The Fiera Sceptre Mutual Funds

Transcription

The Fiera Sceptre Mutual Funds
SEMI-Annual Financial Report
Fo r t h e s i x m o n t h s e n d e d JUNE 30, 201 1
Sceptre Income & Growth Fund
Sceptre Bond Fund
Sceptre High Income Fund
Sceptre Canadian Equity Fund
Sceptre Equity Growth Fund
Sceptre Large Cap Canadian Equity Fund
Sceptre U.S. Equity Fund
Sceptre Global Equity Fund
Sceptre Money Market Fund
blank
TA B L E O F C O N T E N T S
FINANCIAL STATEMENTS
Sceptre Income & Growth Fund
Sceptre Bond Fund
Sceptre High Income Fund
Sceptre Canadian Equity Fund
Sceptre Equity Growth Fund
Sceptre Large Cap Canadian Equity Fund
Sceptre U.S. Equity Fund
Sceptre Global Equity Fund
Sceptre Money Market Fund
1
10
16
22
28
36
42
49
56
NOTES TO FINANCIAL STATEMENTS
62
These semi-annual financial statements have not been audited by the appointed auditors
blank
S C E P T R E I N CO M E & G R OW T H F U N D
STATEMENTS OF NET ASSETS
STATEMENTS OF OPERATIONS
As at June 30, 2011 (Unaudited) and December 31, 2010 (Audited)
For the six-months ended June 30 (Unaudited)
2011
(Thousands of dollars except per-unit amounts)
Assets
Investments at fair value
(at cost $38,347; 2010 – $41,930)
Short-term investments
(at cost $5,068; 2010 – $968)
Cash
Due from brokers
Accrued interest and dividends receivable
Accounts receivable for units sold
Other receivables
$ 44,976
Liabilities
Bank indebtedness
Due to brokers
Accounts payable for units redeemed
Management fees payable
Other accrued liabilities
2010
$
50,629
5,073
586
—
124
5
9
968
—
366
164
—
9
50,773
52,136
—
—
—
33
120
67
355
34
38
80
153
574
Net assets representing
Unitholders’ Equity
$ 50,620
$
51,562
Net assets per class
Class A
Class D
Class F
Class O
$ 41,953
$
31
$
129
$ 8,507
$
$
$
$
43,500
31
117
7,914
Net assets per unit
Class A
Class D
Class F
Class O
$
$
$
$
Signed on behalf of
Fiera Sceptre Capital Inc., Fund Manager
Sylvain Brosseau, Director
18.60
18.39
18.72
19.39
$
$
$
$
18.69
18.51
18.77
19.33
2011
Investment income
Interest
Income received from income trusts
Security lending income
Dividends, net of withholding tax ($3; 2010 – $16)
$
Expenses
Management fees
Custodian fees
Securityholder reporting costs
Audit fees
Legal fees
Administration fees
Independent review committee fees
Other Expenses
395
—
2
298
2010
$
432
16
2
316
695
766
244
17
67
9
12
26
1
—
278
16
61
8
11
13
2
15
376
404
Net Investment income before
waived/absorbed expenses
Expenses waived/absorbed by manager
319
–
362
1
Net investment income
319
363
2,673
(9)
724
(13)
(2,068)
(2,494)
Realized and unrealized gain (loss) on
investments and transaction costs
Realized gain on sale of investments
Transaction costs
Unrealized depreciation of investments and
foreign currency
Net gain (loss) on investments
Increase (decrease) in net assets
from operations
596
$
915
(1,783)
$
(1,420)
Increase (decrease) in net assets from operations per class
Class A
$
733
$
Class D
$
—
$
Class F
$
2
$
Class O
$
180
$
(1,236)
(1)
(2)
(181)
Increase (decrease) in net assets from operations per unit
Class A
$
0.32
$
Class D
$
0.28
$
Class F
$
0.35
$
Class O
$
0.45
$
(0.51)
(2.43)
(0.49)
(0.37)
Jean-Guy Desjardins, Director
The accompanying notes are an integral part of these financial statements
1
STATEMENTS OF CHANGES IN NET ASSETS
2011
2011
2010
Class A
(Thousands of dollars or units)
Net assets at beginning of period
$
Increase (decrease) in net assets from operations
43,500
$
733
2011
2010
2010
Class D
43,612
$
31
Class F
$
1
(1,236)
—
(1)
$
117
$
2
53
(2)
Capital unit transactions
Proceeds from units issued
Value of units redeemed
Units issued on reinvestment of distributions
710
(2,942)
867
542
(2,313)
935
—
—
1
28
—
—
11
—
2
—
—
1
Net capital unit transactions
1
(1,365)
(836)
1
28
13
Distributions paid to unitholders
From net investment income
(915)
(967)
(1)
—
(3)
(1)
Total distributions paid to unitholders
(915)
(967)
(1)
—
(3)
(1)
Net assets at end of period
$
41,953
$
40,573
$
31
$
2011
28
$
$
7,914
$
8,994
$
51
2011
2010
Total Fund
2010
Class O
129
$
51,562
$
915
52,660
180
(181)
880
(405)
101
118
(640)
133
1,601
(3,347)
971
688
(2,953)
1,069
(1,420)
576
(389)
(775)
(1,196)
(163)
(196)
(1,082)
(1,164)
(163)
(196)
(1,082)
(1,164)
$
8,507
$
2011
8,228
2010
$
50,620
2011
Class A
Number of Units
Balance — beginning of period
Units issued and paid during the period
Units redeemed during the period
Balance — end of period
2,328
2011
—
—
—
—
2
—
—
2,387
2
2
2010
2011
Class F
Number of Units
2010
Class O
6
3
1
—
—
—
—
—
7
3
2
2010
2
30
(130)
53
2,255
48,880
Class D
2,434
37
(156)
46
$
409
493
45
(20)
5
7
(35)
7
439
472
STATEMENT OF INVESTMENT PORTFOLIO
As at June 30, 2011
MATURITY
DATE
PRINCIPAL AMOUNT/
COUPON NUMBER OF SHARES/
RATE
UNITS/FACE VALUE
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
587,508
586,452
1.16
498,800
499,753
0.99
Short-Term Notes
Discount Commercial Paper
Financement-Quebec
19-Jul-11
1.071%
500,000
Treasury Bills
Canada Treasury Bills, with various due dates to
September 21, 2011
0.885% – 1.069%
Total Short-Term Notes
4,569,514
4,572,787
9.03
5,068,314
5,072,540
10.02
140,753
54,932
144,446
3,691,697
1,711,972
1,123,700
69,245
849,559
209,908
285,798
119,385
824,220
281,906
282,269
69,114
150,136
59,147
151,137
3,704,036
1,730,160
1,117,502
70,218
839,325
220,632
293,454
121,152
841,154
288,678
285,025
70,431
9,858,904
9,942,187
114,979
139,913
44,688
93,509
94,989
71,996
26,353
202,219
29,991
146,294
156,866
152,000
91,721
54,968
219,965
51,870
39,974
95,150
32,757
119,573
150,257
47,265
95,884
98,190
71,840
35,463
229,522
26,949
151,394
158,205
159,891
98,102
59,691
225,228
55,683
47,134
96,294
44,078
Bonds and Debentures
Government and Guaranteed
City of Toronto
City of Vancouver
City of Vancouver
Government of Canada
McGill University Health Care Centre
Ont. School Boards Financing Corp.
Ont. School Boards Financing Corp.
Province of Ontario
Province of Quebec
Province of Quebec
PSP Capital Inc.
Corporate Bonds
407 International Inc.
Bank of Nova Scotia
Bell Aliant Regional Com. LP
British Columbia Ferry Services Inc.
Brookfield Asset Management Inc.
Brookfield Renewable Power Inc.
Cdn Imperial Bank of Commerce
Capital Desjardins Inc
CIBC Capital Trust
Enbridge Inc.
Enbridge Inc.
Enbridge Inc.
Fortis Inc.
Greater Toronto Airports Authority
27-Sep-16
2-Dec-19
1-Jun-20
1-Mar-13
1-Dec-15
1-Jun-16
1-Jun-17
1-Jun-41
31-Dec-43
19-Oct-26
7-Nov-28
2-Jun-37
1-Dec-38
1-Dec-41
12-Mar-15
16-Jun-15
16-Jun-20
14-Feb-36
26-Jul-40
8-Jun-17
13-Sep-17
13-Oct-34
2-Jun-14
5-Nov-36
30-Apr-20
2-Nov-20
5-May-20
30-Jun-08
19-May-16
9-Mar-20
24-Jul-30
4-Jul-39
15-Feb-16
4-Jun-31
4.500%
4.900%
4.500%
1.750%
3.000%
2.000%
4.000%
4.000%
5.360%
6.550%
5.800%
4.700%
5.000%
5.000%
2.940%
3.880%
4.990%
5.750%
7.125%
4.100%
4.370%
6.250%
8.950%
5.840%
4.110%
3.150%
5.187%
9.976%
5.170%
4.530%
7.220%
6.510%
4.700%
7.100%
140,000
55,000
145,000
3,689,000
1,676,000
1,135,000
65,000
775,000
210,000
252,583
110,098
800,000
265,000
260,000
70,000
115,000
140,000
45,000
75,000
95,000
72,000
30,000
200,000
30,000
146,000
160,000
152,000
75,000
55,000
220,000
45,000
40,000
90,000
35,000
19.63
3
STATEMENT OF INVESTMENT PORTFOLIO (Continued)
As at June 30, 2011
MATURITY
DATE
Corporate Bonds (Continued)
Health Montreal Collective LP
Hydro One Inc.
Integrated Team Solutions SJHC Partnership
Loblaw Cos Ltd.
Manulife Financial Corp.
National Bank of Canada
Plenary Properties LTAP LP
RBC Capital Trust
Royal Bank of Canada
Scotiabank Capital Trust
Strait Crossing Development Inc.
Teranet Holdings LP
Teranet Holdings LP
Toronto-Dominion Bank
Toronto-Dominion Bank, Tier IIA
TransCanada Pipelines Ltd.
TransCanada Pipelines Ltd.
Winnipeg Airport Authority Inc.
Yellow Media Inc.
15-Oct-32
2-Feb-34
7-Jun-40
30-Sep-49
1-Jun-32
30-Nov-42
9-Jun-34
2-Jun-14
26-May-15
31-Jan-44
30-Jun-18
6-Jun-18
4-Nov-18
15-Jun-20
29-Dec-49
15-Sep-31
17-Dec-40
17-Jun-41
2-Apr-20
30-Oct-04
14-Dec-05
18-Dec-06
9-Dec-30
17-Feb-39
20-Nov-19
2-Feb-15
PRINCIPAL AMOUNT/
RATE
UNITS/FACE VALUE
6.980%
6.470%
5.630%
6.721%
6.930%
5.946%
6.050%
4.896%
4.030%
6.288%
6.821%
5.000%
5.450%
4.350%
6.282%
6.170%
5.754%
6.100%
5.480%
4.970%
4.779%
5.763%
6.500%
8.050%
4.569%
7.300%
AVERAGE
COST ($)
FAIR
VALUE ($)
255,213
44,454
37,962
335,000
96,046
35,247
48,638
75,000
150,284
148,159
25,610
208,478
70,239
422,050
170,723
105,545
135,000
184,919
86,097
60,518
262,037
154,255
20,038
45,959
210,000
35,000
259,220
59,778
41,509
343,740
94,326
36,541
59,187
78,669
151,182
152,005
34,594
215,375
69,360
435,549
166,158
114,572
131,905
190,014
92,451
63,674
267,308
158,902
29,035
58,141
217,986
32,895
207,000
50,000
38,000
335,000
75,000
35,000
60,000
75,000
145,000
140,000
30,000
205,000
65,000
419,000
155,000
117,147
135,000
185,000
85,000
60,000
255,000
145,000
25,000
41,000
210,000
35,000
Total Bonds and Debentures
% OF
TOTAL
5,282,673
5,524,719
10.91
15,141,577
15,466,906
30.54
167,036
149,726
205,024
613,052
303,469
263,301
246,562
177,019
173,033
1,056,018
233,991
138,054
204,180
230,868
253,800
717,518
557,512
405,405
228,939
185,481
177,364
951,548
326,040
203,640
3,726,285
4,442,295
171,448
245,163
240,954
281,974
154,755
212,992
262,291
244,552
709,430
170,430
Equities
Energy
ARC Resources Ltd.
Baytex Energy Corp.
Cameco Corp.
Canadian Natural Resources Ltd.
Cenovus Energy Inc.
EnCana Corp.
Imperial Oil Ltd.
MEG Energy Corp.
Nexen Inc.
Suncor Energy Inc.
Talisman Energy Inc.
Vermilion Energy Inc.
8,177
4,400
10,000
17,800
15,350
13,650
5,100
3,700
8,181
25,240
16,500
4,000
Total Energy
Materials
Agnico-Eagle Mines Ltd.
Agrium Inc.
Barrick Gold Corp.
Goldcorp Inc.
Osisko Mining Corp.
3,502
3,100
5,600
15,250
11,400
4
8.77
As at June 30, 2011
MATURITY
DATE
Materials (Continued)
Potash Corp of Saskatchewan Inc.
Silver Wheaton Corp.
Teck Resources Ltd., Class B
PRINCIPAL AMOUNT/
RATE
UNITS/FACE VALUE
AVERAGE
COST ($)
FAIR
VALUE ($)
12,800
7,000
11,100
200,581
119,278
261,034
703,487
222,740
542,679
1,675,187
3,068,601
6.06
9,200
154,430
262,384
0.52
10,200
3,800
277,709
251,978
785,910
228,190
Total Materials
% OF
TOTAL
Industrials
Capital Goods
Finning International Inc.
Transportation
Canadian National Railway Co.
CP Railway Ltd.
Total Industrials
529,687
1,014,100
2.00
684,117
1,276,484
2.52
205,973
249,365
0.49
Consumer Discretionary
Consumer Services
Tim Hortons Inc.
Media
Shaw Communications Inc., Class B
5,300
15,400
Total Consumer Discretionary
224,631
338,492
0.67
430,604
587,857
1.16
275,453
272,230
0.54
Consumer Staples
Food & Staples Retailing
Loblaw Cos Ltd.
