over 13 percent, below its longer term average of 17 percent.

The Fund delivered a positive total return of 9.27% compared to 12.54% for the S&P/TSX 60 Index. The trading price on March 29, 2019 was $5.38 up $0.45 from the December 31, 2018 trading price of $4.93 and represents a discount to NAV of $0.33 per unit.

Net Asset Value “NAV” at quarter end September 28, 2018 was $5.31 versus $5.81 on September 28, 2018. Unitholders received distributions totaling $0.092 during the quarter.

Stocks in Canada were trendless in the third quarter after peaking at the end of June. However, the fourth quarter was decidedly negative. The broad index sold off in September and continued dramatically lower in one of the worst Decembers in years. The S&P TSX 60 price returned to June 2016 levels.

Most sectors ended the quarter lower with the worst being Health Care which is not represented in our core holdings. Energy, Industrials and Financials also delivered negative double-digit performance which weighed heavily on our fund.

Our worst performer was AGF Management (AGF.b) which trended lower for much of 2018 in the face of streamlined product offerings and management fee reductions. The stock was down 20 percent in this quarter.

Our best performer for the second straight quarter was Thomson Reuters (TRI) which was up 12.5 percent. The company has been successful across several media platforms in the past year. The stock suffered a minor setback in December when management announced a significant restructuring.

Volatility as measured by the S&P TSX VIX index which had been in the range of 10% to 15% for the last three quarters broker out of this range and topped 27% near the end of December as the market sold off.

This quarter the fund delivered a total return of negative 7.21% compared to negative 8.93% for the S&P/TSX 60 Index. The trading price on December 31, 2018 was $4.93 down $1.05 from the September 28, 2018 trading price of $5.98 and represents a discount to NAV of $0.38 per unit.

Net Asset Value “NAV” at quarter end September 28, 2018 was $5.81 versus $6.07 on June 29, 2018. Unitholders received distributions totaling $0.099 during the quarter.

The Canadian stock market made its 2018 and all-time highs in early July and have been moving sideways to lower since then. The performance this quarter, ending September was mixed with mostly single-digit positive and negative returns across sectors. The exceptions were Materials and Health Care.

The Materials sector was weaker on gold names. Bullion peaked in April and has been moving lower since then which is weighing on the miners. Health Care on the other hand has been dominated by stocks connected with the burgeoning cannabis industry.

AGF Management Inc (AGF.b) was our worst performer this quarter and continues its price weakness since the beginning of 2018. This is despite a reasonable year over year increase in assets under administration. Senior management changes may be a factor as the long-time CEO is stepping down. The total return was negative 11.06 percent.

Our top performer was Thomson Reuters (TRI) which has enjoyed a price uptrend since May and closed the quarter at new 2018 highs. The performance is partly due to the vote of confidence in the company shown by Blackstone Group LP who becomes a significant partner after a U$20 billion acquisition of the TRI risk unit. Cash-rich TRI has been distributing some of the funds to shareholders with a plan to do more. Total return for third quarter was 11.8 percent.

Volatility as measured by the S&P TSX VIX index moved in a range between 10% and 15% for most of this quarter, quite similar to the previous quarter, and near the long-tern average of just over 13 percent.

This quarter the fund delivered a total return of negative 2.64% compared to negative 0.65% for the S&P/TSX 60 Index. The trading price on September 28, 2018 was $5.98 down $0.07 from the June 29, 2018 trading price of $6.05 and represents a premium to NAV of $0.17 per unit.

Net Asset Value (“NAV”) at quarter end June 29, 2018 was $6.07 versus $6.13 on March 29, 2018. Unitholders received distributions totaling $0.099 during the quarter.

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.

Energy was the standout sector in the second quarter with a total return of 15.7 percent. Our core energy name is Enbridge Inc (ENB) which also had great quarter delivering 17.8 percent on a total return basis and was our best performer.

After testing and breaching the 2017 highs in early 2018, Gold has moved decidedly lower in the second quarter of the year. The high in early 2018 was over U$1360/oz but closed the quarter at U$1253/oz.

Scotiabank (BNS) was our worst performer this quarter with a total return of negative 4.1 percent. BNS has been on an acquisition spree in the past several months and investors are still digesting the earnings prospects, which has weighed on the share price.

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.

This quarter the fund delivered a total return of 0.65% compared to 3.3% for the Equal-weighted 15 Stock Universe. The trading price on June 26, 2018 was $6.05 down $0.51 from the March 29, 2018 trading price of $6.16 and represents a discount to NAV of $0.02 per unit.

Net Asset Value (“NAV”) at quarter end March 29, 2018 was $6.13 versus $6.75 on December 30, 2017. Unitholders received distributions totaling $0.11 during the quarter.

After finishing 2017 on a high note, the first quarter of 2018 experienced some of the most dramatic down days seen in years with a peak to trough move of close to 10%. The S&P TSX Index had a total return of negative 4.5% by quarter end.

Tech was the only bright spot in the index while all other sectors delivered negative returns this quarter with Healthcare and Energy names faring the worst.

Gold has breached the 2017 highs several times in the first quarter of 2018 but has traded in a somewhat narrow range and failed to break out.

AGF Management Ltd (AGF.b) was the overall star performer for 2017 but the first few months of 2018 has not been pretty. It was the worst performing name within the portfolio this quarter with a total return of negative 19.0%.

Even with Copper prices range-bound so far this year Teck Resources (TECK.b) managed to take top spot in our core portfolio with a total return of 1.1%.

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.

This quarter the fund delivered a total return of negative 7.6% compared to negative 4.6% for the TSX 60 Index and negative 6.1% for the Equal Weighted Universe. The trading price on March 31, 2018 was $6.16 down $0.51 from the December 31, 2017 trading price of $6.67 and represents a premium to NAV of $0.03 per unit.

Net Asset Value at quarter end December 29, 2017 was $6.75 versus $6.66 on September 29, 2017. Unitholders received distributions totaling $0.11 during the quarter.

Canadian Stocks had a decent quarter ending December 2017 with most sectors posting single digit gains except for Energy which was down slightly. The S&P TSX index was up 4.4 percent on a total return basis in Q4.

The weakness in energy stocks occurred despite a strong crude price which trended higher during the quarter to touch U$60 per barrel for the first time since the middle of 2015.

The TSX Health Care stocks were flying high on medical marijuana names which are not part of our core portfolio. Banks and other financials also did well this quarter which are well represented in the fund. Canadian Imperial Bank of Commerce (CM) delivered a total return of 13.4 per cent as our second-best performer.

