1. MUTUAL FUNDS 101 WHAT THEY ARE AND HOW THEY WORK MARCH 2013

2. 2 OVERVIEW Mutual funds: What they are and how they work Performance and taxation Understanding risk and protection Types of funds Buying and investing strategies History of Dynamic Funds

3. 3 WHAT IS A MUTUAL FUND? Provides investors access to a diversified portfolio of investments Money you invest is pooled with other investors Money is invested on your behalf by qualified investment professionals, based on objectives for the fund

4. 4 WHY INVEST IN A MUTUAL FUND? Convenience Affordability Access to your money Professional management Diversification Access to markets

5. 5 HOW DOES A MUTUAL FUND WORK? Every mutual fund has an investment objective Managers invest the fund’s money in holdings aimed at meeting the specific investment objective Most funds are valued daily, which is then used to calculate the net asset value per share (NAVPS), the price at which you buy and sell units of the fund

6. 6 WHAT IS ASSET ALLOCATION? A process in which you divide your investment money over the three main asset classes: equities, fixed income and cash CashEquities Fixed Income

7. 7 WHAT IS A PROSPECTUS? A prospectus is an owner’s manual It is a legal document that the mutual fund company must file with securities regulators and update each year

8. 8 TYPES OF MUTUAL FUNDS EQUITY FUNDS INCOME FUNDS ASSET ALLOCATION AND BALANCED FUNDS 1 2 3

9. 9 TYPES OF MUTUAL FUNDS Invest in a mix of stocks, bonds, and cash Geared to investors looking for a mix of safety, income and growth Include life-cycle or target-date funds and fund of funds ASSET ALLOCATION AND BALANCED FUNDS

10. 10 TYPES OF MUTUAL FUNDS Invest primarily in treasury bills, bonds and preferred shares For investors looking for a fixed/steady level of income Market values based on: bond yield, interest rate movements, time to maturity, credit quality, currency INCOME FUNDS

11. 11 TYPES OF MUTUAL FUNDS Invest mostly in shares of publicly traded companies Designed for investors seeking higher growth potential Often categorized according to: market capitalization, industry sector, geographic region, investing discipline EQUITY FUNDS

12. 12 HOW DO I MAKE MONEY ON A MUTUAL FUND? INCOME DISTRIBUTIONS CAPITAL GAINS DISTRIBUTIONS CAPITAL GROWTH 1 2 3

13. 13 MUTUAL FUND FEES 1. Management expenses Management expense ratio (MER) Performance fees 2. Sales fees Front-load fees Deferred sales charges (DSCs) Low-load fees No-load fees 3. Special fees THREE CATEGORIES OF FEES:

14. 14 TAXES ON MUTUAL FUNDS The way you are taxed depends on if you invest in a tax-sheltered plan Sheltered (i.e.: RRSPs) – you do not pay tax until you withdraw money from your plan

15. 15 TAXES ON MUTUAL FUNDS Unsheltered – taxed when you make money through: Capital Growth Capital Gains Distribution Income Distributions

16. 16 TAX SHELTERING RRSPs RRIF SFA Registered Retirement Savings Plan Registered Retirement Income Fund Tax Free Savings Account

17. 17 UNDERSTANDING RISK Risk = the chance of losing your money There are many types of investment risk: currency, liquidity, concentration, political, capital loss, etc. The more diversified your portfolio, the less likely you will suffer a net capital loss Trying to avoid risk altogether may prevent you from realizing the best returns

18. 18 HOW IS MY MONEY PROTECTED? Mutual fund manufacturers in Canada are required to adhere to the rules and regulations set out by provincial regulators Mutual fund dealers must belong to either IIROC or MFDA All mutual fund companies in Canada are required to create an Independent Review Committee to protect the interests of unitholders

19. 19 HOW CAN I TRACK MY FUND’S PERFORMANCE? Can be tracked through an online investment account, on the website of your mutual fund company, or through most major newspapers Many companies will provide statements and periodic updates to unitholders to make tracking performance easier

20. 20 TRACKING PERFORMANCE Fund namePrice $ 1 day $ chg 30 day %3 mo %6 mo %1 yr %3 yr % Inception (mm/yy) Dynamic ABC Fund 36.4900.2204.12.11.912.90.7 11.5 (10/85) Dynamic XYZ Fund 24.0400.0006.64.18.325.78.9 18.2 (09/98)

21. 21 TRACKING PERFORMANCE Fund nameAsset classAssets ($M)MER % Sales charge Minimum investment RSP Dynamic ABC Fund Canadian Focused Equity 1731.52.4DSC500Yes Dynamic XYZ Fund Natural Resources Equity 638.32.7DSC500Yes

22. 22 TRACKING PERFORMANCE Fund name Star rating 1 yr %3 yr %5 yr %10 yr %15 yr %Status Inception (mm/yy) Dynamic ABC Fund ★★★★★ 12.90.78.68.59.5– 11.5 (10/85) Dynamic XYZ Fund ★★★★★ 25.78.918.821.4–– 18.2 (09/98)

23. 23 HOW DO I BUY A MUTUAL FUND? It is recommended you go through a Financial Advisor, but mutual funds can also be purchased directly from a discount brokerage Can be purchased with lump sums or with regular contributions Units you buy are priced daily at the net asset value per share (NAVPS)

24. 24 HOW LONG SHOULD I HOLD A MUTUAL FUND? APPETITE FOR RISK FINANCIAL PLAN TIME HORIZON FUND TYPE FOUR CONSIDERATIONS: 3 2 1 4

25. 25 HISTORY OF DYNAMIC FUNDS Dynamic Funds traces its roots back more than 50 years One of the first companies in Canada to offer professional investment management Dynamic Funds offers funds for every type of investor, managed by top portfolio managers in their fields

26. 26 CONTACT INFO Contact me and I’ll show you how to make mutual funds part of your diversified investment portfolio Name Title Phone E-mail

27. 27 IMPORTANT INFORMATION Important Information Information contained herein is provided for information purposes only and should not be relied upon exclusively as estate, tax planning or investment advice, nor should it be construed as being specific to an individual’s investment objectives, financial situation or particular needs. You should always obtain professional advice before acting on the basis of material contained herein. While Dynamic Funds® will endeavour to update this information from time to time as needed, information can change without notice and Dynamic Funds® does not guarantee the accuracy or completeness of this information, including information provided by third parties, at any particular time, nor does it accept any responsibility for any loss or damage that results from any information contained herein.

28. Thank You!