7,000
Food, Beverage & Tobacco
Saputo Inc.
4,400
Total Consumer Staples
162,440
204,160
0.40
437,893
476,390
0.94
652,056
541,939
714,922
817,082
1,032,579
636,044
1,220,777
1,169,454
2,725,999
4,058,854
715,368
273,767
600,540
380,672
989,135
981,212
Financials
Banks
Bank of Nova Scotia
Canadian Imperial Bank of Commerce
Insurance
Power Financial Corp.
Real Estate
Brookfield Asset Management Inc., Class A
Total Financials
17,800
8,358
22,200
14,300
35,264
12,800
14,200
8.02
1.94
338,392
454,258
0.90
4,053,526
5,494,324
10.86
5
As at June 30, 2011
MATURITY
DATE
PRINCIPAL AMOUNT/
RATE
UNITS/FACE VALUE
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
Information Technology
Technology Hardware & Equipment
Research In Motion Ltd.
4,050
Total Information Technology
Telecommunication Services
BCE Inc.
Rogers Communications Inc., Class B
164,618
112,632
0.22
164,618
112,632
0.22
344,989
227,885
404,674
449,698
10,700
11,800
Total Telecommunication Services
Total Equities
Mutual Funds
Sceptre Equity Growth Fund, Class O
Sceptre Global Equity Fund, Class O
23,300
396,295
Total Mutual Funds
Index Funds
iShares MSCI EAFE Index Fund
SPDR S&P 500 ETF Trust
20,000
20,000
Total Index Funds
Total Bonds, Debentures, Equities, Mutual Funds and Index Funds
Transaction costs
572,874
854,372
1.69
11,745,104
16,312,955
32.22
1,798,497
6,035,546
2,908,089
6,580,354
7,834,043
9,488,443
1,150,267
2,488,981
1,161,018
2,547,097
3,639,248
3,708,115
7.32
38,359,972
44,976,419
88.82
(12,539)
Total Investment Portfolio Including Cash and Short-Term Notes
44,003,255
6
18.74
—
50,635,411
100.00
Discussion of Fina ncial Risk Ma na gement a nd F a ir Value Disclosure (Una udited)
Financial Risk Management
The Fund’s financial instruments consist of cash, investments, receivables and payables. As a result, the Fund is exposed to various types of risks that are associated
with its investment strategies, financial instruments and markets in which it invests.The most significant risks include market risk, credit risk and liquidity risk.These
risks and related risk management practices employed by the Fund are discussed below.
The fundamental investment objective of the Sceptre Income and Growth Fund is to achieve over a longer-term investment horizon, the highest possible return
consistent with a fundamental investment philosophy which emphasizes broad diversification across and within all major security classes.The Fund invests primarily
in Canadian equity and fixed-income securities.
Market risk
The Fund’s market risk is affected by three main components: changes in actual market prices, interest rates and foreign currency movements.
(a)
Market price risk
Market price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The investments
of the Fund are subject to normal market fluctuations and the risks inherent in investment in financial markets. The maximum risk resulting from financial
instruments held by the Fund is determined by the fair value of the financial instruments and indirectly through its holdings in underlying Funds. The Manager
moderates this risk through a careful selection of securities within specified limits and the Fund’s market price risk is managed through diversification of the
investment portfolio. The Investment Manager monitors the Fund’s overall market positions on a daily basis and positions are maintained within established ranges.
Utilizing a predicted beta of 0.62 (December 31, 2010 – 0.93), if the S&P/TSX Composite index had increased or decreased by 5% at June 30, 2011, with all other
variables held constant, the Fund’s net assets could have increased or decreased, respectively, by approximately $1,551,519 (December 31, 2010 – $1,556,000). In
practice, the actual results may differ from this sensitivity analysis and the difference could be material.
(b) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or fair values of financial instruments. Interest rate risk arises
when the Fund invests in interest-bearing financial instruments. The Fund is exposed to the risk that the value of such financial instruments will fluctuate due to
changes in the prevailing levels of market interest rates. The Fund’s exposure to interest rate risk is concentrated in its investment in bonds and debentures and
short-term notes, and indirectly in interest-bearing securities held in underlying funds.
The table below summarizes the Fund’s exposure to interest rate risk, categorized by the earlier of contractual re-pricing or maturity dates.
Less
than 1
month
($)
Interest Rate Exposure:
June 30, 2011
December 31, 2010
1,029,381
—
1–3
months
($)
4,043,159
968,484
3 months
– 1 year
($)
—
61,580
1–5
years
($)
7,389,954
7,119,889
More
than
5 years
($)
8,076,951
9,974,544
Total
($)
20,539,445
18,124,497
At June 30, 2011, if market interest rates changed by 25 basis points with all other variables remaining constant, the change in the Fund’s net assets would have been
approximately $264,959 (December 31, 2010 – $266,000). In practice, the actual results may differ from this sensitivity analysis and the difference could be material.
(c)
Currency risk
Currency risk is the risk that the value of investments denominated in currencies other than the functional currency of the Fund, will fluctuate due to changes in
foreign exchange rates. Equities in foreign markets and foreign bonds are exposed to currency risk as the prices denominated in foreign currencies are converted
to the Fund’s functional currency in determining fair value.
The Fund holds assets and liabilities, including cash and cash equivalents that are denominated in currencies other than the Canadian Dollar, the functional currency.
It is therefore exposed to currency risk, as the value of the securities denominated in other currencies fluctuate due to changes in exchange rates. The Fund is
also indirectly exposed to currency risk through its investments in underlying mutual funds which invest in financial instruments that are denominated in a currency
other than the Canadian dollar.
7
Discussion of Fina ncial Risk Ma na gement a nd F a ir Value Disclosure (Una udited) (Continued)
The table below summarizes the Fund’s exposure to currency risks.
June 30, 2011
United States Dollar
Currency Percentage of
Exposure ($)Net Assets (%)
3,814,020
7.53%
December 31, 2010
Currency
Exposure ($)
–
Percentage of
Net Assets (%)
0.00%
As at June 30, 2011, if the exchange rate between the Canadian Dollar and the foreign currencies the Fund is exposed to increased or decreased by 1%, with all
other variables held constant, net assets would have increased or decreased, respectively, by approximately $38,140 (December 31, 2010 – $nil). In practice, actual
results may differ from this sensitivity analysis and the difference could be material.
As at June 30, 2011 and December 31, 2010 other financial assets (including dividend and interest receivable) and financial liabilities that are denominated in foreign
currencies, do not expose the Fund to significant currency risk.
Credit risk
Credit risk is the risk that one party to a financial instrument fails to discharge an obligation and causes financial loss to another party. The Fund is subject to
credit risk from its holdings of bonds, debentures and short-term notes, and indirectly through investments held in underlying Funds. The Fund limits its exposure
to credit loss by investing in securities with high credit quality and by diversifying among a large number of issuers.
The Fund invests in financial assets, which have an investment grade as rated primarily by Dominion Bond Rating Services “DBRS”, Standard & Poor’s “S&P”, and
Moody’s. Ratings for securities, by the higher of the S&P, Moody’s and DBRS ratings, that subject the Portfolio to credit risk at June 30, 2011 and December 31,
2010 are noted below:
As a % of Net Assets
June 30, 2011
December 31, 2010
Rating
AAA
AA
A
BBB
17.10%
11.92%
9.54%
2.01%
40.57%
12.12%
6.58%
13.90%
2.54%
35.14%
All portfolio transactions in securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal as delivery of securities
sold is only made once the broker has received payment. Payment is made on a purchase once the securities are received by the broker. The trade will not settle
if either party fails to meet its obligation.
The Fund may engage in securities lending transactions with counterparties. Credit risk associated with these transactions is considered minimal as: the value of
the collateral must be no less than 102% of the value of the loaned securities (where the amount of collateral is adjusted each trading day to make sure that the
value of the collateral does not go below the 102% minimum level); the collateral to be held may consist only of cash, qualified securities or securities that can
be immediately converted into identical securities to those that are on loan; the Fund cannot loan more than 50% of the total value of its assets through securities
lending transactions; and the Fund’s total exposure to any one borrower in securities, derivative transactions and securities lending will be limited to 10% of the
total value of the Fund’s assets.
Liquidity risk
Liquidity risk is the risk that the Fund will encounter difficulty in raising funds to meet cash-flow commitments associated with financial instruments. The Fund is
exposed to daily cash redemptions of redeemable units. The units of the Fund are redeemed on demand at the current Transactional NAV per unit at the option
of the unitholder. Liquidity risk is managed by investing the majority of the Fund’s assets in investments that are traded in an active market and can be readily
disposed of. In addition, the Fund aims to retain sufficient cash and cash equivalent positions to maintain liquidity.
As at June 30, 2011 and December 31, 2010 the Fund’s investments are considered readily realizable and highly liquid, therefore the Fund’s liquidity risk is
considered minimal.
8
Fair Value Disclosure
The following fair value hierarchy table presents information about the Fund’s assets measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010:
Financial Assets at fair value as at June 30, 2011
(Thousands of dollars)
Equities – Long
Bonds
Short Term Notes
Mutual Funds
Index Funds
Level 1
$
Level 2
16,313
9,540
5,073
9,488
3,708
44,122
$
$
Total
—
5,927
—
—
—
5,927
$
$
16,313
15,467
5,073
9,488
3,708
50,049
$
During the period, there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held.
The Fund’s financial liabilities cash flows are not discounted given they all have maturity dates of less than 3 months. These include management fees payable and other
accrued liabilities.
Financial Assets at fair value as at December 31, 2010
Equities – Long
Bonds
Short Term Notes
Mutual Funds
Level 1
$
$
Level 2
20,614
8,818
968
12,859
43,259
$
$
Total
—
8,338
—
—
8,338
$
$
20,614
17,156
968
12,859
51,597
No Level 3 financial assets were held as at December 31, 2010.
9
S C E P T R E B ON D F U N D
2011
Assets
(at cost $103,744; 2010 – $128,592)
(at cost $23,813; 2010 – $5,082)
Cash
Due from broker
Accrued Interest
$ 104,228
Liabilities
Distributions payable to unitholders
Due to brokers
2010
$
132,339
23,821
510
—
693
5,083
8
4,220
844
129,252
142,494
75
5
16
—
92
26
6
—
4,226
67
188
4,325
$ 129,064
$
138,169
Class A
Class D
Class O
$ 8,606
$
17
$ 120,441
$
$
$
8,900
17
129,252
Net assets per unit
Class A
Class D
Class O
$
$
$
Signed on behalf of
12.70
12.63
11.76
$
$
$
12.66
12.59
11.73
Investment income
Interest
$
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other Expenses
2,467
9
2010
$
3,235
2
2,476
3,237
36
14
42
11
15
18
5
—
35
14
40
10
12
12
4
4
141
131
Net investment income before
2,335
—
3,106
1
2,335
3,107
sale of investments and transaction costs
Unrealized appreciation (depreciation) of
investments and foreign currency
3,970
617
(3,256)
Net gain on investments
Increase in net assets from operations
2,107
714
$
5,831
Increase in net assets from operations per class
Class A
$
140
Class D
$
—
Class O
$ 2,909
$
$
$
318
—
5,513
Increase in net assets from operations per unit
Class A
$
0.21
Class D
$
0.43
Class O
$
0.27
$
$
$
0.45
0.47
0.49
$
2,724
3,049
10
2011
2011
2011
2010
Class A
$
8,900
$
2010
Class D
8,983
140
$
318
17
$
1
—
—
356
(788)
120
482
(1,023)
160
—
—
—
—
—
—
(312)
(381)
—
—
(122)
(163)
—
—
(122)
(163)
—
—
$
8,606
$
8,757
2011
$
$
129,252
$
133,131
$
1
2011
2010
Total Fund
2010
Class O
17
$
138,169
$
142,115
2,909
5,513
3,049
5,831
4,366
(15,982)
2,363
2,222
(10,243)
3,175
4,722
(16,770)
2,483
2,704
(11,266)
3,335
(9,253)
(4,846)
(9,565)
(5,227)
(2,467)
(3,239)
(2,589)
(3,402)
(2,467)
$
120,441
(2,589)
(3,239)
$
130,559
2011
2010
$
129,064
(3,402)
$
2011
Class A
139,317
2010
Class D
Number of Units
703
28
(62)
9
725
38
(81)
13
1
—
—
—
—
—
—
—
678
695
1
—
2011
2010
Class O
Number of Units
11,016
371
(1,348)
201
11,597
190
(875)
272
10,240
11,184
11
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
FACE VALUE
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
509,959
509,959
0.40
18,665,224
18,671,580
14.52
1.56
Short-Term Notes
Treasury Bills
Canada Treasury Bills, with various due dates to
July 08, 2011
0.882% – 1.014%
Financement-Quebec
Promissory Note
Province of British Columbia
Province of Saskatchewan
7-Jul-11
0.998%
2,000,000
1,999,180
1,999,636
6-Jul-11
26-Jul-11
0.999%
0.997%
2,875,000
275,000
2,873,505
274,805
2,874,552
274,805
3,148,310
3,149,357
2.45
23,812,714
23,820,573
18.53
7,154,840
10,720,269
2,622,706
3,177,000
412,707
1,599,296
2,250,658
1,018,501
3,345,599
3,124,860
3,081,687
2,950,448
2,834,557
5,297,000
5,037,699
7,140,973
10,761,683
2,648,529
3,147,836
414,789
1,681,006
2,310,952
1,033,580
3,313,624
3,114,717
3,154,329
2,943,986
2,903,123
5,286,896
5,030,799
54,627,827
54,886,822
Canada Housing Trust No. 1
Canadian Government Bond
Canadian Government Bond
CDP Financial Inc.
McGill University Health Care Centre
Ontario School Boards Financing Corp.
Ontario School Boards Financing Corp.
Province of Nova Scotia
Province of Ontario
Province of Quebec
Province of Quebec
PSP Capital Inc.
PSP Capital Inc.