Teck Resources (TECK.b) has been our star performer off and on for the past few years. It was number one again this quarter with 27.0 per cent total return.

Volatility as measured by the S&P TSX VIX index traded in the 11% range for much of the quarter but also had some especially quiet periods where levels went below 5%. The fund averaged 3.9% overwritten in the quarter, a bit higher than last quarter at 2.2%.

The trading price on December 29, 2017 was $6.67 up $0.12 from the September 29, 2017 trading price of $6.55. The December 29 trading price of $6.67 represents a discount to NAV of $0.08 per unit or 1.2 percent of the $6.75 NAV.

Net Asset Value (NAV) at quarter end September 30, 2017 was $6.66 versus $6.61 on June 30, 2017. Unitholders received distributions totaling $0.11 during the quarter.

Canadian Stocks continued to trend lower this quarter on most sectors until September when the TSX quickly reversed and approached its year highs. The S&P TSX index was up 3.7 percent on a total return basis in Q3.

The energy sector contributed to the early weakness this quarter with crude prices making new 2017 lows in June. However, the energy complex rebounded later in the quarter and oil traded over U$50 per barrel again.

The energy sector was the best performing sector this quarter with a total return of 6.6%. Materials were also positive but more muted despite Gold reaching a high for the year at over U$1350 per ounce in early September.

Teck Resources (TECK.b) still managed to be our second best performing equity with a total return of 17.1%. Our best performer was AGF Management Ltd (AGF.b) at 21.4% total return.

Volatility as measured by the S&P TSX VIX index remained in the 13% range for much of the quarter except for a flurry of activity in early September. The Fund averaged 2.2% overwritten in the quarter, lower than the previous quarter at 5.6%.

This quarter the Fund delivered a total return of 2.4 percent compared to 3.9 percent for the TSX 60 Index. The trading price on September 29, 2017 was $6.55 up $0.05 from the June 30, 2017 trading price of $6.50. The September 29 trading price of $6.55 represents a discount to NAV of $0.11 per unit or 1.7 percent of the $6.66 NAV.

Net Asset Value (NAV) at quarter end June 30, 2017 was $6.61 versus $6.84 on March 31, 2017. Unitholders received distributions totaling $0.11 during the quarter.

The TSX diverged from US stocks in the second quarter and trended lower after peaking in February. The S&P TSX index was down 1.6 percent on a total return basis in Q2.

Apart from the Healthcare sector that benefitted from a substantial rebound in Valeant Pharmaceuticals International Inc. (“VRX”), most sectors delivered modest single-digit returns in this quarter.

The overall index which is heavily resource-weighted was pulled lower by weakness in Materials and Energy. The Energy sector was down 8.2 percent as Oil prices continued to trend lower and Materials were down 6.4 percent.

Gold traded in a wide range plus or minus about U$90 in the second quarter. When it appeared to be rolling over gold stocks began moving sharply lower. Teck Resources Ltd. (“TECK.B”) was down 22.5 percent this quarter, our worst performer.

AGF Management Ltd. (“AGF.B”) was our best performer this period after reporting quarterly results that topped even the most optimistic analysts. The total return on the name was 10.7 percent in Q2.

Volatility as measured by the S&P TSX VIX index continued the sideways action shown in the previous quarter inching somewhat higher overall. The long run average level was just under 13 percent. The fund averaged 5.6% overwritten in the quarter, slightly higher than last quarter.

This quarter the fund delivered a total return of negative 1.7 percent compared to negative 0.7 percent for the TSX 60 Index. The trading price on March 31, 2017 was $6.50 down $0.17 from the March 31, 2017 trading price of $6.67. The June 30 trading price of $6.50 represents a discount to NAV of $0.11 per unit or 1.7 percent of the $6.61 NAV.

Net Asset Value (“NAV”) at quarter end March 31, 2017 was $6.84 versus $6.89 on December 31, 2016. Unitholders received distributions totaling $0.11293 during the quarter.

The fourth quarter rally continued into this quarter until mid-February before retracing somewhat. The S&P/TSX Composite Index was up 2.4% on a total return basis in Q1.

The Financials sector which was by far the best performing sector in the fourth quarter of 2016 on expectations of higher net interest margins and less regulation gave way to the Information Technology and Consumer Discretionary sectors in the first quarter of 2017. Meanwhile, the Energy sector which was one of the best performing sectors in 2016 has been one of the worst performing sectors so far in 2017.

Gold started the year strong and finished the quarter up over 8% despite a big pullback in early March. The strong commodity also helped Teck Resources Ltd. deliver a total return over 8% this quarter, which was our best performing holding.

Our weakest position was Thomson Reuters coming in at minus 1.3% after a reasonably good previous quarter.

Volatility as measured by the S&P/TSX VIX Index was trendless during this quarter around the 12% level but with greater day to day swings than we observed over the past year. The Fund averaged 5.3% overwritten in the quarter, slightly lower than last quarter.

This quarter the Fund delivered a total return of 0.8% compared to 2.4% for the S&P/TSX 60 Index. The trading price on March 31, 2017 was $6.67 up $0.12 from the December 30, 2016 trading price of $6.55. The March 31st trading price of $6.67 represents a discount to NAV of $0.17 per unit or 2.5% of the $6.84 NAV.

Net Asset Value at quarter end December 30, 2016 was $6.89 versus $6.52 on September 30, 2016. Unitholders received distributions totaling $0.10899 during the quarter.

The fourth quarter got off to a slow start but did continue its year-long uptrend to finish the quarter and the year at its highs. However, this uptrend did not span all sectors. The small Health Care component of the market was decimated by Valeant Pharmaceuticals International (VRX) which, fortunately, is not part of our core portfolio. The other dramatic downturn among the Canadian sectors was Materials, drawn lower by a significant pullback in the price of gold. The up move stalled during the summer and the correction that followed later in the year coincided with the U.S. election. Bullion was up almost 30 per cent at its peak in the summer but settled up only 8.5 per cent by year-end following the post-U.S. election selloff.

Financials led the TSX higher in this quarter and that was reflected in our top two performers, Manulife Financial Corp. (MFC) and AGF Management Ltd (AGF.b) which saw total returns of 30.2 per cent and 26.2 per cent respectively. Despite a relatively benign interest rate environment throughout the year, and this quarter in particular, rate sensitive stocks were the most impacted, Financials to the upside and Utilities to the downside. BCE Inc. (BCE) was our worst performer delivering a total return of negative 3.1 per cent in Q4.

