1. Past performance of mutual fund is not necessarily an indication of future performance and therefore future performance cannot be guaranteed.
    
2. Investment in mutual funds is not covered by the Canada Deposit Insurance Corporation.
    
3. Although generally liquid investments, mutual funds are normally considered long-term investments and their market value will fluctuate.
    

• FRONT-LOAD FUNDS - Funds that are sold on sales charge basis ("front-end funds") require the deduction of sales commission from the amount of your purchase order. The net amount of your investment is the invested in securities of the fund at net asset value
   
• DEFERRED-LOAD FUNDS - Funds that are sold without an initial sales charge require no deduction from the amount of your purchase order at the time of purchase but your investment may be subject to a redemption charge if the securities that you purchase are redeemed within a specific time after purchase. Under the deferred charge method of purchase the distributing or carrying dealer receives a sales commission at the time of purchase arranged by the fund sponsor.
   
• SERVICE FEES (Trailer Commissions) - Service fees or trailer commissions are generally paid by a fund sponsor to a dealer as long as the dealer's clients maintain their investments in the fund. Services fees encourage dealers to provide on-going services to their clients after the date of purchase, for which no sales commissions would otherwise be received. Some fund sponsors do not pay service fees to dealers.
   
• OTHER SALES INCENTIVES - Many fund sponsors also provide additional sales incentives compensations to dealers to promote distribution of their sponsored funds. Common sales incentives include: marketing support programs providing for reimbursement of advertising or promotional expenses incurred in the solicitation of fund sales; sales conferences and educational programs held at location requirements of the Mutual Fund Sales Practice Code and the Rules of the Mutual Fund Dealers Association of Canada.
   

For example, if $100,000 of funds are purchased and paid for with $25,000 from available cash (your money) and $75,000 from borrowings and the value of your fund shares declines by 10% to $90,000 your equity interest (the difference between the value of your fund shares and the amount borrowed) has declined by 40% i.e. from $25,000 to $15,000.

It is important that an investor proposing to borrow for the purchase of securities be aware that a purchase with borrowed monies involves greater risk than a purchase using cash resources only.

To what extent a leveraged purchase involves undue risk is a determination to be made by each purchaser and will vary depending on the circumstance of the purchaser and the securities purchased.

It is also important that the investor be aware of the terms of a loan secured by securities. The lender may require that the amount outstanding on the loan not rise above an agreed percentage of the market value of the securities. Should this occur, the borrower must pay down the loan or sell the securities so as to return the loan to the agreed percentage relationship. In our example above, the lender may require that the loan not exceed 75% of the market value of the mutual fund units. On a decline of value of the units to $90,000, the borrower must reduce the loan to $67,500 (75% of the $90,000). If the borrower does not have cash available they must sell units at a loss to provide money to reduce the loan.

Money is, of course, also required to pay interest on the loan. Under these circumstances, investors who use borrowed funds to purchase their investments are advised to have adequate financial resources available both to pay the interest and also to reduce the loan if borrowing arrangements require such a payment.