15-Dec-14
1-Mar-13
1-Jun-16
15-Jul-20
1-Jun-41
31-Dec-43
19-Oct-26
7-Nov-28
18-Jun-40
25-Nov-19
2-Jun-37
1-Dec-18
1-Dec-38
9-Dec-13
12-Mar-15
2.750%
1.750%
2.000%
4.600%
4.000%
5.360%
6.550%
5.800%
4.950%
4.150%
4.700%
4.500%
5.000%
4.570%
2.940%
7,000,000
10,718,000
2,690,000
3,000,000
383,000
1,600,000
1,989,092
939,273
3,000,000
3,000,000
3,000,000
2,750,000
2,665,000
5,000,000
5,000,000
12
42.69
As at June 30, 2011
PRINCIPAL AMOUNT/
Corporate Bonds
Cadillac Fairview Finance Trust
Canadian Western Bank, FRN
CIBC Capital Trust
Consumers Waterheater Operating Trust
Enbridge Pipelines Inc.
Enersource Corp.
GE Capital Canada Funding Co.
Health Montreal Collective LP
Integrated Team Solutions SJHC Partnership
Plenary Properties LTAP LP
RBC Capital Trust
Royal Office Finance LP
Strait Crossing Development Inc.
Scotiabank Capital Trust
TCHC Issuer Trust
Winnipeg Airport Authority Inc.
MATURITY
DATE
COUPON
RATE
FACE VALUE
AVERAGE
COST ($)
FAIR
VALUE ($)
25-Jan-21
30-Nov-20
30-Jun-08
30-Apr-14
6-Apr-20
29-Apr-21
10-Sep-19
15-Feb-16
2-Feb-34
30-Sep-49
30-Nov-42
31-Jan-44
30-Jun-18
12-Nov-32
15-Sep-31
29-Dec-49
11-May-37
14-Dec-05
20-Nov-19
4.310%
4.389%
9.976%
6.750%
4.450%
4.521%
5.680%
4.700%
6.470%
6.721%
5.946%
6.288%
6.821%
5.209%
6.170%
6.282%
4.877%
4.779%
4.569%
3,000,000
2,500,000
3,595,000
6,000,000
1,690,000
3,000,000
3,000,000
2,660,000
1,960,000
3,265,000
275,000
1,150,000
225,000
5,000,000
929,233
1,220,000
2,700,000
2,200,000
1,660,000
3,100,500
2,524,500
4,696,694
6,462,060
1,761,318
3,111,000
3,274,200
2,840,509
2,236,610
3,265,000
276,939
1,217,022
191,609
5,371,743
837,206
1,343,757
2,699,779
2,245,750
1,660,000
3,067,277
2,517,418
4,702,363
6,389,111
1,746,421
3,071,793
3,242,581
2,846,009
2,343,310
3,350,182
287,106
1,248,611
259,455
5,362,984
908,808
1,307,824
2,660,889
2,306,183
1,723,126
49,116,196
49,341,451
38.38
103,744,023
104,228,273
81.07
Transaction costs
% OF
TOTAL
—
—
128,066,696
128,558,805
100.00
13
The fundamental investment objective of the Sceptre Bond Fund is to provide safety of capital and high income primarily through investment in Canadian income
securities. The Fund will primarily invest in short and long-term debt securities issued or guaranteed by federal, provincial, and Municipal governments, as well as
those issued by Canadian companies.
Market risk
Market risk is comprised of three components: market price risk, interest rate risk and foreign currency risk. The Fund’s primary market risk is interest rate risk.
As at June 30, 2011 and December 31, 2010 the Fund is not currently exposed to market price risk as no equities are held in the Fund. As of June 30, 2011 and
December 31, 2010 the Fund is not exposed to currency risk either as all monetary financial instruments are denominated in Canadian dollars.
changes in the prevailing levels of market interest rates. The Fund’s exposure to interest rate risk is concentrated in its investment in bonds and debentures. Other
financial assets and liabilities are short-term in nature and/or non-interest bearing.
The table below summarizes the Fund’s exposure to interest rate risk, categorized by the earlier of contractual re-pricing or maturity dates.
Less
than 1
month
($)
Interest Rate Exposure:
June 30, 2011
December 31, 2010
23,820,573
4,564,301
3 months
– 1 year
($)
—
821,724
1–5
years
($)
40,104,003
57,293,875
More
than
5 years
($)
64,124,272
74,741,979
Total
($)
128,048,848
137,421,879
At June 30, 2011, if market interest rates changed by 25 basis points with all other variables remaining constant, the change in the Fund’s net assets would have
been approximately $1,811,891 (December 31, 2010 – $2,037,000). In practice, the actual results may differ from this sensitivity analysis and the difference could
be material.
Credit risk
credit risk from its holdings of bonds and debentures.The Fund limits its exposure to credit loss by investing in securities with high credit quality and by diversifying
among a large number of issuers.
Moody’s. Ratings for securities, by the higher of the DBRS, S&P, and Moody’s ratings, that subject the Portfolio to credit risk at June 30, 2011 and December 31,
2010, are noted below:
June 30, 2011
December 31, 2010
Rating
AAA
AA
A
BBB
45.96%
21.59%
26.40%
5.25%
99.20%
33.83%
17.61%
39.76%
8.26%
99.46%
All portfolio transactions in securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities
14
Liquidity risk
considered minimal.
Bonds
Short Term Notes
Level 1
$
Level 2
54,887
23,821
78,708
$
$
Total
49,341
—
49,341
$
$
104,228
23,821
128,049
$
Bonds
Short Term Notes
Level 1
$
$
Level 2
67,366
5,083
72,449
$
$
Total
64,973
—
64,973
$
$
132,339
5,083
137,422
15
S C E P T R E H I G H I N CO M E F U N D
2011
Assets
(at cost $62,348; 2010 – $50,537)
(at cost $200; 2010 – $3,247)
Cash
Dividends receivable
$ 67,131
Liabilities
Management fee payable
2010
$
61,555
200
422
354
7
3,251
3
305
11
68,114
65,125
15
50
1
128
16
53
9
90
194
168
$ 67,920
$
64,957
Class A
Class D
Class F
Class O
$ 48,020
$
201
$
631
$ 19,068
$
$
$
$
48,896
68
572
15,421
Net assets per unit
Class A
Class D
Class F
Class O
$
$
$
$
$
$
$
$
15.89
15.73
16.00
16.07
15.96
15.76
16.10
16.30
2011
Investment income
Interest
Dividends
$
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other fees
3
784
9
681
1,505
1,477
351
10
79
17
13
27
2
—
292
7
60
16
11
13
2
14
499
415
1,006
—
1,062
1
1,006
1,063
Transaction costs
Unrealized depreciation of investments and
foreign currency
7,557
(132)
3,265
(132)
(6,238)
(5,364)
1,187
(2,231)
from operations
$
2,193
$
(1,168)
Class A
$ 1,529
$
Class D
$
3
$
Class F
$
18
$
Class O
$
643
$
(941)
(1)
(10)
(216)
Class A
$
0.50
$
Class D
$
0.26
$
Class F
$
0.48
$
Class O
$
0.60
$
(0.30)
(0.39)
(0.28)
(0.21)
16
$
Signed on behalf of
8
39
10
1,448
2010
2011
2011
2010
Class A
$
48,896
$
1,529
2011
2010
2010
Class D
45,509
$
68
Class F
$
58
3
(941)
$
572
$
466
(1)
18
(10)
1,693
(3,941)
1,109
1,012
(3,353)
1,144
144
(14)
5
—
(49)
1
89
(32)
—
1
(13)
—
(1,139)
(1,197)
135
(48)
57
(12)
(1,266)
(1,312)
(5)
(1)
(16)
(13)
(1,266)
(1,312)
(5)
(1)
(16)
(13)
$
48,020
$
42,059
$
201
$
8
2011
$
$
15,421
$
14,535
$
431
2011
2010
Total Fund
2010
Class O
631
$
64,957
$
60,568
643
(216)
2,193
(1,168)
3,573
(489)
364
936
(853)
336
5,499
(4,476)
1,478
1,949
(4,268)
1,481
3,448
419
2,501
(838)
(444)
(427)
(1,731)
(1,753)
(444)
(427)
(1,731)
(1,753)
$
19,068
$
14,311
2011
2010
$
67,920
2011
Class A
Number of Units
3,078
2011
2010
4
4
9
—
—
—
(3)
—
3,140
13
1
2010
2011
73
(240)
82
3,009
56,809
Class D
3,225
105
(242)
68
$
Class F
2010
Class O
Number of Units
36
33
959
5
(2)
—
—
(1)
—
219
(30)
22
39
32
1,170
1,036
67
(61)
24
1,066
17
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
421,957
421,957
0.62
Short-Term Notes
Treasury Bills
Canada Treasury Bills, with various due dates to September 15, 2011
0.881% – 0.902%
199,644
199,634
0.30
199,644
199,634
0.30
2,027,645
1,307,095
1,659,231
1,464,017
2,055,924
678,020
1,695,963
1,194,077
564,261
3,482,030
1,119,890
2,294,443
2,219,481
1,967,277
1,464,533
1,697,608
718,100
2,056,824
1,671,420
631,014
4,162,892
1,624,029
17,248,153
20,507,621
Equities
Energy
ARC Resources Ltd.
Baytex Energy Corp.
Bonavista Energy Corp.
Canadian Oil Sands Ltd.
Penn West Petroleum Ltd.
Provident Energy Ltd.
Crescent Point Energy Corp.
Enbridge Inc.
Trinidad Drilling Ltd.
TransCanada Corp.
91,888
42,300
69,100
52,700
76,400
83,500
46,304
53,400
75,300
98,600
31,900
Total Energy
Materials
Labrador Iron Ore Royalty Corp.
18,800
Total Materials
479,437
727,560
479,437
727,560
30.27
1.07
Industrials
Commercial Services & Supplies
Morneau Shepell Inc.
65,200
Total Industrials
674,220
654,608
674,220
654,608
1,179,857
1,863,329
738,581
2,334,629
1,137,150
1,896,874
658,476
947,520
6,116,396
4,640,020
0.97
Media
Groupe Aeroplan Inc.
Thomson Reuters Corp.
Yellow Media Inc.
Retailing
Reitmans Canada Ltd., Class A
85,500
86,300
18,200
394,800
43,500
6.85
771,565
666,420
0.98
6,887,961
5,306,440
7.83
Consumer Staples
Shoppers Drug Mart Corp.
17,300
645,278
686,810
1.01
645,278
686,810
1.01
18
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
17,100
54,800
40,000
27,400
62,200
26,400
1,284,376
3,278,451
2,298,947
699,796
2,927,995
2,006,426
1,301,310
3,358,144
2,320,400
692,398
3,420,378
2,158,992
12,495,991
13,251,622
19.56
1.34
Financials
Banks
Bank of Montreal
Bank of Nova Scotia
Genworth MI Canada Inc.
Diversified Financials
IGM Financial Inc.
18,000
767,884
909,180
Insurance
Great-West LifeCo Inc.
Industrial Alliance Insurance & Financial Services Inc.
Intact Financial Corp.
Sun Life Financial Inc.
66,900
21,600
14,100
29,600
1,722,977
824,047
723,769
963,817
1,702,605
865,728
770,565
857,512
4,234,610
4,196,410
465,844
676,864
543,953
734,327
748,221
700,520
Real Estate
Northern Property Real Estate Investment Trust
RioCan Real Estate Investment Trust
Canadian Real Estate Investment Trust
24,100
28,900
21,100
Total Financials
BCE Inc.
Bell Aliant Inc.
Manitoba Telecom Services Inc.
TELUS Corp.
90,200
63,800
65,900
84,600
48,100
Utilities
Emera Inc.
Fortis Inc.
Just Energy Group Inc.
Brookfield Renewable Power Fund
62,500
55,600
48,200
31,900
6.20
1,686,661
2,183,068
3.22
19,185,146
20,540,280
30.32
2,799,969
1,730,070
2,048,163
4,026,960
1,697,895
3,411,364
1,831,060
2,149,658
4,289,219
1,833,091
12,303,057
13,514,392
1,962,752
1,637,368
745,855
682,388
1,975,625
1,798,660
684,922
733,700
19.95
Total Utilities
5,028,363
5,192,907
7.66
Total Equities
62,451,615
67,130,618
99.08
Transaction costs
(103,953)
62,969,263
—
67,752,209
100.00
19
The fundamental investment objective of the Sceptre High Income Fund is to provide a high level of income along with moderate capital growth by primarily
investing in a diversified portfolio of Canadian securities, including real estate investment trusts (REITs), income trusts, fixed-income securities and high-yielding
securities.
Market risk
Market risk is comprised of three components: market price risk, interest rate risk and foreign currency risk.
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities and to a limited degree by interest rate risk on
its short-term note investments. As at June 30, 2011 and December 31, 2010 there is no currency risk as all monetary financial instruments held in the Fund are
denominated in Canadian dollars.
(a)
Market price risk
when the Fund invests in interest-bearing financial instruments. Interest rate risk is considered to be minimal in the Fund as its holdings of short-term investments
represent only 0.30% (December 31, 2010 – 5.02%) of the fair value of the Fund at June 30, 2011.
Credit risk
credit risk from its short-term note investments. However, since the short-term notes are Canada Treasury Bills or are guaranteed by the Government of Canada,
and represent only 0.30% (December 31, 2010 – 5.02%) of the fair value of the Fund, credit risk is considered minimal.
All portfolio transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of
securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities are received by the broker. The trade will
not settle if either party fails to meet its obligation.
Liquidity risk
considered minimal.
20
The following fair value hierarchy table presents information about the Fund’s assets measured at fair value on a recurring basis as of June 30, 2011 and
December 31, 2010:
Equities – Long
Short Term Notes
Level 1
$
Level 2
67,131
200
67,331
$
$
Total
—
—
—
$
$
67,131
200
67,331
$
During the period, there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets held.
Equities – Long
Short Term Notes
Level 1
$
$
Level 2
61,555
3,251
64,806
$
$
Total
—
—
—
$
$
61,555
3,251
64,806
During the period, there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets held.