Implied volatility had moved lower earlier in the year and remained essentially flat for most of this quarter until mid-December when uncertainty, as measured by the S&P/TSX 60 VIX, all but disappeared. Intra-day levels went below 5 per cent for the first time since the inception of the index. The average level of overwriting for this quarter was 6.9 per cent compared to 3.1 per cent in Q3 of 2016.

The Fund delivered a total return of 7.4 per cent compared to 11.9 per cent for the equally weighted universe.

The trading price on December 30, 2016 was $6.55 up $0.41 from the September 30, 2016 trading price of $6.14. The December 30 trading price of $6.55 represents a discount to NAV of $0.34 per unit or 4.93 per cent of the $6.89 NAV.

Net Asset Value (“NAV”) at quarter end September 30, 2016 was $6.52 versus $6.28 on June 30, 2016. Unitholders received distributions totaling $0.10449 during the quarter.

Stock markets reached their year-to-date highs in mid-summer during this quarter. For the S&P 500, this meant new all-time highs, while the TSX is still below its highs set in 2014. Mid-summer highs also applied to gold which has been a key driver for Materials stocks in the TSX index. However, gold has been drifting lower since July. Oil, on the other hand, had an early summer sell-off touching $40 per barrel by early August; it has been drifting higher since that time.

Teck Resources (TCK.b) continues to be the star performer in the portfolio and, indeed, the TSX index. The stock saw a total return of 39% this quarter and was one of only two double-digit performers in the portfolio. Bank of Nova Scotia (BNS) was the other name with a total return of 10.9% per cent. After being a solid contributor for the first half of the year, Russel Metals (RUS) rolled over this quarter delivering a total return of negative 6.7% per cent.

Implied volatility continued to move lower in Q3 with the S&P/TSX 60 VIX trading below 9% per cent in July. The lower volatility levels made attractive overwriting opportunities more difficult to find. The average level of overwriting for this quarter was 3.1 per cent compared to 6.9 per cent in Q2 of 2016.

The trading price on September 30, 2016 was $6.14 up $0.35 from the June 30, 2016 trading price of $5.79. The September 30 trading price of $6.14 represents a discount to NAV of $0.38 per unit or 5.8% of the $6.52 NAV.

Net Asset Value at quarter end June 30, 2016 was $6.28 versus $5.96 on March 31, 2016. Unitholders received distributions totaling $0.10026 during the quarter.

Global equity markets were mixed in the second quarter of 2016 with markets in North America showing positive results while International markets were modestly lower. The S&P/TSX Index rose 5.1% and the S&P 500 Index in the U.S. was up 2.4% while the international index (EAFE) was down 1.2% with most of the decline occurring after the “Brexit” vote was decided on June 23 with 52 percent of Great Britain voting in favor to leave the European Union. The news roiled global markets immediately following the vote but rebounded by quarter-end. The longer term impacts on the region and the world are not yet known.

Gold stocks continue to rally on the strength in bullion. Our holding of Teck Resources (TCK.b) enjoyed a total return of 73.2% in Q2 and was our best performing position for the second quarter in a row.

Russel Metals (RUS) and TransCanada Corp (TRP) delivered solid returns of 17.6% and 15.6% respectively. Our other core holdings delivered a mix of positive and negative returns in the single digits.

Implied volatility levels drifted lower for most of this quarter coming close to the 2015 lows. The level of overwriting was reduced somewhat with stock prices well bid and volatility reduced. The average for this quarter was 6.9% compared to 14.3% in Q1 of 2016.

The Fund delivered a total return of 7.0% compared to 9.3% for the equally weighted universe.

The trading price on June 30, 2016 was $5.79 up $0.23 from the March 31, 2016 trading price of $5.56. The June 30 trading price of $5.79 represents a discount to NAV of $0.49 per unit or 7.8% of the $6.28 NAV.

Net Asset Value at quarter end March 31, 2016 was $5.96 versus $5.71 on December 31, 2015. Unitholders received distributions totaling $0.09166 during the quarter.

Global equity market performance was “A Tale of Two Cities” in the first quarter of 2016. From the start of the year up to the lows on February 11, 2016, most global indices were down over 10% due to concerns surrounding global growth. The WTI Crude Oil spot price declined over 30% during the same period. Since then, many markets have advanced over 10% erasing most if not all of the losses incurred earlier in the year as global macroeconomic indicators started to show some signs of improvement. By the end of the quarter, the S&P/TSX Composite advanced 4.5%, the S&P 500 Index advanced 1.3%, while the WTI Crude Oil spot price ended the period down only 0.5% to end at US$36.94 per barrel.

Another interesting story in this quarter has been the turnaround in gold prices. After languishing for three years it appears that bullion may have bottomed at the end of 2015. Prices have surged almost 14% percent this quarter in one of the biggest quarterly moves in several years.

The impact on many gold stocks has been even more dramatic. Our holding of Teck Resources (TCK.b) enjoyed a total return of 84.4% percent in Q1 and was our best performing position.

Financials in general had mediocre performance this quarter delivering low single-digit returns, however, Manulife (MFC) suffered energy-related investment losses that took investors by surprise. As a result, shares sold off during this quarter and had a total return of negative 10.4% percent. This was our worst performing position this quarter.

Implied volatility levels had begun to settle in the fourth quarter of 2015, however, the price reversal that began at the end of January brought elevated volatility levels. By mid-February, the VIXC (S&P TSX 60 VIX) was testing the intra-day highs of 2015.

The level of overwriting was increased again this quarter to take advantage of this elevated volatility. The average for this quarter was 14.3 per cent compared to 6.7 per cent in Q4 of 2015.

The Fund delivered a total return of 7.2 percent compared to 9.2 per cent for the equally weighted universe.

The trading price on March 31, 2016 was $5.56 up $0.28 from the December 31, 2015 trading price of $5.28. The March 31 trading price of $5.56 represents a discount to NAV of $0.40 per unit or 6.7 percent of the $5.96 NAV.

Net Asset Value at quarter end December 31, 2015 was $5.71 versus $6.06 on September 30, 2015. Unitholders received distributions totaling $0.09838 during the quarter.

After three weak quarters, the fourth quarter of 2015 started out well but quickly resumed the downtrend. Most of the weakness can be attributed to further downside in crude which traded below U$35 per barrel for the first time in thirteen years.

