corporate class funds

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Quadrus corporate class

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A tax-efficient way to investCorporate class funds can help you reduce the income tax you pay in three ways:

1. Rebalancing or switching among funds in your account does not trigger immediate capital gains.

2. There is the potential to receive lower taxable income.

3. If there is taxable income, you pay less tax on it because of the type of income (capital gains and/or dividend income).

These opportunities to reduce the amount of tax payable exist because in the corporate mutual fund structure, each fund in the family is actually a different class of shares within a single corporation.

Quadrus corporate class funds

Quadrus corporate class funds offer a collection of multi-manager and individual funds from some of the

world’s leading investment managers.

Each multi-manager equity fund is engineered to minimize risk and was created based on rigorous

selection criteria and subjected to extensive portfolio testing. This process helps ensure each fund offers

minimal volatility for the level of expected return.

The single-manager funds work well as a complement to other corporate class funds, giving you a unique,

tax-efficient portfolio that’s diversified across investment management style, asset class and geographic region.

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The tax advantages in detail

1. The ability to switch or rebalance among the funds without immediately triggering taxable gains or losses

When you sell one fund to acquire another within this selection of corporate class funds, capital gains are not immediately triggered.*

2. Potentially lower distributions in any given year

The corporate structure allows the funds within the corporation to pool all income and expenses for income tax purposes, potentially reducing the taxable distributions to investors in any given year.

3. Tax-effective income

You receive tax-preferred capital gains or dividend distributions – even from the fixed income and cash management classes. Corporations, including corporate class mutual funds, may only pass income on to clients in the form of capital gains or ordinary dividends. These forms of income are more tax efficient than interest income you may earn through other investments.

Keep more money after tax Not all investment income is taxed at the same rate. Corporate class funds distribute capital gains and dividends, which are taxed at lower rates than interest income, allowing you to keep more of what you earn.

Assumptions $1,000 investment income

Tax rates:

• Interest income – 46.41%

• Eligible dividends – 26.57%

• Capital gains – 23.2%

Source: Ernst & Young 2010 tax calculator. This illustration considers the amount of income only and does not consider how much capital would have been required to create each type of income. These tax rates are based on the highest marginal tax rate for residents of Ontario. Residents of other provinces may be taxed at different rates. These rates are current as of June 15, 2010. They may change at any time.

* An increase in the volume of switching activity may increase or accelerate capital gains earned in the classes, potentially increasing capital gains or ordinary dividends paid to investors.

$1,000

$800

$600

$400

$200

$0Interest

After-tax income

Eligibledividends

Capitalgains

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SavingYour goal: Maximize the growth of your investments, reduce taxable income and defer tax as long as possible.

During the years you’re actively saving, corporate class funds can help you achieve your goals because a diversified portfolio of corporate class funds allows you to:

Manage portfolio drift with rebalancing

Some portions of your portfolio will grow faster than others, causing your asset mix to become out of line with your risk tolerance. Corporate class funds give you the ability to rebalance your investments by switching between the funds without immediately triggering capital gains.

Reduce taxable income – lower distributions

The potential for lower distributions from your investments during your peak earning years, when you’re likely in a higher tax bracket, allows you to minimize the taxes you pay now and maximize the growth of your investments. Taxable income is also reduced because dividends and capital gains are taxed at a lower rate than interest income on the fixed income and cash management classes.

Taking an income

Your goal: Maximize after-tax cash flow by reducing tax paid today.

When you are ready to take an income, D series corporate class funds can help you generate a tax-deferred income stream from your non-registered investments. A diversified portfolio of D series corporate class funds allows you to:

Manage portfolio drift

Withdrawing income from your investments can accelerate portfolio drift. Investing in D series corporate class funds gives you the ability to rebalance your investments without immediately triggering capital gains while receiving an income.

Reduce taxable income – return of capital and lower distributions

The potential for lower taxable distributions and monthly cash flow (from your D series investment) that is comprised mostly of return of capital, allows you to reduce the taxes you pay now and maximize the after-tax cash flow from your investments. Taxable income may also be reduced because dividends and capitals gains are taxed at a lower rate than interest income on the fixed income and cash management classes.