21
S C E P T R E C A NA D I A N E Q U I T Y F U N D
For the six-months period ended June 30 (Unaudited)
2011
Assets
(at cost $108,416; 2010 – $108,746)
(at cost $2,006; 2010 – $3,582)
Cash
$130,111
Liabilities
Cash indebtedness
Management fee payable
2010
$
135,096
2,007
302
—
254
3,583
—
3
237
132,674
138,919
—
39
16
1
114
36
8
20
—
76
170
140
$132,504
$
138,779
2011
Investment income
Interest
Dividends, net of withholding tax
$
$ 17,079
$
1
$
437
$114,987
Net assets per unit
Class A
Class D
Class F
Class O
$
$
$
$
Signed on behalf of
19.97
19.60
20.11
21.14
$
$
$
$
$
$
$
$
18,901
1
514
119,363
20.29
20.00
20.41
21.47
2
107
4
1,283
1,396
131
13
60
11
16
23
5
—
132
12
53
10
13
13
4
8
259
245
1,082
1,151
—
2
1,082
1,153
Realized and unrealized gain (loss)
on investments and transaction costs
Transaction costs
Unrealized depreciation of investments
and foreign currency
2,785
(26)
2,124
(27)
(4,656)
(7,960)
Net loss on investments
(1,897)
(5,863)
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other fees
Decrease in net assets from operations
(815)
$
(4,710)
Decrease in net assets from operations per class
Class A
$
(254)
Class D
$
—
Class F
$
(5)
Class O
$
(556)
$
$
$
$
(821)
—
(18)
(3,871)
Class A
$ (0.28)
$
Class D
$ (0.41)
$
Class F
$ (0.22)
$
Class O
$ (0.10)
$
(0.73)
0.12
(0.72)
(0.62)
22
$
1,341
Class A
Class D
Class F
Class O
2
—
3
1,336
2010
$
2011
2011
2010
Class A
$
18,901
$
2011
2010
2010
Class D
20,815
$
1
Class F
$
46
$
514
$
447
(254)
(821)
—
—
(5)
(18)
381
(1,949)
—
444
(2,453)
32
—
—
—
—
(45)
—
18
(90)
—
9
(53)
1
(1,568)
(1,977)
—
(45)
(72)
(43)
—
(33)
—
—
—
(1)
—
(33)
—
—
—
(1)
$
17,079
$
17,984
$
1
$
1
2011
$
$
119,363
$
119,129
$
385
2011
2010
Total Fund
2010
Class O
437
$
138,779
$
140,437
(556)
(3,871)
(815)
(4,710)
3,534
(7,317)
1,005
1,381
(8,821)
1,230
3,933
(9,356)
1,005
1,834
(11,372)
1,263
(2,778)
(6,210)
(4,418)
(8,275)
(1,042)
(1,271)
(1,042)
(1,305)
(1,042)
(1,271)
(1,042)
(1,305)
$
114,987
$
107,777
2011
2010
$
132,504
2011
Class A
Number of Units
932
18
(95)
—
855
126,147
2010
Class D
—
3
—
—
—
—
(3)
—
1,067
—
—
2010
2011
1,179
25
(139)
2
2011
$
Class F
2010
Class O
Number of Units
25
25
1
(4)
—
1
(3)
—
22
23
5,560
166
(334)
47
5,439
6,381
75
(467)
69
6,058
23
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
302,237
302,043
0.23
2,006,116
2,006,760
1.52
946,050
1,077,838
1,574,303
3,745,124
3,413,819
3,265,067
1,734,672
1,285,491
1,604,136
29,492
6,943,482
2,116,971
956,764
1,411,729
1,600,335
1,431,432
4,978,285
3,755,488
2,765,070
1,746,221
1,358,523
1,274,134
—
6,671,392
2,231,497
1,435,662
28,693,209
30,659,768
1,516,131
1,699,329
1,643,788
—
3,489,884
1,070,244
2,241,030
814,049
2,389,635
1,496,172
1,793,732
1,602,689
575
4,955,543
1,179,555
4,523,208
1,540,088
3,744,974
14,864,090
20,836,536
15.74
1.23
Short-Term Notes
Treasury Bills
0.891% – 0.902%
Equities
Energy
ARC Resources Ltd.
Baytex Energy Corp.
Cameco Corp.
Cenovus Energy Inc.
EnCana Corp.
Imperial Oil Ltd.
MEG Energy Corp.
Nexen Inc.
Pacific Energy Resources Ltd.
Suncor Energy Inc.
56,537
30,500
56,400
123,500
103,400
93,100
38,900
27,100
58,770
45,176
176,960
112,930
28,200
Total Energy
Materials
Agnico-Eagle Mines Ltd.
Agrium Inc.
Barrick Gold Corp.
Geovic Mining Corp., Warrants (27 Apr 12)
Goldcorp Inc.
Osisko Mining Corp.
Potash Corp. of Saskatchewan Inc.
Teck Cominco Ltd., Class B
24,600
21,200
36,700
115,000
106,525
78,900
82,300
48,400
76,600
Total Materials
23.15
Industrials
Capital Goods
Finning International Inc.
57,300
962,344
1,634,196
Transportation
Canadian Pacific Railway Ltd.
70,700
26,900
3,256,138
1,670,728
5,447,434
1,615,345
Total Industrials
4,926,866
7,062,779
5.33
5,889,210
8,696,975
6.56
1,497,153
1,999,625
1.50
Consumer Services
Tim Hortons Inc.
42,500
24
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
Media
110,600
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
2,107,672
2,430,988
1.84
3,604,825
4,430,613
3.34
1,331,623
1,318,371
1.00
Consumer Staples
Loblaw Cos Ltd.
33,900
Food Beverage & Tobacco
Saputo Inc.
30,500
999,325
1,415,200
1.07
2,330,948
2,733,571
2.07
5,652,273
3,744,032
6,874,841
6,578,444
7,088,822
4,343,636
8,385,975
8,055,330
22,849,590
27,873,763
6,537,227
2,725,090
4,122,539
2,403,960
9,262,317
6,526,499
Financials
Banks
Bank of Nova Scotia
122,200
57,078
152,500
98,500
Insurance
Power Corp. of Canada
242,075
89,700
Real Estate
106,500
Total Financials
21.05
4.93
2,898,415
3,406,935
2.57
35,010,322
37,807,197
28.55
27,500
BCE Inc.
66,100
79,900
Total Equities
Mutual Funds
Sceptre Equity Growth Fund, Class O
149,318
Total Mutual Funds
Total Equities and Mutual Funds
Transaction costs
1,451,168
764,775
1,451,168
764,775
2,096,163
1,863,283
2,499,902
3,044,989
3,959,446
5,544,891
4.19
95,803,218
111,474,326
84.18
12,698,497
18,636,775
12,698,497
18,636,775
14.07
108,501,715
130,111,101
98.25
(85,670)
0.58
110,724,398
—
132,419,904
100.00
25
The fundamental investment objective of the Sceptre Canadian Equity Fund is to achieve over the longer term the highest possible return that is consistent with
a conservative investment philosophy encompassing a diversified portfolio approach. The Fund invests primarily in equity securities of large and medium sized
Canadian companies with a focus on high quality, solid companies with financial strength and growth prospects.
Market risk
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities, and to a limited degree by interest rate risk on
its short-term note investments. As at June 30, 2011 and December 31, 2010 there is no currency risk as all monetary financial instruments held in the Fund are
(a)
Market price risk
Credit risk
and represent only 1.52% (December 31, 2010 – 2.58%) of the fair value of the Fund, credit risk is considered minimal.
Liquidity risk
As of June 30, 2011 and December 31, 2010 the Fund’s investments are considered readily realizable and highly liquid, therefore the Fund’s liquidity risk is
considered minimal.
26
December 31, 2010:
Equities – Long
Mutual Funds
Short Term Notes
Warrants
Level 1
$
Level 2
111,473
18,637
2,007
1
132,118
$
$
Total
—
—
—
—
—
$
$
111,473
18,637
2,007
1
132,118
$
Equities – Long
Mutual Funds
Short Term Notes
Warrants
Level 1
$
$
Level 2
115,364
19,730
3,583
2
138,679
$
$
Total
—
—
—
—
—
$
$
115,364
19,730
3,583
2
138,679
During the period there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held.
27
S C E P T R E E Q U I T Y G R OW T H F U N D
2011
Assets
(at cost $400,955; 2010 – $374,319)
(at cost $3,867; 2010 – $2,135)
Due from brokers
$497,020
Liabilities
Bank indebtedness
Due to brokers
2010
$
545,400
3,868
4,785
768
10
2,136
131
840
253
506,451
548,760
185
3,005
205
376
749
14
1,732
437
487
468
4,520
3,138
$501,931
$
545,622
Class A
Class D
Class F
Class O
$418,581
353
$
$ 2,528
$ 80,469
$
$
$
$
455,624
464
2,198
87,336
Net assets per unit
Class A
Class D
Class F
Class O
$
$
$
$
114.54
110.91
116.22
124.44
$
$
$
$
118.62
115.31
120.17
127.85
Investment income
Interest
Dividends
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other fees
Signed on behalf of
Net investment income (loss)
$
77
397
93
3,109
2010
$
14
1,381
61
1,897
3,676
3,353
3,127
59
484
28
31
118
16
—
2,502
57
452
27
18
13
14
117
3,863
3,200
(187)
153
—
1
(187)
154
Transaction costs
Unrealized depreciation of investments
and foreign currency
59,621
(1,176)
35,136
(1,246)
(75,016)
(36,107)
(16,571)
(2,217)
$ (16,758)
$
(2,063)
Class A
$ (14,611)
$
Class D
$
(9)
$
Class F
$
(103)
$
Class O
$ (2,035)
$
(2,317)
(14)
(21)
289
Class A
$ (3.90)
$
Class D
$ (2.59)
$
Class F
$ (5.02)
$
Class O
$ (3.06)
$
(0.56)
(5.93)
(1.15)
0.39
28
2011
2011
2011
2010
Class A
$ 455,624
$
375,001
$
464
(14,611)
(2,317)
(9)
9,447
(31,879)
8,544
(24,125)
25
(127)
(22,432)
$ 418,581
357,103
$
66
$
353
$
87,336
(2,035)
1,035
(5,867)
237
—
864
(431)
212
(259)
289
73,335
433
$
80,469
$
881
(6,996)
67,509
2011
2010
$
545,622
$
1,581
$
450,051
(16,758)
(2,063)
11,371
(38,304)
9,874
(31,380)
(26,933)
(6,115)
$
(47)
2,528
2011
2010
Total Fund
289
(4,832)
$
1,649
(21)
2010
$
$
(103)
Class O
$
2,198
(14)
237
$
2011
2010
Class F
(102)
(15,581)
$
2011
2010
Class D
501,931
(21,506)
$
2011
Class A
426,482
2010
Class D
Number of Units
3,841
78
(265)
4,233
93
(263)
4
—
(1)
1
2
—
3,654
4,063
3
3
2010
2011
2011
Class F
2010
Class O
Number of Units
18
7
(3)
18
2
(2)
683
8
(44)
780
9
(71)
22
18
647
718
29
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES
AVERAGE
COST ($)
(184,968)
Cash
FAIR
VALUE ($)
(184,968)
% OF
TOTAL
(0.04)
Short-Term Notes
Treasury Bills
0.902% – 0.929%
3,867,464
3,868,166
2,064,283
3,331,023
5,629,484
5,212,357
6,715,410
5,733,046
6,978,213
2,561,189
5,871,945
6,977,932
1,653,383
7,425,210
7,602,486
4,814,695
2,072,112
3,914,429
1,556,821
2,639,828
3,966,476
3,917,530
4,567,672
2,097,000
5,032,230
6,419,106
6,541,056
9,782,175
11,675,583
19,313,253
2,693,848
5,690,097
11,027,356
1,983,536
6
11,019,688
4,098,388
2,904,336
5,304,070
1,991,907
2,536,380
3,789,681
2,930,862
5,689,740
95,205,524
122,520,298
14,632,373
1,837,486
3,819,945
6,950,289
3,659,845
6,417,819
7,450,833
1,115,376
3,852,865
2,857,286
14,995,282
5,415,806
3,462,760
9,880,381
3,456,921
2,775,806
13,746,985
2,776,599
3,603,880
8,048,160
3,452,190
7,344,725
7,886,079
1,708,704
4,516,200
1,387,600
13,095,219
6,483,861
2,794,942
8,292,912
2,246,387
2,636,847
0.77
Equities
Energy
Angle Energy Inc.
Birchcliff Energy Ltd.
BlackPearl Resources Inc.
Bonterra Energy Corp.
Calfrac Well Services Ltd.
Canadian Energy Services & Technology Corp.
Celtic Exploration Ltd.
Cequence Energy Ltd.
Crew Energy Inc.
Keyera Corp.
Legacy Oil + Gas Inc.
Pacific Energy Resources Ltd.
Painted Pony Petroleum Ltd., Class A
Paramount Resources Ltd., Class A
Pinecrest Energy Inc.
Secure Energy Services Inc.
Southern Pacific Resource Corp.
Transglobe Energy Corp.
Trilogy Energy Corp.
Twin Butte Energy Ltd.
Wild Stream Exploration Inc.
209,700
386,500
942,600
115,200
308,100
375,300
906,300
811,400
380,100
252,400
169,533
6,042,978
989,200
148,600
1,195,200
555,400
1,301,900
231,000
159,700
1,211,100
499,100
Total Energy
Materials
Alacer Gold Corp.
Alamos Gold Inc.
Anvil Mining Ltd.
B2Gold Corp.
Capstone Mining Corp.
CCL Industries Inc., Class B
Copper Mountain Mining Corp.
Detour Gold Corp.
Dundee Precious Metals Inc.
Eastern Platinum Ltd.
First Majestic Silver Corp.
Fortress Paper Ltd., Class A
Goldgroup Mining Inc.
Grande Cache Coal Corp.
Guyana Goldfields Inc.
Harry Winston Diamond Corp.
1,707,700
174,300
590,800
2,484,000
967,000
222,500
1,055,700
61,200
579,000
1,734,500
736,100
177,300
2,473,400
945,600
328,900
164,700
30
24.47
As at June 30, 2011
PRINCIPAL AMOUNT/
Materials (Continued)
Keegan Resources Inc.
Labrador Iron Mines Holdings Ltd.
Major Drilling Group International
Mercator Minerals Ltd.
Migao Corp.