Teck Resources (TCK.b) continued lower this quarter down 15.4 per cent in total return. However, the weakest performer in our core portfolio was Russel Metals (RUS) which was down 23.9 per cent. The portfolio weights were kept as low as possible in these names.

The best performers this quarter were Bank of Montreal (BMO) and Transcanada Corp (TRP) which delivered positive returns of 8.4 per cent and 8.3 per cent respectively.

Volatility spiked in the prior quarter and started to settle down going into this quarter. The levels continued lower through the quarter despite the weaker price levels which suggested a surprising level of investor complacency. The S&P TSX 60 VIX (VIXC) traded below 20 per cent for most of the fourth quarter.

Overwriting activity was slightly lower in this quarter compared to the prior quarter with the average level at 6.7 per cent.

The Fund delivered a total return of negative 4.2 per cent compared to negative 2.7 per cent for the equally weighted universe.

The trading price on December 31, 2015 was $5.28, down $0.43 from the September 30, 2015 trading price of $5.71. The September 30 trading price of $5.28 represents a discount to NAV of $0.43 per unit or 7.5 per cent of the $5.71 NAV.

Net asset value (“NAV”) at September 30, 2015 was $6.06 versus $6.51 on June 30, 2015. Unitholders received distributions totaling $0.10383 during the quarter.

Markets had turned down in the second quarter and continued lower right through the third quarter of 2015 driven predominantly by a dramatic correction in oil prices. Crude fell below US$40 a barrel for the first time since 2009. The Energy sector component of the TSX was down 18% this quarter. Materials sector was even harder hit down nearly 25%.

One of the hardest hit names in the Materials sector was Teck Resources (TCK.b), one of our core holdings, down over 48% in Q3. The Manager had kept the weight at the low end of the allowable range to minimize the impact on the Fund.

Consumer names fared better this quarter and Thomson Reuters Corp (TRI) was our best performer delivering a total return of 13.7% over this quarter.

After years of below average volatility levels, the S&P TSX 60 VIX (VIXC) soared to 5-year highs briefly in late August on an especially tumultuous day of market action. However, this elevated volatility was short-lived and settled the quarter in the low 20s compared to the long-term average of 17%.

With volatility somewhat elevated, the Fund increased its overwriting to capitalize on the higher option premiums and closed this quarter with 17.3% of the portfolio overwritten.

The Fund delivered a total return of negative 5.3% compared to negative 6.63% for the equally weighted universe.

The trading price on September 30, 2015 was $5.71, down $0.75 from the June 30, 2015 trading price of $6.46. The September 30th trading price of $5.71 represents a discount to NAV of $0.35 per unit or 5.8% of the $6.06 NAV.

Net Asset Value (“NAV”) at June 30, 2015 was $6.51 versus $6.99 on March 31, 2015. Unitholders received distributions totaling $0.11283 during the quarter.

After a sharp correction in early March, the TSX broad index appeared to be continuing higher. However, the 2015 high for the year-to-date was set in mid-April and has trended lower since then. Canadian markets closed the quarter at the low for Q2.

Industrials and Utility names were the hardest hit during this period. Most sectors were down except for Consumer stocks with small positive returns and Healthcare showing stronger returns led by Valeant Pharmaceuticals.

After stemming losses in the first quarter, AGF Management (AGF.b) and Teck Resources (TCK.b) both resumed their downtrend and were our weakest performers this quarter at negative 28.8% and negative 27.9% respectively. Manulife Financial Corp (MFC) had a great quarter and returned 8.7% to its shareholders during the quarter.

Volatility continued to drift lower in the second quarter and traded in a range in the mid-teens. The S&P/TSX 60 VIX (VIXC) got as low as 12% but ended the quarter at 13.5%.

With volatility falling, our overwriting activity remained relatively quiet. However, we were able to selectively write some of the names showing weaker price action. The average for the period was 9.4% and 9.5% of the portfolio was overwritten at the end of the quarter.

The Fund delivered a total return of negative 5.3% compared to negative 5.0% for the equally weighted universe.

The trading price on June 30, 2015 was $6.46, down $0.54 from the March 31, 2015 trading price of $7.00. The June 30th trading price of $6.46 represents a discount to NAV of $0.05 per unit or 0.8% of the $6.51 NAV.

As of March 31, 2015, the Net Asset Value per unit of CDD.UN was $6.99 vs. $7.17 on December 31, 2014. Unitholders received regular distributions totaling $0.11576 per unit during the quarter.

The unit’s closing market price March 31, 2015 was $7.00 which represents a 1 cent premium to its underlying NAV.

The healthcare and technology sectors enjoyed the strongest performance on the TSX this quarter while other sectors delivered low single-digit positive or negative returns.

Thompson Reuters (TRI) was the best performing stock in the portfolio for the second consecutive quarter up 10.4%, while Teck Resources (TCK.b) recouped nearly half its fourth quarter losses up 9.4%. Utility names were modestly higher but fund performance was dragged down by CIBC, which was down 6.97%.

With volatility declining over the quarter from 25% in January and markets generally up, the level of call writing was minimal with an average written position of 5.3% though trended up to 12.3% at quarter end.

Net Asset Value (“NAV”) at quarter end December 31, 2014 was $7.17 versus $7.32 on September 30, 2014. Unitholders received distributions totaling $0.11863 during the quarter.

The fourth quarter started with markets in correction mode. The pullback continued into mid-October with some dramatic down-days along the way which offset most of the 2014 gains to that point. Uncertainty returned to the markets over the next couple of months and into the end of the year, as losses were retraced and subsequent gains were corrected.

On a sector basis, returns continue to be mixed. Consumer and Technology stocks delivered strong double-digit gains; however, Energy and Materials were significantly lower. Financials, the other heavily weighted sector in our Fund, were relatively flat.

Thompson Reuters Corp (TRI) was easily our best performing stock up almost 16% on a total return basis. Teck Resources Ltd. (TCK.b) reacted to the big pullback in gold and sold off 22.7%. The overall market as represented by the S&P TSX 60 Index was basically flat with a total return of negative 0.3 per cent.

Volatility was starting to pick up at the end of the third quarter and continued into the fourth. Implied volatility as measured by the S&P TSX 60 VIX index peaked at just under 24% percent in October and tested this level again in December before returning to the mid-teens as the year drew to a close. Our overwriting activity remained about the same as the third quarter, which was relatively low. Our model did not signal a return to more overwriting during this period.