Manage your income needs

Although you planned carefully for the income years, your needs may change over time. If that happens, you can switch between a five and eight per cent distribution rate as required to meet your changing needs.

Benefits of corporate class funds

Manage your risk tolerance

As your risk tolerance changes, you can switch between the corporate class funds to reflect this without immediately triggering capital gains.

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Transition from saving to taking an incomeEven though you may be growing your assets at this stage of your life, now is also the time to plan for the transition from saving to taking an income. One of the biggest challenges of this transition is how to reduce or defer tax so you can keep more of your hard-earned money. Corporate class funds can help.

You can grow your assets by investing in corporate class funds now, then when you are ready to take an income from your investments, you can switch into D series corporate class without triggering a taxable disposition. D series provides you with tax-efficient monthly cash flow, most of which is return of capital, which isn’t taxed immediately when it is received.

Instead, your adjusted cost base (ACB) is reduced, allowing you to defer taxes until some point in the future. Once your ACB reaches zero, any further return of capital is taxed as a capital gain, of which only 50 per cent is taxable.

This strategy allows you to tax-efficiently grow your non-registered assets and then begin withdrawing income from them when needed – all while reducing or deferring taxable income.

The benefits of D series corporate class

Provides tax-efficient monthly cash flow

Defers taxes and reduces taxable income now

Switch into other corporate class funds without immediately triggering a taxable disposition

Corporate class funds provide options to help meet your needs in both phases and makes the transition from saving to taking an income seamless and tax efficient.

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A look at the fundsComplement a portfolio with exclusive investment opportunities These three funds offer you unique investment opportunities that are available exclusively through Quadrus Group of Funds. Use them to complement your other corporate class fund holdings.

Portfolio sub-advisor Strategy Target allocation*

Quadrus Sionna Canadian Value Corporate Class

Sionna Investment Managers Ltd.

Pursues long-term capital appreciation by investing primarily in equity securities of Canadian corporations. The fund is managed using a relative value approach to bottom-up stock selection using a disciplined research process to identify undervalued, high-quality companies.

100%

Quadrus Eaton Vance U.S. Value Corporate Class Class

Eaton Vance Managed Investments

Provides long-term capital growth appreciation by investing primarily in equity securities of U.S. corporations. Eaton Vance uses a value-oriented, research-driven and risk- averse investment approach that results in a well-diversified portfolio of large-capitalization value stocks.

100%

Quadrus Setanta Global Dividend Corporate Class

Setanta Asset Management Ltd.

Seeks to achieve long-term investment returns through capital growth and dividend yield by investing primarily in common and preferred shares of companies anywhere in the world.

100%

*Subject to change without notice

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Build portfolios with asset class funds at the coreThese six funds offer you a diversified portfolio within each asset class. Use them to build a complete portfolio and enjoy the potential tax advantages, or to complement your existing holdings and expand your exposure to one or more particular asset classes.

Quadrus Cash Management Corporate Class

Laketon Investment Management Ltd.

Invest in Canadian money market securities such as commercial paper and federal and provincial treasury bills.

100%

Quadrus Fixed Income Corporate Class

London Capital Management Ltd.

Invest directly or indirectly in a range of fixed income investments such as traditional fixed-rate, investment-grade Canadian government and corporate bonds, variable rate bonds, real return bonds, high-yield bonds, structured investments, foreign bonds and money market securities.

100%

Quadrus Canadian Equity Corporate Class

Bisset Investment Management

Direct investment in Bissett Canadian Equity Fund 10-20%

GWL Investment Management Ltd.

The focus is on selecting stocks that achieve strong earnings momentum, especially driven by revenue growth.

10-20%

Howson Tattersall Investment Counsel Ltd.

Direct investment in Mackenzie Saxon Stock Fund 10-20%


The focus is on growth-oriented companies with proven and sustainable earnings potential.

10-20%


Investment will be in higher-yielding, dividend-paying companies and income trusts that, historically, have share values that fluctuate less than the market because of their yield cushion.