Neo Material Technologies Inc.
Rubicon Minerals Corp.
SEMAFO Inc.
Sulliden Gold Corp Ltd.
Tahoe Resources Inc.
Trelawney Mining and Exploration Inc.
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
627,700
468,200
923,100
677,200
763,500
318,600
476,300
682,200
2,611,900
206,000
1,682,900
4,800,545
5,015,136
8,493,394
2,611,148
5,831,903
2,583,709
2,658,380
1,353,944
4,252,921
2,307,844
4,734,257
4,695,196
5,735,450
11,538,750
1,936,792
3,389,940
2,950,236
1,628,946
5,020,992
4,492,468
3,689,460
7,404,760
137,224,254
142,504,280
5,511,782
8,839,067
4,070,528
8,161,560
8,706,220
3,664,878
18,421,377
20,532,658
6,739,164
9,198,968
1,756,906
5,392,200
2,591,380
9,283,252
10,039,200
1,889,734
6,118,728
2,275,182
25,678,618
29,606,096
Total Materials
% OF
TOTAL
28.46
Industrials
Capital Goods
AG Growth International Inc.
Genivar Inc.
Russel Metals Inc.
Black Diamond Group Ltd.
Progressive Waste Solutions
Swisher Hygiene Inc.
Swisher Hygiene Inc., Private
The Churchill Corp., Class A
Transportation
TransForce Inc.
178,200
338,500
149,100
294,800
418,300
350,600
1,135,200
138,900
701,000
Total Industrials
4.10
5.91
7,965,237
10,472,940
2.10
52,065,232
60,611,694
12.11
Automobiles & Components
Linamar Corp.
431,000
8,484,633
9,331,150
1.86
Consumer Services
Transat AT Inc., Class B
133,200
1,842,857
1,499,832
0.30
Media
Cineplex Inc.
404,900
7,641,055
10,774,389
2.15
31
As at June 30, 2011
PRINCIPAL AMOUNT/
Retailing
Dollarama Inc.
Reitmans Canada Ltd., Class A
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
200,800
121,000
4,185,469
1,224,334
6,546,080
1,853,720
% OF
TOTAL
5,409,803
8,399,800
1.68
23,378,348
30,005,171
5.99
3,695,651
5,509,984
4,840,080
6,252,024
9,205,635
11,092,104
Consumer Staples
Alliance Grain Traders Income Fund
The North West Co., Inc.
187,600
309,200
2.22
Health Care
Health Care Equipment & Services
Paladin Labs Inc.
197,000
Total Health Care
4,888,341
7,931,220
4,888,341
7,931,220
12,671,319
10,893,182
17,792,071
16,135,320
23,564,501
33,927,391
6.78
3.72
1.58
Financials
Banks
Canadian Western Bank
Home Capital Group Inc.
578,040
312,700
Dundee Corp., Class A
736,700
7,812,048
18,645,877
Real Estate
Northern Property Real Estate Investment Trust
Dundee Real Estate Investment Trust
FirstService Corp.
Melcor Developments Ltd.
Primaris Retail Real Estate Investment Trust
361,100
371,641
313,100
416,400
376,500
6,825,277
10,244,890
6,341,357
2,272,555
7,809,171
11,002,717
12,044,885
10,426,230
6,412,560
7,910,265
Total Financials
33,493,250
47,796,657
9.55
64,869,799
100,369,925
20.05
1,654,928
5,422,889
1,682,220
10,920,087
7,077,817
12,602,307
Software & Services
The Descartes Systems Group Inc.
MacDonald Dettwiler & Associates Ltd.
243,800
200,700
32
2.52
As at June 30, 2011
PRINCIPAL AMOUNT/
Semiconductor & Semiconductor Equipment
Evertz Technologies Ltd.
Mosaid Technologies Inc.
Total Equities
Transaction costs
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
145,100
268,100
2,214,964
5,696,788
1,900,810
7,482,671
7,911,752
9,383,481
1.87
14,989,569
21,985,788
4.39
401,826,702
497,020,480
99.27
(871,337)
% OF
TOTAL
404,637,861
—
500,703,678
100.00
33
The fundamental investment objective of the Sceptre Equity Growth Fund is to achieve over the longer term the highest possible return that is consistent with
a fundamental investment philosophy. The Fund invests primarily in Canadian equity securities issued by Canadian companies, with a significant bias toward small
to medium capitalization stocks.
Market risk
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities, and to a limited degree by interest rate risk on
its short-term note investments.
(a)
Market price risk
instruments held by the Fund is determined by the fair value of the financial instruments. The Manager moderates this risk through a careful selection of securities
within specified limits and the Fund’s market price risk is managed through diversification of the investment portfolio.The Investment Manager monitors the Fund’s
overall market positions on a daily basis and positions are maintained within established ranges.
variables held constant, the Fund’s net assets could have increased or decreased, respectively, by approximately $25,044,400 (December 31, 2010 – $34,633,000).
In practice, the actual results may differ from this sensitivity analysis and the difference could be material.
(b) Currency risk
Currency risk is the risk that the value of financial instruments, denominated in currencies other than the functional currency of the Fund, will fluctuate due to
changes in foreign exchange rates. There was nil foreign currency risk in the year as there were no financial instruments denominated in currencies other than
the Canadian dollar (December 31, 2010 – nil) of the fair value of the Fund and therefore, currency risk is considered minimal.
Credit risk
and represent less than 0.77% (December 31, 2010 – 0.39%) of the fair value of the Fund, credit risk is considered minimal.
34
Liquidity risk
considered minimal.
December 31, 2010:
Equities – Long
Short Term Notes
$
$
Level 1
490,902
3,868
494,770
$
$
Level 2
6,119
—
6,119
Level 3
$
—
—
—
$
$
$
Total
497,021
3,868
500,889
During the period, there were no significant transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held.
Equities – Long
Mortgaged Backed Securities
$
$
Level 1
545,400
2,136
547,536
Level 2
$
$
Level 3
—
—
—
$
$
—
—
—
$
$
Total
545,400
2,136
547,536
During the period, there were no significant transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held.
35
S C E P T R E LA R G E C A P C A NA D I A N E Q U I T Y F U N D
For the six months ended June 30 (Unaudited)
2011
Assets
Investments at fair value (at cost $26,491;
2010 – $26,993)
Short-term investments (at cost $848;
2010 – $304)
Cash
$
Liabilities
38,254
2010
$
38,748
849
46
124
—
305
32
121
—
39,273
39,206
1
45
—
34
46
34
$
39,227
$
39,172
Net assets per unit
$
19.20
$
19.27
2011
Investment income
$
Interest
Dividends, net of withholding tax ($nil; 2010 – $nil)
1
20
469
2
492
5
16
8
8
12
1
3
14
7
7
12
1
50
44
461
448
Realized gain (loss) on sale of investments
Transaction costs
Unrealized appreciation (depreciation)
of investments and foreign currency
(187)
(2)
1,047
(6)
(181)
Expenses
Custodian fees
Audit fees
Legal fees
Administration fees
8
(3,008)
(1,967)
from operations
$
280
$
(1,519)
from operations per unit
$
0.14
$
(0.66)
36
$
511
Signed on behalf of
(2)
—
511
2
2010
For the six months ended June 30 (Unaudited)
2011
$
39,172
2010
$
280
(1,519)
914
(1,129)
452
41,477
1,385
(3,966)
481
237
(2,100)
(462)
(491)
(462)
(491)
$
39,227
$
37,367
2011
2010
Number of Units
2,032
46
(58)
23
2,397
80
(233)
28
2,043
2,272
37
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
46,518
46,464
0.12
848,246
849,067
2.17
559,547
381,981
687,569
1,170,971
788,973
392,542
606,160
301,415
206,595
1,414,166
465,145
557,046
420,454
524,994
529,947
436,536
1,455,191
1,478,224
518,781
929,610
982,820
317,947
2,220,530
492,024
1,173,716
539,646
7,952,564
11,599,966
750,351
434,812
1,015,693
168,842
1,146,874
501,598
805,479
723,758
547,048
1,600,288
174,915
1,665,288
582,306
919,132
4,823,649
6,212,735
Cash
Short-Term Notes
Treasury Bills
0.872% – 0.940%
Equities
Energy
ARC Resources Ltd.
Baytex Energy Corp.
Cameco Corp.
Cenovus Energy Inc.
Crescent Point Energy Corp.
EnCana Corp.
Enbridge Inc.
Niko Resources Ltd.
Suncor Energy Inc.
TransCanada Corp.
21,025
10,100
17,200
36,100
40,700
11,679
31,300
31,400
5,300
58,900
24,900
27,800
10,600
Total Energy
Materials
Agnico Eagle Mines Ltd.
Franco Nevada Corp.
Goldcorp Inc.
Osisko Mining Corp.
Potash Corp.of Saskatchewan Inc.
Teck Cominco Ltd., Class B
11,900
15,200
34,400
11,700
30,300
18,300
18,800
Total Materials
29.63
15.87
Industrials
Transportation
30,200
Total Industrials
944,004
2,326,910
944,004
2,326,910
5.94
Consumer Services
Tim Hortons Inc.
11,100
427,388
522,255
1.33
Media
50,100
984,287
1,101,198
2.81
7,200
285,961
453,960
1.16
1,697,636
2,077,413
5.30
Retailing
Canadian Tire Corp. Ltd., Class A
38
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
1,177,987
1,161,672
364,875
1,482,124
1,531,415
5,718,073
2,529,236
1,543,232
640,666
2,952,962
2,592,426
10,258,522
26.21
895,752
813,596
1,709,348
669,769
1,070,640
1,740,409
4.45
606,818
905,317
2.31
8,034,239
12,904,248
32.97
Financials
Banks
Bank of Nova Scotia
43,600
20,279
8,200
53,700
31,700
Insurance
Power Financial Corp.
39,329
36,000
Real Estate
28,300
Total Financials
10,800
BCE Inc.
44,549
30,100
Total Equities
Transaction costs
941,086
300,348
941,086
300,348
1,390,916
725,703
1,684,843
1,147,111
2,116,619
2,831,954
7.23
26,509,797
38,253,574
97.71
(18,793)
0.77
27,385,768
—
39,149,105
100.00
39
The Fundamental investment objective of the Sceptre Large Cap Canadian Equity Fund is to achieve long-term growth through capital gains and dividend income.
The Fund Invests primarily in equity securities of large and medium-sized companies based in Canada.
Market risk
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities and to a limited degree by interest rate risk on
its short-term note investments. As at June 30, 2011 and December 31, 2010 there is no currency risk as all financial instruments held in the Fund are
(a)
Market price risk
Credit risk
credit risk from its short-term note investments. However, since the short-term notes are Canada Treasury Bills, and represent only 2.17% (December 31, 2010
– 0.78%) of the fair value of the Fund, credit risk is considered minimal.
Liquidity risk
considered minimal.
40
Equities – Long
Short Term Notes
Level 1
$
Level 2
38,254
849
39,103
$
$
Total
—
—
—
$
$
38,254
849
39,103
$
Equities – Long
Short Term Notes
Warrants
Level 1
$
$
Level 2
38,745
305
3
39,053
$
$
Total
—
—
—
—
$
$
38,745
305
3
39,053
41
S C E P T R E U. S . E Q U I T Y F U N D
2011
Assets
2010 – $14,382)
2010 – $279)
Cash
$
Liabilities
18,570
2010
$
15,310
245
112
18
15
279
13
16
—
18,960
15,618
7
28
—
22
35
22
$
18,925
$
15,596
Net assets per unit
$
10.84
$
10.13
Signed on behalf of
Investment income
Interest
$
3
117
2010
$
—
58
120
58
Expenses
Custodian fees
Audit fees
Legal fees
Administration fees
10
8
7
10
12
—
8
10
6
7
11
—
47
42
Net investment income before waived/absorbed expenses
73
16
—
13
Net investment income (loss)
73
29
128
(11)
(4)
11
—
(3)
Realized loss on foreign exchange
Transaction costs
1,051
(758)
1,164
(750)
from operations
$
1,237
$
(721)
from operations per unit
$
0.73
$
(0.60)
42
2011
STATEMENT OF CHANGES IN NET ASSETS
2011
$
15,596
2010
$
11,066
1,237
(721)
2,843
(749)
72
1,187
(773)
55
2,166
469
(74)
(56)
(74)
$
18,925
(56)
$
10,758
2011
2010
Number of Units
1,540
271
(72)
7
1,165
127
(81)
6
1,746
1,217
43
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
112,591
112,226
0.59
121,985
120,622
0.64
Short-Term Notes
Province of Quebec
Treasury Bills
Canada Treasury Bills
23-Sep-11
0.129%
125,000
1-Sep-11
0.881%
125,000
124,794
124,800
0.67
246,779
245,422
1.31
524,999
566,609
277,076
595,178
692,690
341,680
1,368,684
1,629,548
257,612
241,396
271,917
271,879
499,008
543,796
2.87
544,396
344,384
314,170
376,356
638,354
2,217,660
558,276
403,936
459,676
481,018
725,998
2,628,904
13.89
372,453
402,158
2.12
2,590,113
3,031,062
16.01
251,568
369,585
621,153
333,174
390,649
723,823
3.82
271,428
382,325
324,137
641,262
299,153
1,918,305
260,421
373,442
230,254
719,483
451,822
2,035,422
10.75
2,539,458
2,759,245
14.57
Equities
Energy
Apache Corp.
Occidental Petroleum Corp.
Schlumberger Ltd.
5,000
6,900
4,100
Total Energy
Materials
Ecolab Inc.
Praxair Inc.
5,000
2,600
Total Materials
8.61
Industrials
Capital Goods
3M Co.
Danaher Corp.
Graco Inc.
Middleby Corp.
United Technologies Corp.
IHS Inc., Class A
6,100
7,900
9,400
5,300
8,500
5,000
Total Industrials
Consumer Durables & Apparel
Coach Inc.
NIKE Inc., Class B
Retailing
JOS A Bank Clothiers Inc.
Lowes Cos Inc.
Staples Inc.
TJX Cos Inc.
Tractor Supply Co.