The Fund delivered a total return of negative 0.50 percent which compares favorably to negative 2.04 per cent for the equally weighted universe.

The trading price on December 31, 2014 was $6.53, down $0.595 from the September 30, 2014 trading price of $7.125. The December 31 trading price of $6.53 represents a discount to NAV of $0.64 per unit or 8.9 percent of the $7.17 NAV.

Net Asset Value at quarter end September 30, 2014 was $7.32 versus $7.29 on June 30, 2014. Unitholders received distributions totaling $0.12102 during the quarter.

The broad-based rally that started in 2013 continued unabated well into the third quarter of 2014. There was a little pause in August but new highs were made in early September. These summer gains were erased, however, as the quarter drew to a close with the market in correction mode. Market weakness stemmed from a wide variety of factors including softer economic data here in Canada, and geopolitical concerns such as the rise of the ISIS which could impact global natural resources.

In terms of sectors, it was more of a mixed bag this quarter with about half delivering flat to negative returns with the rest seeing mainly single-digit positive returns. Our best performer was Transcanada Corp (TRP) but this performance was very stock specific. The politics over the Keystone pipeline has been heated for some time but took on a new twist recently when investors began to consider TRP a potential candidate for activist investors. The total return for TRP this quarter was 14.2 per cent.

Gold began to slide in September along with equities taking Teck Resources lower. It was our worst performer this quarter at negative 12.9 percent. The overall market was relatively flat with the S&P/TSX Composite index posting a return of negative 0.5 percent in Q3.

The quarter started quietly with volatility near the lows for the year, however, this calm came to an end in early August when North American markets reacted to concerns in Europe and Argentina, as well as, the Ebola crisis and the rise of ISIS. Implied volatility as measured by the S&P/TSX 60 VIX spiked to over 16% in early August and closed out the quarter not far from these levels. Overwriting activity remained fairly quiet in the third quarter as it was in the previous quarter until volatility spiked in September and overwriting activity was increased. The fund ended the quarter with 10.2 per cent of the portfolio overwritten.

The fund delivered a total return of 2.07 percent compared to the TSX 60 which had a total return of 0.4 percent. The relatively high weighting of Financials in this fund contributed to our relative outperformance during this period.

The trading price on September 30, 2014 was $7.125, down $0.125 from the June 30, 2013 trading price of $7.25. The September 30 trading price represents a discount to NAV of $0.195 per unit or 2.7 percent of the $7.32 NAV.

Net Asset Value at quarter-end June 30, 2014 was $7.29 versus $7.19 on March 31, 2014. Unitholders received distributions totaling $0.11733 during the quarter.

Most sectors enjoyed gains in the second quarter but all were single-digit aggregate returns, led by Energy and Industrial names. Our star performer was Russell Metals (RUS) with a total return of 15.1 percent which rebounded from a weak first quarter. Scotiabank (BNS) with a total return of 12.1 percent was the next best which also recovered from a weaker previous quarter. Canadian Utilities (CU) was the laggard this quarter. Its share price peaked this quarter and rolled over delivering a negative 2.1 percent total return in Q2.

Volatility, or rather the lack of volatility, continues to be an interesting story in 2014. Levels continued to drift lower this quarter with the S&P/TSX 60 VIX spending several days at record lows. We reduced our overwriting activity further this quarter averaging less than 5 percent during the period and closing June 30 with only 2.4 percent of the fund written.

The Fund delivered a total return of 3.0 percent compared to the S&P/TSX 60 which had a total return of 6.3 percent. This relative underperformance is due to the higher concentration of Financials in this fund which did not fare as well.

The trading price on June 30, 2014 was $7.25, up $0.53 from the March 31, 2013 trading price of $6.72. The June 30 trading price of $7.25 represents a discount to NAV of $0.04 per unit or 0.5 percent of the $7.29 NAV.

Net Asset Value at quarter end March 31, 2014 was $7.19 versus $7.30 on December 31, 2013. Unitholders received distributions totaling $0.1157 during the quarter.

The broad market in Canada ended 2013 at the highs for the year. That rally has continued mostly unabated into the first quarter of 2014. Materials had lagged other sectors on weak gold prices last year but rebounded in Q1 with gold approaching US$1,400 once again. All sectors delivered positive single-digit returns except for Healthcare which posted a 12.6 percent total return on the strength of Valeant Pharmaceuticals International Inc. (VRX).

Our core names saw a wider range of returns. Canadian Utilities Inc. was the best performer with over 16 percent total return. Also contributing to the positive quarter was Enbridge Ltd. up almost 9 percent. The laggards this period were Thomson Reuters Corporation and Teck Resources Ltd. down 5.0 percent and 13.7 percent respectively.

Volatility has remained well below its long-term average for all of 2014 so far. While economic uncertainty persists, it is not being reflected in stock prices. The low volatility and rising market made for difficult overwriting conditions. We kept the level of overwriting low, averaging 8.3 percent for the quarter to maximize upside participation.

The Fund delivered a total return of 0.1 percent which underperformed the TSX 60 Index with a total return of 5.5 percent.

The trading price on March 31, 2014 was $6.72, down $0.04 from the December 31, 2013 trading price of $6.76. The March 31st trading price of $6.72 represents a discount to NAV of $0.47 per unit or 6.5 percent of the $7.19 NAV.

Net Asset Value (“NAV”) at December 31, 2013 was $7.30 versus $6.91 on September 30, 2013. Unitholders received distributions totaling $0.11641 during the quarter.

The market low for 2013 occurred in June. Since then the Canadian market has trended higher with both the third and fourth quarters delivering good returns. The total return on the S&P/TSX Composite on the quarter was 7.26%. Once again, the rally was broad with all but one sector posting positive returns. Gold stocks dragged the Materials sector lower as the commodity moved down to levels not seen since 2010; gold bullion closed the year at just over US$1,200 per ounce.

Financials and Consumer stocks continued to lead the market higher. Two of the top three stocks in this quarter were from these sectors. Manulife Financial, Russell Metals, and Scotiabank delivered total returns of 23.77%, 16.26%, and 12.59% respectively. Our weakest performer was miner Teck Resources Ltd with a total return of 1.50%.

There was a lot of perceived uncertainty in the economy, however, with markets continuing to forge higher this quarter, volatility continued to move lower. The S&P/TSX 60 VIX posted an all time closing low of 10.3% this quarter. We began to reduce our overwriting in the third quarter and continued to do so this quarter in order to participate in more market upside. Our average overwritten position this quarter was 5.0% of the fund and we closed the quarter with no call option positions.

