iShares: The Next Generation ETF John Schmidt Raymond Ng Lisa lajeunesse Kevin Kranzler John Schmidt Raymond Ng Lisa lajeunesse Kevin Kranzler

Agenda  Three ETF’s to be discussed:  iShares CDN S&P 500 Index Fund (XSP)  iShares Dow Jones Canadian Dividend (XDV)  iShares MSCI EAFE Index Fund (XIN)  Three ETF’s to be discussed:  iShares CDN S&P 500 Index Fund (XSP)  iShares Dow Jones Canadian Dividend (XDV)  iShares MSCI EAFE Index Fund (XIN)

What are iShares?  125 Exchange Traded Funds, traded on global exchanges  trade on the TSX just like a normal share  “in kind” creation and redemption process  125 Exchange Traded Funds, traded on global exchanges  trade on the TSX just like a normal share  “in kind” creation and redemption process

iShares CDN S&P 500 Index Fund  Overview:  Replicates the performance of the S&P 500  Hedged to Canadian Dollars  Fund Commenced May 2001  Started hedging returns November 2005  Overview:  Replicates the performance of the S&P 500  Hedged to Canadian Dollars  Fund Commenced May 2001  Started hedging returns November 2005

iShares CDN S&P 500 Index Fund  The S&P 500 Index:  Market capitalization weighted index of securities of the 500 largest US public issuers  MER  0.15%  0.09% fee paid to Barclays Canada  0.24% total  The S&P 500 Index:  Market capitalization weighted index of securities of the 500 largest US public issuers  MER  0.15%  0.09% fee paid to Barclays Canada  0.24% total

iShares CDN S&P 500 Index Fund  Net Asset Value  Calculated daily at market close  Calculated in Canadian Dollars  Income Distribution  Distributed at least once each year  Either paid in cash or reinvested  Net Asset Value  Calculated daily at market close  Calculated in Canadian Dollars  Income Distribution  Distributed at least once each year  Either paid in cash or reinvested

iShares CDN S&P 500 Index Fund

 Investment Risk  General risks associated with investing  Foreign investment risk  Currency risk  Risk of iShare price differing than NAV  Investment Risk  General risks associated with investing  Foreign investment risk  Currency risk  Risk of iShare price differing than NAV

iShares CDN S&P 500 Index Fund  Investor Suitability  Great for rounding out a portfolio  Has risks for Canadian Investors  Good for a conservative investor with a long time horizon  Investor Suitability  Great for rounding out a portfolio  Has risks for Canadian Investors  Good for a conservative investor with a long time horizon

iShares Dow Jones Canadian Dividend (XDV)  Overview  Attempts to replicate the Dow Jones Canada Select Dividend Index  The Index is comprised of 30 of the highest yielding and dividend paying companies  Fund started December 2005  MER  Capped at 0.5%  Overview  Attempts to replicate the Dow Jones Canada Select Dividend Index  The Index is comprised of 30 of the highest yielding and dividend paying companies  Fund started December 2005  MER  Capped at 0.5%

iShares Dow Jones Canadian Dividend (XDV)

 Investment Risk  General risks associated with investing  Risk of iShare price differing than NAV  Risk of non-capitalization weighted strategy  Investment Risk  General risks associated with investing  Risk of iShare price differing than NAV  Risk of non-capitalization weighted strategy

iShares Dow Jones Canadian Dividend (XDV)  Investor Suitability  Great for rounding out a portfolio  Good for a conservative investor with a long time horizon  Investor Suitability  Great for rounding out a portfolio  Good for a conservative investor with a long time horizon

iShares MSCI EAFE Index Fund (XIN)  Overview:  ETF is based on the MSCI EAFE Index  Returns are hedged to Canadian currency  Index Outline  Comprised of 21 different country indices  Represents developed markets outside of North America  Overview:  ETF is based on the MSCI EAFE Index  Returns are hedged to Canadian currency  Index Outline  Comprised of 21 different country indices  Represents developed markets outside of North America

iShares MSCI EAFE Index Fund (XIN)

 MER  0.15% Trustee Fee  0.35% ishare Fee  0.50% total  History  Started trading September 6, 2001  Hedged to CAD$ November 2005  MER  0.15% Trustee Fee  0.35% ishare Fee  0.50% total  History  Started trading September 6, 2001  Hedged to CAD$ November 2005

iShares MSCI EAFE Index Fund (XIN)  Net Asset Value  Calculated daily at market close  Calculated in Canadian Dollars  Income Distribution  Distributed at least once each year  Either paid in cash or reinvested  Net Asset Value  Calculated daily at market close  Calculated in Canadian Dollars  Income Distribution  Distributed at least once each year  Either paid in cash or reinvested

iShares MSCI EAFE Index Fund (XIN)

 Investor Risk  General risks associated with investing  Currency risk  Risk of ishare price differing than NAV  Foreign investment risk  Investor Risk  General risks associated with investing  Currency risk  Risk of ishare price differing than NAV  Foreign investment risk

iShares MSCI EAFE Index Fund (XIN)  Investor Suitability  Good addition to a portfolio  Targets a conservative investor looking for international exposure  Investor Suitability  Good addition to a portfolio  Targets a conservative investor looking for international exposure

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