5,400
4,500
5,400
16,600
15,100
14,200
7,000
44
As at June 30, 2011
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
19,500
584,496
586,980
3.10
7,300
8,600
316,871
558,284
875,155
349,021
584,145
933,166
4.93
501,397
531,283
2.81
1,961,048
2,051,429
10.84
443,264
473,886
488,955
1,406,105
465,658
632,328
520,190
1,618,176
8.55
Consumer Staples
Sysco Corp.
McCormick & Co Inc.
PepsiCo Inc.
Household & Personal Products
Colgate-Palmolive Co.
6,300
Health Care
Becton Dickinson and Co.
UnitedHealth Group Inc.
Varian Medical Systems Inc.
5,600
12,700
7,700
Pharmaceuticals, Biotechnology & Life Sciences
Johnson & Johnson
11,700
Total Health Care
736,032
750,446
3.96
2,142,137
2,368,622
12.51
579,731
620,693
1,200,424
508,937
630,019
1,138,956
6.02
671,173
638,831
285,326
1,595,330
760,134
880,649
257,049
1,897,832
10.03
2,795,754
3,036,788
16.05
668,211
653,005
453,438
313,072
371,142
842,717
611,790
603,102
387,344
462,629
2,458,868
2,907,582
Financials
Banks
Wells Fargo & Co.
US BanCorp.
Franklin Resources Inc.
Moodys Corp.
The Bank of New York Mellon Corp.
18,800
25,600
6,000
23,800
10,400
Total Financials
Software & Services
MasterCard Inc., Class A
Microsoft Corp.
Oracle Corp.
Quality Systems Inc.
Solera Holdings Inc.
2,900
24,400
19,000
4,600
8,100
15.36
45
As at June 30, 2011
Miscellaneous
SPDR S&P 500 ETF Trust
Total Miscellaneous
Total Equities
Transaction costs
PRINCIPAL AMOUNT/
NUMBER OF SHARES/
UNITS
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
1,900
246,006
241,974
1.28
246,006
241,974
1.28
16,601,076
18,570,046
98.10
(11,158)
16,949,288
46
—
18,927,694
100.00
The fundamental investment objective of the Sceptre U.S. Equity Fund is to achieve over the longer term the highest possible return that is consistent with a
fundamental investment philosophy through investment primarily in U.S. equity securities, to provide long-term capital appreciation through a portfolio of broadly
diversified securities, by industry, invested primarily in the U.S. market.
Market risk
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities, foreign currency movements, and to a limited
degree by interest rate risk on its short-term note investments.
(a)
Market price risk
variables held constant, the Fund’s net assets could have increased or decreased, respectively, by approximately $870,194 (December 31, 2010 – $327,516) In
(b) Currency risk
Currency risk is the risk that the value of investments denominated in currencies other than the functional currency of the Fund, will fluctuate due to changes in
also indirectly exposed to currency risk through its investments in underlying mutual funds which invest in financial instruments that are denominated in a currency
June 30, 2011
18,736,760
99.01%
December 31, 2010
Currency
Exposure ($)
15,311,857
Percentage of
Net Assets (%)
98.18%
other variables held constant, the Fund’s net assets would have increased or decreased, respectively, by approximately $187,368 (December 31, 2010 – $153,000).
In practice, actual results may differ from this sensitivity analysis and the difference could be material.
(c)
Interest rate risk
47
Credit risk
credit risk from its short-term note investments. However, since the short-term notes are Canada Treasury Bills, and represent only 1.31% (December 31, 2010
– 1.79%) of the fair value of the Fund, credit risk is considered minimal.
Liquidity risk
considered minimal.
Equities – Long
Short Term Notes
Level 1
$
Level 2
18,570
246
18,816
$
$
Total
—
—
—
$
$
18,570
246
18,816
$
During the period, there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held during the period.
Equities – Long
Short Term Notes
Level 1
$
$
Level 2
15,310
279
15,589
$
$
Total
—
—
—
$
$
15,310
279
15,589
During the period, there were no transfers of investments between Level 1 and Level 2, and no Level 3 financial assets were held during the period.
48
S C E P T R E G LO BA L E Q U I T Y F U N D
2011
Assets
2010 – $36,034)
2010 – $900)
Cash
Other receivables
$
Liabilities
$
38,007
2010
$
37,732
388
35
78
52
897
52
22
14
38,560
38,717
9
6
3
64
8
7
—
54
82
69
38,478
$
38,648
2011
Investment income
$
Interest
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other Expenses
$
$
$
Net assets per unit
Class A
Class D
Class O
$
$
$
4,523
7
33,948
14.39
14.26
16.59
$
$
$
$
$
$
4,302
1
34,345
13,63
13.54
15.64
$
65
3
243
499
311
42
10
31
13
11
13
1
—
40
7
38
12
10
13
1
5
121
126
378
185
—
15
378
200
Realized gain (loss) on sale of investments
Transaction costs
187
(13)
(705)
(9)
2,000
(2,049)
2,174
(2,763)
Net investment income before waived/absorbed expenses
Class A
Class D
Class O
1
6
492
2010
Signed on behalf of
from operations
$
(2,563)
Class A
$
233
$
Class D
$
1
$
Class O
$
2,318
$
(453)
—
(2,110)
Class A
$
0.76
$
Class D
$
1.29
$
Class O
$
1.08
$
(1.32)
(1.31)
(1.30)
$
2,552
49
2011
2011
2010
2010
Class A
$
$
4,302
$
Class D
4,696
$
1
(453)
1
—
286
(298)
—
84
(310)
—
5
—
—
—
—
—
(12)
(226)
5
—
4,523
$
4,017
$
7
$
1
2011
2010
Total Fund
2010
Class O
$
$
233
2011
1
34,345
24,852
2,318
(2,110)
2,552
(2,563)
4,077
(6,787)
326
582
(1,845)
256
4,368
(7,085)
326
666
(2,155)
256
(2,384)
(1,007)
(2,391)
(1,233)
(331)
(261)
(331)
(261)
(331)
(261)
(331)
(261)
$
33,948
21,474
2011
2010
$
$
38,648
$
38,478
$
2011
Class A
29,549
25,492
2010
Class D
Number of Units
316
20
(21)
—
354
7
(24)
—
—
—
—
—
—
—
—
—
315
337
—
—
2011
2010
Class O
Number of Units
2,195
254
(423)
20
1,656
40
(125)
19
2,046
1,590
50
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
34,738
34,571
0.09
49,903
49,902
0.13
Cash
Short-Term Notes
Treasury Bills
Canadian Treasury Bill
15-Sep-11
0.910%
50,000
Province of Ontario
22-Sep-11
0.102%
350,000
339,576
337,742
0.88
389,479
387,644
1.01
779,604
921,084
944,828
304,669
880,864
915,144
1,124,367
383,348
2,950,185
3,303,723
26,839
1,087,470
27,660
1,161,733
1,114,309
1,189,393
3.10
842,954
851,491
542,315
392,477
475,967
250,239
1,153,061
1,023,943
5,532,447
860,294
975,355
660,806
577,040
617,156
264,738
1,217,078
1,170,138
6,342,605
16.50
Equities
Energy
Apache Corp.
BG Group PLC
Occidental Petroleum Corp.
Schlumberger Ltd.
7,400
41,800
11,200
4,600
Total Energy
Materials
Air Liquide SA
Air Liquide SA
200
8,400
Total Materials
8.60
Industrials
Capital Goods
3M Co.
FANUC Corp.
Geberit AG
Graco Inc.
Middleby Corp.
Pfeiffer Vacuum Technology AG
Schindler Holding AG
United Technologies Corp.
Intertek Group PLC
9,400
6,100
2,900
11,800
6,800
2,200
10,400
13,700
23,700
Total Industrials
704,821
722,677
1.88
6,237,268
7,065,282
18.38
456,342
434,349
577,993
785,995
2,254,679
580,503
598,480
616,358
970,829
2,766,170
7.20
Consumer Durables & Apparel
Cie Financiere Richemont SA, Class A
Coach Inc.
NIKE Inc., Class B
The Swatch Group AG
Retailing
TJX Cos Inc.
9,200
9,700
7,100
2,000
21,800
988,466
1,104,559
2.87
3,243,145
3,870,729
10.07
51
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
Sysco Corp.
25,000
729,489
752,538
1.96
Diageo PLC
Nestle SA, Registered Shares
PepsiCo Inc.
41,700
15,275
11,100
756,580
786,889
729,943
2,273,412
822,499
913,926
753,955
2,490,380
6.48
684,824
724,995
1,409,819
750,542
752,866
1,503,408
3.90
4,412,720
4,746,326
12.34
682,614
497,446
732,474
1,912,534
748,379
555,645
783,663
2,087,687
5.43
735,170
919,260
938,062
2,592,492
737,618
919,961
934,841
2,592,420
6.75
4,505,026
4,680,107
12.18
1,151,996
1,091,601
440,570
823,202
3,507,369
1,113,326
1,057,494
469,560
878,581
3,518,961
9.16
876,151
875,678
1,008,426
2,760,255
791,903
975,505
1,398,675
3,166,083
8.24
6,267,624
6,685,044
17.40
Consumer Staples
Household & Personal Products
Colgate-Palmolive Co.
Unicharm Corp.
8,900
18,000
Health Care
Becton Dickinson and Co.
Cie Generale d’Optique Essilor International SA
Varian Medical Systems Inc.
Pharmaceuticals, Biotechnology & Life Sciences
Johnson & Johnson
Novartis AG
Roche Holding AG
9,000
7,100
11,600
11,500
15,600
5,805
Total Health Care
Financials
Banks
Australia & New Zealand Banking Group Ltd.
BNP Paribas
Home Capital Group Inc.
US BanCorp.
CCLSA Financial Products Ltd., Warrants (20 May 15)
Franklin Resources Inc.
Moodys Corp.
Total Financials
49,000
14,198
9,100
35,700
52,500
7,700
37,800
52
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
NUMBER OF SHARES
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
895,255
553,697
549,403
455,532
2,453,887
1,133,310
774,510
707,323
588,282
3,203,425
8.34
831,824
750,034
1,581,858
948,611
759,997
1,708,608
4.45
Software & Services
MasterCard Inc., Class A
Oracle Corp.
Quality Systems Inc.
Solera Holdings Inc.
3,900
24,400
8,400
10,300
Keyence Corp.
Wincor Nixdorf AG
3,500
10,900
Semiconductor & Semiconductor Equipment
Taiwan Semiconductor Manufacturing Co., Ltd., ADR
58,100
China Mobile Ltd.
616,980
705,952
1.84
4,652,725
5,617,985
14.63
95,100
Total Equities
Transaction costs
975,514
848,663
975,514
848,663
2.20
34,358,516
38,007,252
98.90
(48,935)
34,733,798
—
38,429,467
100.00
53
The fundamental investment objective of the Sceptre Global Equity Fund is to achieve over the longer term the highest possible return that is consistent with a
fundamental investment philosophy through investment primarily in foreign equity securities, to provide long-term capital appreciation through a portfolio of
broadly diversified securities, by region and industry, invested primarily in the U.S. and International markets.
Market risk
The Fund’s market risk is primarily related to changes in actual market prices on its portfolio of equity securities, foreign currency movements, and to a limited
degree by interest rate risk on its short-term note investments.
(a)
Market price risk
Utilizing a predicted beta of 0.81 (December 31, 2010 – 0.47) if the S&P/TSX Composite index had increased or decreased by 5% at June 30, 2011, with all other
variables held constant, the Fund’s net assets could have increased or decreased, respectively, by approximately $1,554,998 (December 31, 2010 – $887,000). In
(b) Currency risk
Currency risk is the risk that the value of investments denominated in currencies, other than the functional currency of the Fund, will fluctuate due to changes in
also indirectly exposed to currency risk through its investments in underlying mutual funds which invest in financial instruments that are nominated in a currency
June 30, 2011
Swiss Franc
Euro
Japanese Yen
British Pound
Australian Dollar
Hong Kong Dollar
Bermuda Dollar
20,813,151
54.09%
6,197,945
16.11%
3,827,268
9.95%
2,684,944
6.98%
2,460,321
6.39%
1,143,810
2.97%
857,266
2.23%
—
0.00%
December 31, 2010
Currency
Exposure ($)
19,672,789
6,234,160
3,555,066
2,659,557
2,421,229
1,533,074
1,214,325
111,751
Percentage of
Net Assets (%)
50.90%
16.13%
9.20%
6.88%
6.26%
3.97%
3.14%
0.29%
other variables held constant, net assets would have increased or decreased, respectively, by approximately $383,953 (December 31, 2010 – $374,000). In practice,
actual results may differ from this sensitivity analysis and the difference could be material.
54
(c)
Interest rate risk
Credit risk
Credit risk is the risk that one party to a financial instrument fails to discharge an obligation and causes financial loss to another party. The Fund is subject to credit
risk from its short-term note investments and indirectly through investments held in underlying funds. However, since the short-term notes are Canada Treasury
Bills or are guaranteed by the Government of Canada, and represent less than 1.01% (December 31, 2010 – 2.33%) of the fair value of the Fund, credit risk is
considered minimal.
The Fund may engage in securities lending transactions with counterparties. Credit risk associated with these transactions is considered minimal as: the value of the
collateral must be no less than 102% of the value of the loaned securities (where the amount of collateral is adjusted each trading day to make sure that the value
of the collateral does not go below the 102% minimum level); the collateral to be held may consist only of cash, qualified securities or securities that can be
immediately converted into identical securities to those that are on loan; the Fund cannot loan more than 50% of the total value of its assets through securities
Liquidity risk
considered minimal.
Equities – Long
Short Term Notes
Warrant
Level 1
$
Level 2
37,215
388
—
37,603
$
$
Total
—
—
792
792
$
$
37,215
388
792
38,395
$
During the period, there were no transfers of investments between Level 1 and Level 2, no Level 3 financial assets were held.
Equities – Long
Short Term Notes
Level 1
$
$
Level 2
36,748
897
37,645
$
$
Total
984
—
984
$
$
37,732
897
38,629
During the period, there were no transfers of investments between Level 1 and Level 2, no Level 3 financial assets were held.