The Fund delivered a total return of 7.33% which is on par with the total return on the TSX 60 of 7.67%.

The trading price on December 31 was $6.76, up $0.04 from the September 30 trading price of $6.72. The December 31 trading price of $6.76 represents a discount to NAV of $0.54 per unit or 7.4% of the $7.30 NAV.

Net Asset Value (NAV) for the quarter ended September 30, 2013 was $6.91 versus $6.58 on June 30, 2013. Unitholders received distributions totaling $0.1099 during the quarter.

After falling to year-to-date low near the end of June, the Canadian market started a rally which persisted for most of the third quarter. The total return on the S&P/TSX Composite Index during the quarter was 6.24%. All but the Utilities sector, which was down 3.08%, posted low to mid single-digit positive total returns this quarter. The Financials, which are well represented in our core portfolio, delivered decent returns after posting comparatively weak returns for the previous two quarters.

Teck Resources Ltd. had delivered mixed results over the past year; however, it was our best performer this quarter with a total return of 23.19%. Other names, in the Fund that performed well, include: Russell Metals Inc., AGF Management Ltd. and National Bank of Canada. With Utilities sector underperforming in general, Canadian Utilities Ltd. was our worst performer at negative 3.35%.

With the market rallying into the third quarter, implied volatility began to weaken and even tested the year-to-date lows in August. The S&P/TSX 60 VIX mostly traded in a range between 12% and 16% during this quarter. Our overwriting activity had increased during the second quarter with the increased volatility and weaker markets. But, with the third quarter rally underway, our overwriting activity diminished and the Fund had just over 10% of its portfolio with written call positions as at September 30th.

The Fund delivered a total return of 6.73% which compares favourably to the total return on the S&P/TSX 60 Index of 6.19%.

The trading price on September 30th was $6.72, up $0.27 from the June 28th trading price of $6.45. The September 30th trading price of $6.72 represents a discount to NAV of $0.19 per unit or 2.7% of the $6.91 NAV.

Net Asset Value (NAV) for the quarter ended June 30, 2013 was $6.58 versus $6.96 on March 31, 2013. Unitholders received cash distributions totaling $0.11293 during the quarter.

After trading virtually sideways for two months, the Canadian market started an up and down quarter in early April that culminated with the S&P/TSX Composite posting a total return of negative 4.07%. The S&P/TSX 60 Index was slightly worse at negative 4.10%. Materials and Telecom stocks were the main culprits this quarter. Three quarters of the Material names delivered negative returns, mainly in the Gold sector as bullion prices continued to erode throughout the quarter. Gold traded below US$1,200 per ounce for the first time since September 2010.

In the face of broad negative returns, there were two star performers in the Fund this quarter, namely: Manulife Financial Corp and Thomson Reuters Corp. Their respective total returns for this quarter were 13.44% and 5.09%. The worst performer, for the second quarter in a row, was Teck Resources Ltd.-Class B at negative 19.96%.

Implied volatility began to move somewhat higher in the second quarter after making multi-year lows in January and further intra-lows in March. Interestingly, the volatility of the implied volatility measure S&P/TSX 60 VIX has also been moving higher. The 30-day average of this series reached levels not seen since September 2011. The Fund took advantage of the higher volatility and increased its overwriting in this quarter to just under 12% on average from approximately 2% in the first quarter. About 30% of the Fund was overwritten as at June 30, 2013.

The Fund delivered a total return of negative 3.95% which compares favourably to the total return on the S&P/TSX 60 of negative 4.10%.

The trading price on June 28th was $6.45, down $0.21 from the March 28th trading price of $6.66. The June 28th trading price of $6.45 represents a discount to NAV of $0.13 per unit or 1.9% of the $6.58 NAV.

Net Asset Value (“NAV”) for the quarter ended March 31, 2013 was $6.96 versus $6.80 on December 31, 2012. Unitholders received distributions totaling $0.1132 during the quarter.

The rally that started in Q4 of 2012 continued to the end of January 2013, but then traded sideways for the rest of Q1 of 2013. The S&P/TSX 60 Index posted a total return of 3.2% in this quarter. The two sectors driving this return were Healthcare and Technology with big returns in two specific names, Blackberry Inc. and Valeant Pharmaceuticals. The three primary sectors represented in our core universe, Financials, Materials, and Energy, saw returns of 4.2%, negative 10.4% and 4.2% respectively. The Materials sector saw the most weakness as investors reacted to the steady erosion in gold bullion prices.

Thomson Reuters was our best performer with a total return of 15.7%, followed by Canadian Utilities Ltd. at 12.6%. With the gold price falling, our holding in Teck Resources Ltd. was the worst performer at negative 20.9%.

Implied volatility had been in decline for most of 2012 and ended the year near the lows. This trend continued in Q1 of 2013. The S&P/TSX VIX (VIXC) made new multi-year lows in January and again in March trading below 10% on March 20th. The relatively low levels of implied volatility make overwriting more challenging due to the lower option premiums available.

The TSX 60 Index started the year in strong fashion, continuing the uptrend that started in mid-November of 2012. In order to participate in this uptrend, we reduced our overwriting activity from just under 20% during Q4 of 2012 to 1.5% on average for Q1 of 2013. The Fund delivered a total return of 4.0% which compares favorably with the S&P/TSX 60 Index at 3.2%.

The trading price on March 28th was $6.66, up $0.32 from the December 28th trading price of $6.34. The March 28th trading price of $6.66 represents a discount to NAV of $0.30 per unit or 4.3% of the $6.96 NAV.

Closing Net Asset Value (“NAV”) for the quarter ended December 31, 2012 was $6.80 versus $6.62 on September 30, 2012. Unitholders received distributions totaling $0.10726 during the quarter.

The broad-based market continued the positive growth seen in the previous quarter, albeit slower. The S&P/TSX 60 Index posted a total return of 2.3% with Consumer stocks up 8.7%. The Energy and Materials sectors, two of the strongest performers in Q3, sustained negative returns in this quarter, while Financials stocks, the key sector represented in our Fund, was up 5.2%.

Despite the weakness in the Materials sector this quarter, our best performer was Teck Resources Ltd. – Class B which had a total return of 26.2%, followed by Manulife Financial Corp. up 15.1%.

