George Silk, Time & Life PicturesJACKIE ROBINSON

ESPN.com

National Nikkei Museum and Heritage Centre

Photo: Washington Post

BUNT

GREAT DEFENSE!

RUN

STEAL +

MICHAEL LEWIS

$589K$55.4M

94 WINS

$1.03M$75.5M

73 WINS

$2.08M$198.0M

95 WINS

Taylor Glenn Photographs

CASH

CDN STOCKS

SMALL CAP

BONDSEMERGING

U.S.

INT’L STOCKS

ALTERNATIVESGIC

REAL ESTATE

COMMODITIES

$196,715 $386,968

$761,226

$1,497,446

$2.945,703

17% 31% 43%

53%

61%

$100,000 @ 7%/annually2% fee

INVESTOR FEES

10yrs 20yrs 30yrs 40yrs 50yrs

Pssst!Wanna buy some

uncorrelated returns?

BETTER MEDIAN RETURN

GREATER RISK OF BIGGER NEGATIVE

CONVERTIBLE ARBITRAGERISK ARBITRAGE

DISTRESSED SECURITIESEMERGING MARKETS

ALTERNATIVE

INDEX

MARKET NEUTRAL

SHARPE RATIOS

MEAN VARIANCE

OPTIMIZATION

DO YOU NEED IT?

Source: CMHC, Cushman Wakefield, Raymond James, PŮR

CANADIAN REAL ESTATE MARKET

5.2%

6.5%

5.6%

5.3%

5.2%

Cap Rates

4.7%

43.9%

28.4%

10.1%

12.9%

5.8%

32.0%

34.5%

10.8%

16.9%

4.7%

38.2%

38.2%

4.6%

11.7%

Senior Care

Retail

Office

Industrial

Multi-residential

6.7%

15.7%

22.3%

24.8%

30.5%

CANADA

Multi-residential

Industrial

Office

Retail

Senior Care

Vanguard VREFTSE Canada All Capped

BMO ZREDJ Canada Select Equal Weight

iShares XRES&P/TSX Capped REIT

0%

2%

4%

6%

8%

10%

12%

14%

0% 5% 10% 15% 20% 25% 30%

10 y

ear a

nnua

lized

tota

l ret

urn

Volatility (10 year standard deviation)

Direct property

Canada bondsCanada equities

Property equity

Data: IPD /MSCI Inc. 2011, PŮR 2012

TOTAL RETURN / VOLATILITYMORE R

ISK

MORE RETURN

Note: XRE and ZRE 2.7 years (since ZRE inception)

Target Date Retirement Fund>55% Equities

Ret

irem

ent

45 Y

ears

40 Y

ears

35 Y

ears

25 Y

ears

20 Y

ears

15 Y

ears

10 Y

ears

5 Ye

ars

30 Y

ears

Intl

Equi

ties

Fixe

d In

com

eSh

ort T

erm

NA

Equi

ties

TARGET-DATE FUND

ACTUAL RISK

COMPOSITE GLIDE PATH

51.2%

89.9%

December 31, 1970 – December 31, 2010

TARGET-DATE FUND

TECHNOLOGY/S&P 500

S&P 500 VOLATILITY

1990 2000 2002 Source: PŮR Investing Inc.

TECHBUBBLE

S&P VOLATILITY2005 2006 2007 2008 2009 2010

Source: PŮR Investing Inc.

CORPORATE BONDS/U.S. TREASURIES

CREDIT CRISIS

S&P VOLATILITY

Hypothetical 10 years to Dec/2012 S&P 500 CONSTANT RISK

Return -1.1% 4.9%

Risk 26.3 15.1

2000 2003 2006 2009Source: PŮR Investing Inc.

CONSTANT RISK

TED WILLIAMS

BALANCED 60:40

TARGET DATE FUND

DYNAMIC CR

97%52%

37%

B

WINNING GLIDE PATH

TARGET CAPITAL

RISK

C

A

Source: PŮR Investing Inc.

CAPITAL ACCUMULATION PATH (EST)

What DC Members Really Want – Rotman Int’l Journal of Pension Man

15.6%

10.7%

10.0%

6.6%

5.5%

ALL STOCKS

BALANCED 60/40

TARGET DATE FUNDS

ALL BONDS

DYNAMIC CR

RISK! 5 YEARS BEFORE RETIREMENT

Photo: Washington Post

BEAR

MANAGED FUTURES

MARKET NEUTRAL

CONVERTIBLE ARBITRAGERISK ARBITRAGEDISTRESSED SECURITIESEMERGING MARKETS

LONG SHORT

TRENDLESS

BULL

MANAGED FUTURES

CAPITALISM

SOCIALISM

COMMUNISM

BUREAUCRACY

SECURITIES REGULATORS

INFORMATION ASSYMETRY

SUITABILITY?

National Nikkei Museum and Heritage Centre