55
S C E P T R E M ON E Y M A R k E T F U N D
2011
Assets
Short-term investments (at cost $41,343;
2010 – $48,305)
Cash
Accrued interest and dividends receivable
$
41,418
538
61
2010
$
42,017
Liabilities
48,328
26
8
48,362
43
45
43
45
$
41,974
$
48,317
Net asset value per class
Class A
Class O
$
$
7,616
34,358
$
$
8,293
40,024
Net asset value per unit
Class A
Class O
$
$
10.00
10.00
$
$
10.00
10.00
Investment income
Interest
Expenses
Management fees
Custodian fees
Audit fees
Legal fees
Administration fees
Other fees
$
124
3
267
127
—
12
8
8
12
17
1
—
26
5
36
7
11
13
1
4
58
103
209
24
—
42
209
66
$
66
Increase in net assets from operations per class
Class A
$
34
Class O
$
175
$
$
12
54
Increase in net assets from operations per unit
Class A
$
Class O
$
$
$
0.01
0.02
$
265
2
2010
209
56
$
Signed on behalf of
2011
0.04
0.05
2011
2011
2010
2010
Class A
$
$
10,458
34
8,293
Class O
$
$
40,024
$
175
12
39,589
54
1,316
(2,027)
34
1,759
(2,286)
12
12,492
(18,289)
131
11,946
(17,638)
39
(677)
(515)
(5,666)
(5,653)
(34)
(12)
(175)
(54)
(34)
(12)
(175)
(54)
7,616
$
9,943
$
34,358
$
33,936
2011
2010
Total Fund
$
48,317
209
$
2011
2010
50,047
66
13,808
(20,316)
165
13,705
(19,924)
51
(6,343)
(6,168)
(209)
(66)
(209)
(66)
41,974
$
2011
Class A
Number of Units
$
43,879
2010
Class O
829
132
(203)
3
1,046
176
(229)
1
4,002
1,249
(1,828)
13
3,959
1,195
(1,764)
4
761
994
3,436
3,394
57
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
FACE VALUE
Cash
AVERAGE
COST ($)
FAIR
VALUE ($)
% OF
TOTAL
538,521
538,521
1.28
1,591,936
4,413,777
3,433,196
1,446,433
472,348
995,480
1,671,014
548,598
1,021,823
1,119,296
696,220
124,713
696,507
1,597,696
4,417,899
3,442,478
1,446,724
473,077
995,508
1,673,079
549,150
1,023,155
1,120,017
696,754
124,752
697,036
18,231,341
18,257,325
943,664
645,762
770,063
299,136
1,246,974
497,130
1,068,023
99,741
769,831
695,254
149,556
747,840
473,637
573,344
648,148
249,310
521,619
947,730
649,305
773,382
299,174
1,249,449
499,132
1,072,660
99,763
773,249
696,504
149,815
749,668
474,067
574,818
649,507
249,726
523,737
10,399,032
10,431,686
2,486,399
997,150
498,700
748,043
546,515
1,096,809
398,836
349,454
398,860
199,434
199,482
2,487,565
999,809
499,921
749,396
547,546
1,099,326
399,552
349,847
399,410
199,834
199,593
7,919,682
7,931,799
Short-Term Notes
Treasury Bills
Canadian T-Bill
Canadian T-Bill
Canadian T-Bill
Canadian T-Bill
Canadian T-Bill
Canadian T-Bill
Province of Manitoba
Province of Manitoba
Province of Ontario
Province of Ontario
Province of Ontario
Province of Quebec
Province of Quebec
18-Aug-11
1-Sep-11
15-Sep-11
29-Sep-11
10-Nov-11
8-Dec-11
10-Aug-11
24-Aug-11
31-Aug-11
23-Nov-11
30-Nov-11
9-Sep-11
18-Nov-11
1.101%
0.948%
0.910%
0.918%
1.129%
1.029%
1.049%
1.048%
1.081%
1.120%
1.120%
1.039%
1.109%
1,600,000
4,425,000
3,450,000
1,450,000
475,000
1,000,000
1,675,000
550,000
1,025,000
1,125,000
700,000
125,000
700,000
Total Treasury Bills
Bankers Acceptance
Bank of Montreal
Bank of Nova Scotia
Bank of Nova Scotia
Bank of Nova Scotia
Caisse Centrale Desjardins
Caisse Centrale Desjardins
HSBC Bank Canada
HSBC Bank Canada
Laurentian Bank of Canada
6-Sep-11
11-Jul-11
29-Aug-11
26-Sep-11
15-Jul-11
19-Aug-11
31-Aug-11
15-Sep-11
1-Sep-11
15-Nov-11
8-Aug-11
15-Jul-11
2-Sep-11
11-Jul-11
25-Jul-11
5-Aug-11
7-Sep-11
1.311%
3.927%
1.300%
1.159%
1.150%
1.301%
1.310%
1.142%
1.339%
1.340%
1.191%
1.159%
1.142%
1.159%
1.159%
1.148%
1.300%
950,000
650,000
775,000
300,000
1,250,000
500,000
1,075,000
100,000
775,000
700,000
150,000
750,000
475,000
575,000
650,000
250,000
525,000
Total Bankers Acceptance
Financement-Quebec
Financiere CDP Inc.
Honda Canada Finance Inc.
OMERS Finance Trust
OMERS Finance Trust
Societe Generale SA
Suncor Energy Inc.
Volkswagen Credit Canada Inc.
Volkswagen Credit Canada Inc.
Total Discount Commercial Paper
8-Dec-11
7-Jul-11
6-Jul-11
26-Jul-11
26-Oct-11
20-Jul-11
5-Aug-11
15-Jul-11
15-Aug-11
26-Jul-11
1-Sep-11
1.141%
1.159%
1.160%
1.179%
1.401%
1.180%
1.171%
1.141%
1.199%
1.219%
1.200%
2,500,000
1,000,000
500,000
750,000
550,000
1,100,000
400,000
350,000
400,000
200,000
200,000
58
43.52
24.86
18.90
As at June 30, 2011
PRINCIPAL AMOUNT/
MATURITY
DATE
COUPON
RATE
FACE VALUE
AVERAGE
COST ($)
FAIR
VALUE ($)
23-Sep-11
1.061%
650,000
647,966
648,418
Total Promissory Notes
647,966
648,418
1.55
37,198,021
37,269,228
88.83
2,048,077
897,453
473,680
74,771
249,293
2,048,077
899,636
474,751
74,904
249,324
3,743,274
3,746,692
8.93
401,892
401,892
0.96
4,145,166
4,148,584
9.89
—
—
41,881,708
41,956,333
Promissory Notes
% OF
TOTAL
PSP Capital Inc.
PSP Capital Inc.
PSP Capital Inc.
PSP Capital Inc.
9-Jan-12
14-Jul-11
18-Jul-11
11-Aug-11
26-Sep-11
5.750%
1.138%
1.131%
1.139%
1.138%
2,000,000
900,000
475,000
75,000
250,000
Total Government and Guaranteed
Corporate Bonds
Honda Canada Finance Inc.
25-Aug-11
4.696%
400,000
Transaction costs
100.00
59
The fundamental investment objective of the Sceptre Money Market Fund is to provide as high a level of income as is consistent with the preservation of capital
and liquidity. Investments will be primarily in Government of Canada Treasury Bills, Provincial Treasury Bills, and high quality short-term corporate obligations.
Market risk
Market risk is comprised of three components: market price risk, interest rate risk and foreign currency risk. The Fund’s primary market risk is interest rate risk.
As at June 30, 2011 and December 31, 2010 the Fund is not currently exposed to market price risk as no equities are held in the Fund. As at June 30, 2011 and
December 31, 2010 the Fund is not exposed to currency risk either as all monetary financial instruments are denominated in Canadian dollars.
changes in the prevailing levels of market interest rates. The Fund’s exposure to interest rate risk is concentrated in its investment in money market instruments.
Other financial assets and liabilities are short-term in nature and/or non-interest bearing.
As at June 30, 2011, $41,417,812 (December 31, 2010 – $48,327,920) was invested in short-term notes and bonds with terms to maturity of less than one year.
As at June 30, 2011 if market interest rates had changed by 25 basis points, with all other variables held constant, the change in the Fund’s net assets would have
been approximately $21,744 (December 31, 2010 – $29,000).
Credit risk
credit risk from its short-term notes portfolio. The Fund limits its exposure to credit loss by investing in securities with high credit quality and by diversifying
among a large number of issuers.
Moody’s. Ratings for securities, by the higher of the DBRS, S&P, and Moody’s ratings, that subject the Portfolio to credit risk at June 30, 2011 and December 31,
2010, are noted below:
Rating
AAA
AA
A
Not Rated
June 30, 2011
December 31, 2010
65.87%
23.51%
0.96%
8.34%
98.68%
80.93%
9.29%
7.74%
2.06%
100.02%
All portfolio transactions in securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities
Liquidity risk
considered minimal.
60
Bonds
Short Term Notes
Level 1
$
Level 2
3,746
18,906
22,652
$
$
Total
402
18,364
18,766
$
$
4,148
37,270
41,418
$
Bonds
Short Term Notes
Level 1
$
$
Level 2
3,740
39,601
43,341
$
$
Total
—
4,987
4,987
$
$
3,740
44,588
48,328
61
T H E S C E P T R E M U T UA L F U N D S
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2011 (Unaudited)
1.
Declaration of Trust
The Sceptre Mutual Funds (the “Funds”) are open-end unincorporated mutual funds created under the laws of the Province of Ontario pursuant to a Declaration
of Trust dated November 22, 1985, as amended, supplemented and restated on September 10, 2010 by Fiera Sceptre Inc. (the “Manager”), who acts as trustee and
manager of the Funds.
The financial statements of the Funds are comprised of the statements of investment portfolio as at June 30, 2011, the statements of net assets as at June 30, 2011
and December 31, 2010 and the statements of operations and changes in net assets for the periods then ended.
The Units
The Funds may issue an unlimited number of units of each class. Class A and Class D units are available to all investors. Class O units are designed for institutional
and high net worth investors, including other funds, who are entitled to reduced management fees because of the lower cost of servicing large dollar investments.
Class A units may be changed to Class O units of the same Fund at the Manager’s discretion and upon the agreement of the unitholder, if the unitholder meets
the Class O unit eligibility requirements. Class F units are available to investors who participate in dealer-sponsored “fee-for-service” or wrap programs and whose
broker or dealer has entered into an agreement with the Manager to sell Class F units.
Fund units are of the same class and grant identical rights and privileges. Each unit entitles it’s holder to one vote and, in the case of Fund liquidation, in the
allocation of the unit class’s net assets after all liabilities have been paid.
The Sceptre Large Cap Canadian Equity Fund and the Sceptre U.S. Equity Fund have only Class O units. Any reference in these notes to “class of units” means, in
respect to these two funds, its single class of units.
2.
Significant Accounting Policies
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”), which include estimates and
assumptions by management that may affect the reported amounts of assets, liabilities, income and expenses during the reporting periods. Actual results could
vary from these estimates.
(a) Financial Instruments and Capital Disclosures
On January 20, 2009, The Canadian Institute of Chartered Accountants “CICA” Accounting Standards Board issued Emerging Issues Committee Abstract 173
(“EIC-173”), “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities”. EIC-173 supplements CICA Handbook Section 3855 “Financial Instruments
– recognition and Measurement”, wherein it states that fair value takes into account the credit quality of a financial instrument. The EIC-173 affirms that an entity’s
own credit risk (in the case of financial liabilities) and counterparty’s credit risk (in the case of financial assets) should be taken into account in determining the
fair values of financial assets and financial liabilities, including derivative instruments.
The Manager has reviewed its policies for valuation of assets and liabilities and believes that the fair values ascribed to the financial assets and financial liabilities
in these financial statements incorporate appropriate levels of credit risk.
Effective on January 1, 2009, the Fund adopted the recent amendments to CICA Section 3862, “Financial Instruments – Disclosures”.
These amendments establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1
Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Manager has the ability to access at the
measurement date.
Level 2
Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs from markets that are
not considered to be active.
Level 3
Inputs that are unobservable. There is little if any market activity. Inputs into the determination of fair value require significant management
judgment or estimation.
These disclosures are presented in the “Discussion of Financial Risk management” for each Fund. The discussion follows each Fund’s Statement of Investments.
62
NOTES TO FINANCIAL STATEMENTS (Continued)
(b) Valuation of investments
Investments are deemed as held for trading in accordance with CICA Section 3855 and Accounting Guideline 18 and the market value of investments as at the
financial reporting period end is determined as follows:
(i)
Securities traded in an active market are valued at their bid prices (for investments held) and ask prices (for investments sold short) through recognized
public stock exchanges or through recognized investment dealers. Securities with no available bid prices are valued at their closing sale prices.
(ii)
Securities not traded in an active market are valued using valuation techniques, using observable market inputs on such basis and in such manner as
established by the Manager.
(iii) Underlying funds are valued each business day at the price calculated by the manager of such underlying fund in accordance with the relevant documents of
such underlying fund.
The Fund continues to use the close or last trade price as fair value of a security to determine the daily transactional Net Asset Value (“NAV”) for purchases and
redemptions by clients.
The valuation method used to calculate the daily NAV to transact units of the Fund is not identical to the accounting policies used to determine the financial
statement Net Assets. Any difference between the NAV and Net Assets are disclosed in note 9.
(c) Transaction costs
Transaction costs are expensed as incurred. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of an
investment, which include fees and commissions paid to agents, advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer
taxes and duties.
The cost of investments represents the amount paid for each security, and is determined on an average cost basis except for money market securities for which
cost is determined using the first-in first out method.
(d) Unit valuation and valuation date
Units are issued and redeemed on a continuous basis at their NAV which is determined, for every class of units of each Fund, except for the Sceptre Money
Market Fund, on each day that the Toronto Stock Exchange is open for business. The Sceptre Money Market Fund is valued on each day Canadian Chartered Banks
are open for business, other than Saturdays. The unit valuation per class is determined by dividing the aggregate fair value of the net assets of that class of the
Fund by the total number of units of that class outstanding at the close of business on the valuation day.
(e) Investment transactions
Investment transactions are accounted for on trade date.
Cash
Cash and bank overdraft are deemed to be held for trading and are carried at fair value.