AGF Management Ltd. (AGF) has been in a pronounced downtrend since 2011 after several quarters of net redemptions. AGF was our worst performer this quarter which had a negative return of 9.3%. The Fund was able to mitigate this negative return somewhat by keeping the weight at the lowest allowable level.

BCE Inc. was down for much of the quarter following its announcement to acquire Astra Media Inc. in an all cash deal for $3.7 billion at a 37% premium to the current share price. There were no changes to the dividend this quarter; however, the BCE share price recovered somewhat to finish the quarter roughly flat on a total return basis (after factoring in the over 5% dividend yield).

After testing the YTD lows last quarter, implied volatility traded sideways for most of the fourth quarter with a brief spike in November but closed the year not far off the 12-month lows.

The average level of overwriting for Q4 was down to 18.7% compared to 29.1% in Q3. Lower levels of implied volatility made call writing more challenging this quarter. The Fund delivered a total compound return of 4.3% for the quarter which compares favorably to the total return on the S&P/TSX 60 Index of 1.5%.

The closing price on December 29th was $6.35, down $0.23 from the September 30th trading price of $6.58.

The December 29th closing price of $6.35 represents a discount to NAV of $0.45 per unit or 6.62% of the $6.80 NAV.

Closing Net Asset Value (“NAV”) for the quarter ended September 30t, 2012 was $6.62 versus $6.68 on June 30, 2012. Unitholders received distributions totaling $0.10839 during the quarter.

The quarter ending September 30, 2012 recovered most of the broad market losses sustained in the previous quarter. All sectors delivered positive returns; however, only the Materials sector produced double-digit gains. The S&P/TSX 60 Index posted a total return of 6.7% in the third quarter, with Materials up over 13%. Financials, as the key sector represented in its portfolio, was up 4.8%.

Our best performer, namely Russel Metals Inc., was also from the Materials sector, posting a total return of 11.0% in the quarter. All other names had single-digit positive returns except Enbridge Inc. and Teck Resources, which were down 4.9% and 8.0% respectively. Enbridge suffered a pipeline accident in the U.S., albeit relatively minor, casting a shadow of uncertainty for investors this quarter. Teck Resources shares experienced sell-off in mid-quarter on weaker-than-expected earnings but did start to recover towards the end of the quarter.

AGF Management Ltd. was mostly flat during the quarter after a terrible first half. The stock appeared to be turning around in September but sold off sharply on weak earnings just before the quarter-end.

Volatility, which had peaked in the fall of 2011 and corrected 50% by the end of the first quarter in 2012, started to normalize in the second quarter. Both actual volatility and implied volatility as measured by the S&P/TSX VIX (VIXC) trended lower throughout the third quarter and tested the lows in the first quarter of 2012.

Overwriting activity was reduced dramatically in the third quarter in order to capture as much upside as possible in the up-trending market. The Fund closed the quarter with only one equity security overwritten, representing 2.5% of its portfolio versus 53.2% at the end of the second quarter, while the average level over the quarter was 29.1%.

The trading price on September 28th was $6.58, up $0.26 from the June 30th trading price of $6.32.

The September 28th trading price of $6.58 represents a discount to NAV of $0.04 per unit or 0.60% of the $6.62 NAV.

Net Asset Value (“NAV”) as of June 30, 2012 was $6.68 versus $7.21 on March 31, 2012. Unitholders received distributions totaling $0.11451 during the quarter.

The market rollover anticipated for the second quarter did come to pass. Most sectors suffered negative returns, some in the double digits. At the same time, implied volatility which had suggested great complacency for several months began to return up to more normal levels.

The S&P/TSX 60 posted a total return of negative 5.4% during the second quarter of 2012. Apart from the Technology sector, Materials and Energy stocks were the laggards on the TSX during the quarter, down 10.8% and 7.2% respectively. Telecommunications and Consumer stocks delivered the best returns in the quarter, however, only in the low single digit.

In line with overall sector performance, BCE Inc. was the best performer in the Fund during the second quarter posting a positive return of 6.5%, followed closely by Enbridge Inc. up 5.7 %. Most of the core holdings suffered negative returns in this quarter. AGF Management Ltd. continued its slide down 26.0% and was our worst performer. Manulife Financial Corp. had staged a nice recovery in the first quarter of 2012, yet it gave back some of these gains in the second quarter at negative 17.0%.

Volatility peaked in the fall of 2011 and began a dramatic slide which continued to the first quarter of 2012. Implied volatility as measured by the S&P/TSX VIX (VIXC) fell from over 30% to less than 15% during this period. After several months of optimism, and perhaps complacency, market participants began to take some profits and volatility climbed to more normal levels in the second quarter. Overwriting activity was increased in the second quarter finishing at just over 50%. The average overwritten percentage for the second quarter was 20.8%. The Fund delivered a total return of negative 5.7% for the period.

The last trading price for the second quarter of 2012 was $6.30, down $0.55 from the March 31st trading price of $6.87.

The last trading price of $6.30 represents a discount to NAV of $0.38 per unit or 5.69% of the $6.68 NAV.

Net Asset Value (“NAV”) as of March 31, 2012 was $7.21 versus $6.94 on December 31, 2011. Unitholders received distributions totaling $0.11391 during the quarter.

The economic recovery in Canada continued into the first quarter, but the slow pace has not improved since last year-end. Markets forged ahead in anticipation of sustained recovery but showed signs of rolling over by mid-March. The U.S. market by comparison is expanding at a much faster pace with many sectors as well as the overall market sustaining almost twice the year-to-date gains of the TSX.

The S&P/TSX 60 posted a total return of 4.6% in the first quarter. Healthcare led the gains for the third consecutive quarter, followed by the Consumer Discretionary and Financial Services sectors. Financials saw double-digit positive gains for the first time since 2010.

For the names in our core portfolio, Manulife Financial Corp (MFC) was the best performer this quarter with a total return of 25.8%. This stock has been one of our most volatile holdings and in a prolonged downtrend since the financial crisis of 2008, so it’s encouraging to have it positively contributing to portfolio performance again.

The laggard this quarter was TransCanada Corp. (TRP), which was down 2.8% in the quarter. This usually stable name came under pressure in March when it announced a temporary shutdown of its Keystone pipeline to retrieve disabled cleaning equipment.

