Mutual Funds. Mutual Funds Explained. Lorem ipsum dolor

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1 Lorem ipsum dolor Sit amet, consetetur sadipscing elitr, sed diam nonumy eirmod tempor invidunt ut labore et dolore magna gubergren, no sea takimata sanctus est Lorem ipsum dolor sit amet. Mutual Funds Mutual Funds Explained A Mutual Fund is an investment company that pools the money of many investors and invests it into a variety of stocks, bonds or other securities.

2 Mutual Funds One of the main advantages of Mutual Funds is that they give you access to professionally managed, diversified portfolios of investments with a small amount of capital. A Mutual Fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. What are Mutual Funds? Mutual Funds Explained A Mutual Fund is an investment company that pools the money of many investors and invests it into a variety of stocks, bonds or other securities. A Mutual Fund issues and redeems shares to meet demand, and the redemption value of each share is the net asset value per share and, in some cases, less a redemption fee (or rear-end load). One of the main advantages of Mutual Funds is that they give you access to professionally managed, diversified portfolios of investments with a small amount of capital. A Mutual Fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.. Types Of Mutual Funds The popularity of Mutual Funds means that Canadian investors have a constantly growing array of funds from which to choose. Each fund adheres to a specific investment objective using a unique mix of strategies, assets, and regions or sectors of investments. The following are just some of the more common categories of Mutual Funds available: A Money Market Fund A Money Market Fund is an open-ended Mutual Fund that invests only in shortterm (but high credit quality) securities. These can include bankers' acceptances, commercial paper, repurchase agreements and government bills. Money Market Funds are not federally insured, although the portfolio may consist of guaranteed securities and/or the fund may have private insurance protection. Fixed Income Funds The objective of Fixed Income Funds is to generate income on a regular basis, mostly through the fixed rate of return offered by high-quality government and corporate bonds, in addition to mortgages. Fixed Income Funds are among the most secure of Mutual Funds, but as with all investments, there are price fluctuations as a result of interest rate movements. Growth (or Equity) Funds Considered the most aggressive of the Mutual Funds, Growth Funds (also known as Equity Funds) invest in stocks and income trusts. Because they aim to grow faster than Money Market or Fixed Income Funds, there is usually a higher degree of risk associated with Growth Funds. But 2 Mutual Funds Scotia itrade

3 The popularity of Mutual Funds means that Canadian investors have a constantly growing array of funds from which to choose. even within the variety of Growth Funds, investment styles can vary greatly, with some funds investing primarily in established or 'blue chip' companies while others focus on junior or small cap companies. And, adding still more options for an investor, are specialized funds which concentrate investing in specific sectors, countries and regions. Balanced Funds As its name suggests, this type of Mutual Fund aims to provide a balanced mixture of safety, income and capital appreciation using a combination of fixed income and equities. For example, a balanced fund may offer you a weighting of 60% equity and 40% fixed income. (Asset Allocation Funds are also Balanced Funds but typically do not hold specific percentages of any asset class.) Index Funds Using a mix of equities and fixed income securities, Index Funds strive to mimic a specific index such as the S&P/TSX Composite Index, NASDAQ or Dow Jones Industrial Average. As a result, the funds' value will go up or down with the index. Because Index Funds do not involve as much work on the part of a portfolio manager, these funds will typically offer lower MERs than more actively managed Mutual Funds. Common Mutual Fund Terms Minimum Purchases Minimum purchases refers to the lowest dollar amount or smallest share quantity required to invest in a specific Mutual Fund t (Minimum Initial Purchase) or to deposit into an existing Mutual Fund account (Minimum Additional Purchase). These amounts may be lowered for buyers participating in an automatic purchase plan. No-Load Mutual Fund A kind of fund that is being offered directly to the investor by an investment company and therefore comes with no sales charge or commission. Turnover A measure of a Mutual Fund's trading activity during the previous year, expressed as a percentage of its average total assets. For example, a turnover ratio of 25 % means that the value of trades represented one-fourth of the assets of the fund. 3 Mutual Funds Scotia itrade

4 Management Expense Fees Management expense ratios (MERs) vary based on the type of Mutual Fund you hold. Equity and Balanced Funds typically have higher MERs than Money Market and Bond Funds. Early Redemption Fee This fee is charged when Mutual Funds are redeemed before the required minimum period. Scotia itrade charges an early redemption fee of 1% (minimum of $38.88) to your Scotia itrade account on the redemption or switch of all Mutual Funds (other than Scotia Money Market Funds, Dynamic Money Market Funds and Scotia Mutual Funds) held for less than 90 days. Early redemption fees may also be charged by some Mutual Fund companies. Mutual fund charges imposed by the fund companies are in addition to the above fees. The minimum purchase amount for all Money Market Funds is $5,000. All other funds are subject to minimum purchase and redemption amounts as outlined in the prospectus or $1,000, whichever is greater. Switch orders are only permitted within the same load type & family of funds. 4 Mutual Funds Scotia itrade

5 Research a Mutual Fund You can access Mutual Fund Research from within Scotia OnLine. Navigate to Quotes & Research > Mutual Funds. You have access to the following tools: Fund Commentary Compare Tool Fund Screener Classroom If you're looking for more general information about Mutual Funds, visit our Mutual Funds page. Learn more 5 Mutual Funds Scotia itrade

6 Invest in Mutual Funds Our Mutual Fund page allows you to evaluate, compare, learn and invest in over 3,200 Mutual Funds from leading Mutual Fund companies. Select Account Select Mutual Fund Enter Mutual Fund or use magnifying glass to search Select Order Type, i.e. do you want to buy or sell Select Amount, i.e. Dollars or Units, and enter amount Select Dividend Reinvest or Cash Click Preview Order. Check your order carefully before inserting your Access Code and submitting your order 6 Mutual Funds Scotia itrade

7 To learn more about Mutual Funds and Mutual Fund Tools, join our Webinars or view our Webinars on Demand. 7 Mutual Funds Scotia itrade

8 Mailing address Scotia itrade PO Box 4002 Station A Toronto, ON M5W 0G4 Investor Information Centre 48 Yonge Street (Yonge/Wellington) Toronto, ON, M5E 1G6 Tel: education@scotiaitrade.com Scotia itrade (Order-Execution Only Accounts) is a division of Scotia Capital Inc. ("SCI"). SCI is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Scotia itrade does not provide investment advice or recommendations and investors are responsible for their own investment decisions. Registered trademark of The Bank of Nova Scotia. Used under license. Scotia itrade All Rights Reserved.