Other assets and liabilities
In accordance with Section 3855, due from broker, accounts receivable for units sold as well as interest, dividends and other receivables are deemed to be loans
and receivables and are recorded at cost. Similarly, accrued liabilities, accounts payable for units redeemed, due to broker, interest, dividends and other payables
as well as distributions payable are deemed to be financial liabilities and are recorded at cost. Given their short-term nature, their carrying amount closely
approximates their fair value.
(f) Revenue recognition
(i)
Interest income is recorded on an accrual basis.
(ii)
Dividend income is recorded on the ex-dividend date and is net of withholding taxes.
(iii) Realized gains and (losses) on investments and unrealized appreciation (depreciation) in value of investments are calculated using to the average cost of the
related investments.
(iv) Income received from income trusts is recorded on the ex-distribution date and allocated between income, capital gains and return of capital when the
information necessary for such an allocation becomes available, or if such information is not available the Manager will determine the split at its discretion.
(v)
Income, realized gains (losses), and unrealized gains (losses) are allocated among the classes on a pro-rata basis based on the relative NAV for each class.
(g) Foreign exchange
Foreign currency amounts are expressed in Canadian dollars on the following basis:
(i)
Fair value of investments, other assets and liabilities at the exchange rates prevailing at the period-end date.
(ii)
Investment transactions, income and expenses at the rates prevailing on the respective dates of such transactions.
(iii) Realized exchange gains and losses are included in “Realized gain (loss) on foreign exchange” in the statement of operations. The different between the
unrealized exchange gains and losses at the beginning and end of the period is included in “Unrealized appreciation (depreciation) of investments and foreign
currency” in the statement of operations.
63
(h) Increase (decrease) in net assets from operations per unit
Increase (decrease) in net assets from operations per unit in the Statements of Operations represents the increase (decrease) in net assets from operations
attributable to each class of units for the period, divided by the weighted average number of outstanding units of that class during the period.
(i)
Management fees and operating expenses
The Manager is paid a management fee from the Sceptre Mutual Funds calculated on Class A, Class D, and Class F units, as a percentage of the NAV of the class,
as of the close of business on each business day.
(j)
Securities lending
The Funds qualify to lend portfolio securities from time to time in order to earn additional income. The Funds receive collateral in the form of cash or qualified
non-cash collateral having a market value equal to at least 102% of the market value of the securities during the period of the loan, and the borrower must provide
the Funds with the right to sell the non-cash collateral if the borrower defaults on its obligations under the transaction.
The market value of the loaned securities is determined at the close of business on each valuation date and any additional required collateral is delivered to the
Funds on the next business day. Cash collateral is invested in cash equivalents. The value of loaned securities, at period end, and related collateral, is summarized
in note 5.
3.
Management fees and operating expenses
The management fee rate for these Classes of units is set out in the following table. The rate is an annual percentage of the average NAV of the class:
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Income & Growth Fund
Bond Fund
High Income Fund
Canadian Equity Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
Class A
1.25%
0.75%
1.25%
1.25%
1.25%
1.75%
0.50%
Class D
2.00%
1.00%
2.00%
2.00%
2.00%
2.50%
n/a
Class F
1.00%
n/a
1.00%
1.00%
1.00%
n/a
n/a
All the Funds have Class O units while the Sceptre U.S. Equity Fund and Sceptre Large Cap Canadian Equity Fund only offer Class O units. Management fees
are not payable by Class O units of the Funds. For its services in managing these assets, the Manager receives a management fee from each unitholder under
the terms of an investment management contract based upon a fee applied to the unitholder’s total assets managed. Such fees may decrease, in percentage
terms, as the assets under management increase.
Each Fund is responsible for the payment of all expenses relating to the operation of the Fund. Operating expenses include audit, legal, transfer agent, trustee,
administration, filing and miscellaneous expenses specific to each Fund. The Funds also bear the cost of the Independent Review Committee which was
established pursuant to National Instrument 81-107 ‘Independent Review Commitee for Investment Funds”. Operating expenses are allocated between the
classes of units based on the services used by each class. The Manager may absorb all or a portion of the Funds' obligations, where the aggregate expenses
exceed a certain percentage of the average daily NAV per class of each Fund. This absorption of expenses may be terminated at any time by the Manager.
Amounts absorbed by the Manager, if any, are reported in the Statement of Operations.
The provinces of Ontario and British Columbia have taken steps to implement the harmonized sales tax (“HST”), which replaces excisting provincial sales taxes
and the federal goods and services tax in these provinces. The HST is effective since July 1, 2010 and is adminstered by the canda Revenue Agency. This new tax
did not have a significant impact on the amount of tax charged to the Funds.
4.
Distributions
The Bond Fund, Canadian Equity Fund, Equity Growth Fund, Global Equity Fund and U.S. Equity Fund distribute income twice a year, in June and December. The
Large Cap Canadian Equity Fund’s net income is distributed quarterly. Since September 2007, the Income & Growth Fund and High Income Fund aim to pay a
distribution equal to a yield of between 4% to 7% per annum. The distributions will be made monthy consisting of income, and to the extent necessary, as a return
of capital.The net realized capital gains of all Funds are distributed annually in December to each unitholder of record on that date.These distributions are generally
reinvested. Net realized capital losses are not distributed. Such capital losses reduce the net realized capital gains of subsequent years to be distributed to
unitholders. Refer to Note 6 for each Fund’s accumulated non-capital losses and net capital losses. The Money Market Fund distributes its net income every day
to each unitholder in proportion to his or her holdings. On the last business day of each month, the total amount credited to each unitholder for that month is
reinvested in additional units of the same class of units of the fund.
64
5.
Security Lending
The aggregate market values of securities loaned and collateral held under securities lending transactions as at June 30, 2011 and 2010 are as follows:
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
6.
Outstanding loans
2011
2010
$ 9,649
$
4,923
$ 23,484
$ 16,699
$ 3,556
$
5,996
$ 125,569
$ 66,768
$ 3,504
$
1,447
—
$
$ 21,917
$ 12,514
$ 17,344
$ 3,139
$
5,026
$
—
$
—
Bond Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
High Income Fund
Large Cap Canadian Equity Fund
U.S. Equity Fund
Collateral amount
2011
2010
$ 10,131
$ 5,169
$ 24,659
$ 17,534
$ 3,734
$ 6,296
$ 131,848
$ 70,107
$ 3,899
$ 1,519
—
$
$ 23,013
$ 13,140
$ 18,211
$ 3,296
$ 5,277
$
—
$
—
Income Taxes
The Funds qualify as mutual fund trusts as defined in the Income Tax Act (Canada). Pursuant to the terms of the declaration of trust establishing the Funds, the
Funds pay or make payable in the calendar year to the unitholders all the net taxable investment income and such portion of the net capital gains which will result
in the Funds paying no tax under the current provisions of the Act. As a result, under existing tax legislation, the net investment income and capital gains are
taxable in the hands of the unitholders of the Funds. Accordingly, no provision for Canadian income taxes has been made in these financial statements.
As at December 31, 2010, the Funds had no accumulated non-capital losses, and accumulated net capital losses as follows:
Capital Losses
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Bond Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
High Income Fund
U.S. Equity Fund
$
$
$
$
$
$
$
$
$
6,285
4,194
16,978
24,403
32,889
—
14,422
804
—
The capital losses are available to be carried forward indefinitely for tax purposes and maybe applied against capital gains realized in the future.
7.
Related Party Transactions
There were no related party transactions during the period, other than management fees paid to and expenses absorbed by the Manager. These expenses and
accruals are separately disclosed in the Statement of Operations and Statement of Net Assets, if applicable, for each Fund.
The Manager provides funding of seed capital for Funds that it promotes and as a result, the Manager holds some of the Fund’s units.
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Bond Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
High Income Fund
U.S. Equity Fund
Class D
Seed Money
Class F
Class O
4.1%
6.4%
100%
0.4%
100%
—
2.3%
—
—
0.9%
—
0.2%
0.1%
—
—
0.2%
—
—
—
—
—
—
—
0.2%
—
—
1.0%
65
8.
Commissions and other transaction costs
The amounts paid by the Funds for brokerage commissions and other transaction costs for portfolio transactions are included in the Statement of Operations
for each Fund.
Included in the transaction costs are soft dollar commissions as follows for the period ending June 30:
2011
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
Sceptre
9.
Bond Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
High Income Fund
U.S. Equity Fund
2010
$
$
$
$
$
$
$
$
$
1
—
5
—
—
—
—
—
—
$
$
$
$
$
$
$
$
$
1
—
6
168
1
—
12
—
—
Comparison of Net Asset Value and Net Assets
The table below shows the difference between NAV unit and Net Assets per unit as at June 30 and December 31 (note 2b):
As at June 30, 2011
Net Assets Net Asset Value
Per Unit ($)
Per Unit ($)
Sceptre
Class A
Class D
Class F
Class O
Sceptre
Class A
Class D
Class O
Sceptre
Class A
Class D
Class F
Class O
Sceptre
Class A
Class D
Class F
Class O
Sceptre
Class A
Class D
Class O
Sceptre
Class A
Class O
Sceptre
Class A
Class D
Class F
Class O
Sceptre
Sceptre
66
As at December 31, 2010
Net Assets Net Asset Value
Per Unit ($)
Per Unit ($)
18.60
18.39
18.72
19.39
18.62
18.41
18.74
19.41
18.69
18.51
18.77
19.33
18.71
18.53
18.79
19.35
12.70
12.63
11.76
12.72
12.65
11.78
12.66
12.59
11.73
12.68
12.61
11.75
19.97
19.60
20.11
21.14
20.01
19.63
20.14
21.18
20.29
20.00
20.41
21.47
20.31
20.03
20.43
21.49
114.54
110.91
116.22
124.44
114.88
111.24
116.57
124.81
118.62
115.31
120.17
127.85
118.77
115.46
120.32
128.02
14.39
14.26
16.59
14.40
14.27
16.60
13.63
13.54
15.64
13.64
13.54
15.65
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
15.96
15.76
16.10
16.30
10.84
19.20
15.99
15.79
16.13
16.32
10.84
19.23
15.89
15.73
16.00
16.07
10.13
19.27
15.90
15.74
16.02
16.09
10.13
19.30
Bond Fund
Equity Growth Fund
Global Equity Fund
Money Market Fund
High Income Fund
U.S. Equity Fund
10. Unitholders’ Equity
Unitholders may redeem all or part of their units by delivering a written request to do so to the Manager or to an investment dealer, securities dealer or mutual
fund dealer for delivery to the Manager. The unitholder’s signature may be required to be guaranteed by a guarantor acceptable to the Manager. Units will be
redeemed at the class NAV per unit as determined on the next valuation date. Requests for redemption received after 4.00 p.m., eastern standard time, on any
day are deemed to be received on the first business day following the date of the actual receipt. Redemption requests relating to unitholders’ registered plans are
to be accompanied by all transfer documents prescribed by the Canada Revenue Agency when the proceeds are to be transferred to another registered plan.
Units issued and outstanding represent the capital of each Fund. The Funds do not have any specific capital requirements on the subscriptions and redemptions
of units, other than minimum subscription requirements. Changes in the Funds’ capital during the period are reflected in the Statement of Changes in Net Assets.
The Manager is responsible for managing the capital of the Funds in accordance with the investment objectives and in managing their liquidity in order to meet
redemption requirements (refer to the “Disclosure of Financial risk management” for each Fund).
11. Financial Risk Management
The Funds classify their financial assets and financial liabilities in the following categories: held-for-trading, loans and receivables and other financial liabilities at
amortized cost.
The Funds’ financial instruments consist of cash, investments, receivables and payables. The carrying values of cash, receivables and payables approximate fair value
due to their short-term nature.The Funds are exposed to various types of risks that are associated with its investment strategies, financial instruments and markets
in which they invests.
The Funds activities expose it to a variety of financial risks, among which are market risk (including currency risk, interest rate risk and price risk), credit risk and
liquidity risk. The Funds overall risk management strategy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on
the Funds rate of return.
The Manager is responsible for risk management of the Funds. The Manager compares the Funds performance to its benchmark on a monthly basis. This analysis
is then reviewed every month by the Chief Investment Officer and the CIO office committee. Furthermore, the Manager ensures that the Funds investment policies
are rigorously followed and writes a quarterly compliance report, which is reviewed on a quarterly basis by the Chief Investment Officer.
These risks are discussed in the “Discussion of Financial Risk Management” for each Fund. The discussion follows each Fund’s Statement of Investments.
12. Future changes in accounting standards
In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards
(“IFRS”). IFRS will apply to semi-annual and annual financial statements for fiscal years beginning on or after January 1, 2011.
In October 2010, the CICA amended the date of application of IFRS for investment companies that apply the accounting guideline on investment companies
(“AcG-18”). Hence, IFRS will be adopted for semi-annual and annual financial statements for fiscal years beginning on or after January 1, 2012. The CICA has
recently proposed to extend the IFRS conversion date to financial years beginning on or after January 1, 2013.
Due to anticipated changes in IFRS prior to the transition to IFRS, the Manager cannot conclusively determine at this time the full impact of the transition on the
Fund’s financial results. Based on the Manager’s current understanding and analysis of IFRS as compared to the current accounting policies under Canadian GAAP,
the Manager does not anticipate that the transition to IFRS will have a material impact on the Fund’s net assets per unit or on its systems and processes. It is
expected that the transition will mainly result in additional note disclosures in the financial statements. Implementation of the changeover plan is progressing as
scheduled. The Manager will continue to monitor ongoing changes to IFRS and adjust the changeover plan accordingly.
67
1501 McGill College Avenue, Suite 800
Montréal, Québec H3A 3M8
T: 514 954-3300 / 1 800 361-3499
One Queen Street East, Suite 2020
Toronto, Ontario M5C 2W5
T: 416 364-3711 / 1 800 994-9002
1188 West Georgia Street, Suite 2001
Vancouver, British Columbia V6E 4A2
T: 604 688-7234 / 1 877 737-4433
20 Erb Street West, Suite 504
Waterloo, Ontario N2L 1T2
T: 519 883-1500 / 1 866 280-1338
www.fierasceptre.ca
S99E

The Fiera Sceptre Mutual Funds

Transcription

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