Implied volatility on TSX stocks as measured by the VIXC has been in a downtrend since peaking last October. While usually strongly inversely correlated with market prices, the VIXC continued to weaken into late March even though prices had started to roll over earlier in the month. The lower implied volatility of TSX stocks reduced the value of option premiums, however, the Fund selectively wrote specific names within the portfolio. The average overwritten level over the past quarter was 15.8% ending the quarter at 14.3%. The Fund delivered a total compound return of 5.5% compared to 7.5% for the equal weighted benchmark.

The trading price at the close of March 30, 2012 was $6.87, up $0.56 from the December 29th trading price of $6.31.

The March 30th trading price of $6.87 represents a discount to NAV of $0.34 per unit or 4.72% of the $7.21 NAV.

Net Asset Value (“NAV”) at December 31, 2011 was $6.94 versus $6.84 on September 30, 2011. The Fund paid distributions totaling $0.11007 during the quarter.

After several months trending lower, the market bottomed and started to recover in early October. The economic recovery has been anemic so far, so time will tell whether the equity investors were correct in discounting better earnings in 2012. Lighter than usual volume suggests the year-end rally may have little conviction.

The S&P TSX 60 Index ended Q4 up 2.8% but well off the highs set earlier in the quarter. The financials lagged the broad index this quarter diverging from its outperformance during much of 2011.

Following a massive pullback, Teck Resources (“TCK.b”) finally started to recover in Q4 and was the Funds top performer delivering 17.4% since September 30th. Enbridge Inc (“ENB”) also had double-digit returns; while other core names had single-digit returns. Our worst performer was Manulife Financial Corp (“MFC”) at negative 8.1%. Life Insurance companies are still struggling to regain their footing since the financial crisis.

Volatility for the year peaked this quarter with the S&P/TSX 60 VIX (“VIXC”) reaching just below 40% in early October. It worked its way lower for the remainder of the year to close just over 20%. Investor uncertainly, as measured by volatility, spiked due to the European debt crisis. While some progress has been made in this regard, very little was resolved in 2011 yet volatility continued to soften. We expect volatility to increase again in 2012 driven by headlines in much the same way it was in Q3 of 2011.

The fund attempted to monetize as much volatility as possible during the quarter, with average overwriting levels at over 30% over the three months. The fund ended the quarter with 12.5% of the fund overwritten. With volatility falling throughout most of the quarter and prices generally rising, options premiums were not enough to offset the upside sold away with overwriting. The fund delivered a total compound return for the quarter of 3.06% compared to 4.52% for the equal weighted benchmark.

The trading price on December 29th was $6.31, down $0.41 from the September 30th trading price of $6.72.

The December 29th trading price of $6.31 represents a discount to NAV of $0.63 per unit or 9.1% of the $6.94 NAV.

Net Asset Value at quarter end September 30, 2011 was $6.84 versus $7.44 on June 30, 2011. Unitholders received distributions totaling $0.11484 during the quarter.

The correction, which began in early March, continued with a vengeance throughout the third quarter.

The S&P TSX 60 Index was down more than 12% during the period and ended the quarter near the lows. Once again, as in the previous quarter, the Financials, down 9.6%, fared a bit better than the broad based index.

Similar to the second quarter, the Utility stocks made the greatest contribution to the Fund and were, in fact, the only stocks to deliver positive total returns.

The Fund's top three performers were Canadian Utilities (“CU”) up 11.7%, Enbridge Inc. (“ENB”) up 7.5% and, BCE Inc. (“BCE”) up 5.3%.

Teck Resources Ltd has been a great contributor at various stages over the past year, however, it was the worst performer during the quarter down 36.9%.

There was marginal improvement in credit conditions in the third quarter which helped the banks outperform the broad market, and dramatically outperformed their U.S. counterparts.

Volatility, which had been relatively mild for the first half of 2011 virtually doubled in mid-summer. Uncertainly over the European debt crisis and policy gridlock in the U.S. left investors perplexed and divided as to how to properly position.

The uncertainly will likely continue well for the balance of 2011 and perhaps into 2012.

The Fund had taken advantage of lower volatility in the second quarter to purchase some put protection, and dramatically stepped-up our call overwriting in the third quarter, ending the period with 25.9 % of the portfolio subject to covered calls. These actions helped the Fund outperform its benchmark by over 300 basis points in the quarter.

The trading price on September 30th was $6.72, down $0.47 from the June 30th trading price of $7.19.

The September 30th trading price of $6.72 represents a discount to NAV of $0.12 per unit or -1.8% of the $6.84 NAV.

Net Asset Value at quarter end June 30, 2011 was $7.44 versus $7.69 on March 31, 2011. Unitholders received distributions totaling $0.12431 during the quarter.

After a brief recovery, the correction, which began in early March, continued throughout the second quarter.

The S&P TSX 60 Index Total Return Index was down nearly 5% in Q2. Financials, which represent approximately half of the core portfolio, fared slightly better than the broad index, but were also down this quarter.

The strength in the portfolio this quarter came from utility-related stocks such as, TransCanada Corp. (“TRP”) and BCE Inc. (“BCE”) both up 8.8%, Canadian Utilities Ltd. (“CU”) up 6.5%, and Enbridge Inc. (“ENB”) up 6.4%.

Despite improved year over year results, Russel Metals Inc. (“RUS”) was the worst performer in the core fund down 8.9%. Waning economic growth expectations worldwide weighed on all steel producers.

Credit conditions are likely to improve somewhat in 2011, which will benefit the bank stocks, however, economic growth may be slower than previously expected for the next two quarters. This slowdown may negatively impact the performance of our resource-based holdings.

Volatility remained relatively low throughout the quarter, which limited our overwriting opportunities. The fund was, nevertheless, overwritten for most of the period and ended the quarter with approximately 12 percent of the portfolio subject to covered calls.

Given the concentrated exposure to the Financial sector, the Fund took advantage of the low volatility levels to purchase protective puts on this sector. The profits from these positions helped mitigate the negative performance of our bank holdings during the quarter.

The trading price on June 30th was $7.19, down $0.11 from the March 31st trading price of $7.30.

The June 30th trading price of $7.19 represents a discount to NAV of $0.25 per unit or -3.36% of the $7.44 NAV.

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 December (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
Units surrendered for redemption at least 20 business days prior to the last day of December will be redeemed at 100% of net asset value, valued on the last business day of December being the redemption day. 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 the Units are not listed on any stock exchange, on the principal market on which the Units are quoted for trading) 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 (or, if the Units are not listed on any stock exchange, on the principal market on which the Units are quoted for trading).

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.