10-20%

London Capital Management Ltd

Stock selection focuses on corporations with strong and improving earnings growth profiles, but that are trading at reasonable values relative to their growth.

10-20%

Mackenzie Financial CorporationDirect investment in Mackenzie Maxxum Canadian Equity Growth Fund 10-20%


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Quadrus North American Specialty Corporate Class

Fidelity Investments Canada ULC

Direct investment in Fidelity Canadian Opportunities Fund 10-20%


Direct investment in Fidelity Northstar® Fund 10-20%

GWL Investment Management Ltd.

Investment will be primarily in North American equity securities in the small and middle capitalization range that have an above-average growth potential.

15-25%


Direct investment in Mackenzie Saxon Microcap Fund 0-5%


Direct investment in Mackenzie Saxon Small Cap Fund 5-15%

Mackenzie Cundill Investment Management Ltd.

Direct investment in Mackenzie Cundill Canadian Security Class 10-20%

Mackenzie Financial Corporation

Direct investment in Mackenzie Ivy Enterprise Class 10-20%


Direct investment in Mackenzie Universal Canadian Resource Fund 5-15%

Quadrus U.S. and International Equity Corporate Class


Direct investment in Fidelity American Disciplined Equity® Fund 12-22%

Invesco Trimark Ltd.Direct investment in AIM Global Growth Class Fund 12-22%

London Capital Management Ltd.

Investment will be primarily in publicly traded securities of mid-to-large capitalization U.S. companies.

12-22%


Direct investment in Mackenzie Cundill International Class 12-22%


Direct investment in Mackenzie Ivy Foreign Equity Class 12-22%

Setanta Asset Management Ltd.

Investment will be made in securities of companies located in Europe, the Far East and the Pacific Basin. Emphasis is on quality companies that trade at an attractive valuation.

12-22%


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Quadrus U.S. and International Specialty Corporate Class

Fortis Investment Management Canada Ltd.

Direct investment in Mackenzie Universal World Real Estate Class 0-10%

Franklin Templeton Investments Corp.

Direct investment in Templeton Global Smaller Companies Fund 5-15%

Invesco Trimark Ltd.Direct investment in Trimark U.S. Small Companies Class 5-15%

Ivy Investment Management Company

Direct investment in Mackenzie Universal U.S. Emerging Growth Class 5-15%


Direct investment in Mackenzie Cundill Recovery Fund 0-10%


Direct investment in Mackenzie Cundill Emerging Markets Value Class 0-10%


Direct investment in Mackenzie Universal Emerging Markets Class 7-17%


Direct investment in Mackenzie Universal World Precious Metals Class. 0-10%


Direct investment in Mackenzie Universal World Resource Class 0-10%


Direct investment in Mackenzie Universal Technology Class 0-10%


Direct investment in Mackenzie Universal Health Sciences Class 0-10%


Direct investment in Mackenzie Universal Global Infrastructure Fund 0-10%


Direct investment in Mackenzie Universal Gold Bullion Class 0-10%

Templeton Asset Management Ltd.

Direct investment in Templeton BRIC Corporate Class 7-17%


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Quadrus Group of Funds brings together the expertise of these prominent investment managers

from around the world to manage your money.

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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Past performance may not be repeated.

Overall, while corporate class funds provide tax-deferral advantages, taxes may still be payable in the future,as these funds only delay realizing a taxable capital gain.Corporate class funds don’t allow you to avoid incurring tax liabilities. When clients redeem funds from the corporate class fund family a capital gain or loss is created. Funds may realize capital gains from trading activity (switches) that may potentially increase capital gains dividends distributed to investors.

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change. This information is general in nature, and is intended for educational purposes only. For specific situations you should consult the appropriate legal, accounting or tax expert.

Quadrus Investment Services Ltd. and design, Quadrus Group of Funds and Fusion are trademarks of Quadrus Investment Services Ltd. In Quebec, Quadrus Investment Services Ltd. is a firm in financial planning and a mutual fund dealer firm. 46-4381-7/10

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