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F O R M O R E I N F O R M A T I O N A B O U T

ScotiaFunds™

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1 800 268-9269 (English) 1 800 387-5004 (French)

scotiafunds.com or visit any branch of Scotiabank,

Scotiatrust or ScotiaMcLeod.

® Registered trade-mark of The Bank of Nova Scotia, used under licence.

™ Trade-mark of The Bank of Nova Scotia, used under licence.

The ScotiaFunds are managed by Scotia Asset Management L.P. Scotia Securities Inc. and Scotia Captial Inc. are corporate entities separate from, although wholly-owned by, The Bank of Nova Scotia. ScotiaMcLeod and ScotiaMcLeod Direct Investing and Scotia iTRADE are divisions of Scotia Capital Inc. Member CIPF.

“Standard & Poor’s®”, “S&P®”, and “S&P 500” are trademarks of The McGraw-Hill Companies and have been licensed for use by The Bank of Nova Scotia and its subsidiary companies. “TSX” is a trademark of The Toronto Stock Exchange and has been licensed for use by The Bank of Nova Scotia and its subsidiary companies. The Nasdaq 100 Index is published by the Nasdaq Stock Market, Inc. The Nasdaq Stock Market, Inc. has no connection with Scotia Securities Inc. and has not passed upon the merits of investing in the Scotia Mutual Funds.

December 31, 2009

Investing for the long termScotiaFunds Annual Reportto Unitholders

Tableof Contents

1 Economic Outlook

Financial Statements

Cash Equivalent Funds3 Scotia T-Bill Fund5 Scotia Premium T-Bill Fund7 Scotia Money Market Fund

12 Scotia U.S. $ Money Market Fund

Income Funds15 Scotia Short-Mid Government Bond Fund18 Scotia Mortgage Income Fund21 Scotia Bond Fund24 Scotia Canadian Income Fund28 Scotia Canadian Corporate Bond Fund32 Scotia U.S. $ Bond Fund35 Scotia Global Bond Fund

Balanced Funds39 Scotia Advantaged Income Fund44 Scotia Diversified Monthly Income Fund49 Scotia Canadian Balanced Fund56 Scotia Canadian Tactical Asset Allocation

Fund

Equity Funds

Canadian Equity Funds69 Scotia Canadian Dividend Fund73 Scotia Canadian Blue Chip Fund77 Scotia Canadian Equity Fund80 Scotia Canadian Growth Fund84 Scotia Canadian Small Cap Fund88 Scotia Resource Fund92 Scotia North American Equity Fund96 Scotia Cyclical Opportunities Fund

U.S. Equity Funds100 Scotia U.S. Equity Fund104 Scotia U.S. Growth Fund108 Scotia U.S. Value Fund

International Equity Funds111 Scotia International Equity Fund116 Scotia International Value Fund119 Scotia European Fund123 Scotia Pacific Rim Fund127 Scotia Latin American Fund

Global Equity Funds130 Scotia Global Growth Fund134 Scotia Global Small Cap Fund138 Scotia Global Opportunities Fund142 Scotia Global Climate Change Fund

Index Funds145 Scotia Canadian Bond Index Fund157 Scotia Canadian Index Fund161 Scotia U.S. Index Fund167 Scotia CanAm» Index Fund170 Scotia Nasdaq Index Fund173 Scotia International Index Fund

Scotia Portfolios

Scotia Selected@ Portfolios177 Scotia Selected Income & Modest

Growth Portfolio179 Scotia Selected Balanced Income &

Growth Portfolio181 Scotia Selected Moderate Growth Portfolio183 Scotia Selected Aggressive Growth

Portfolio

Scotia Partners Portfolios@185 Scotia Partners Income & Modest

Growth Portfolio187 Scotia Partners Balanced Income &

Growth Portfolio189 Scotia Partners Moderate Growth Portfolio191 Scotia Partners Aggressive

Growth Portfolio

Scotia Vision@ Portfolios193 Scotia Vision Conservative 2010 Portfolio195 Scotia Vision Aggressive 2010 Portfolio197 Scotia Vision Conservative 2015 Portfolio199 Scotia Vision Aggressive 2015 Portfolio201 Scotia Vision Conservative 2020 Portfolio203 Scotia Vision Aggressive 2020 Portfolio205 Scotia Vision Conservative 2030 Portfolio207 Scotia Vision Aggressive 2030 Portfolio

Scotia INNOVA PortfoliosTM

209 Scotia INNOVA Income Portfolio211 Scotia INNOVA Balanced Income Portfolio213 Scotia INNOVA Balanced Growth Portfolio215 Scotia INNOVA Growth Portfolio217 Scotia INNOVA Maximum Growth Portfolio

219 Notes to Financial Statements

231 Auditor’s Report

Globaleconomicoverview

Warren Jestin

Senior Vice-Presidentand Chief EconomistScotiabank Group

From Recession to RecoveryThe global recovery has achieved lift-off, led by China and a number ofemerging nations. The U.S. and otherdeveloped economies also shouldbecome fully airborne in the monthsahead, fuelled by unprecedentedmonetary and fiscal stimulus set inmotion in 2009, the revival of con-sumer spending and the re-ignition ofproduction as firms react to improv-ing sales prospects. However, a leg-acy of high unemployment andstructural weakness in key sectorssuch as housing and financial servicespoints to a bumpy ride during 2010and a relatively low-altitude globalgrowth trajectory into the nextdecade.

Domestic economic conditions havebeen more resilient in Canada than inthe U.S., in large part because of theworld-class strength of our financialsector and relatively stronger house-hold, corporate and government bal-ance sheets. Canada experienced onlyabout half the rate of job lossrecorded south of the border duringthe downturn and has lead the U.S. ina return to job creation. These factorshave supported a rebound in con-sumer spending and the revival ofCanada’s housing market, where buy-ers have been taking advantage ofhistorically low interest rates at a timewhen U.S. residential activity is stillmired in recession.

At the same time, Canadianexporters have faced heavy head-winds, with sales receipts going intothe final quarter of 2009 down morethan 25% from the previous year.Commodity producers are beginningto benefit from a rebound in globalmarkets but, with three-quarters ofexternal sales going to the U.S., thepace of recovery will be subdued.The rise in the loonie to 95 cents(US) – in part, reflecting the recentrebound in energy and industrialresource prices – also has undercutcompetitiveness and squeezed earn-ings. More of the same could be instore if our currency moves to parityor beyond.

The pathways from recession torecovery vary significantly betweenCanada and the U.S., but both nationswill benefit as previously announcedpublic infrastructure projects get fullyunderway. Canadian and U.S. motorvehicle producers are gearing up toreplenish depleted dealer inventoriesnow that sales have begun to recover.The impetus from these temporaryfactors will help both economies gainaltitude during the first half of 2010.

While there is a risk of economicrelapse as governments beginunwinding unprecedented monetaryand fiscal support, the broadening ofglobal growth across sectors andregions should sustain the recoverythrough 2010. In Canada and theU.S., however, this year’s growth willdo little more than backfill the holecreated by the steep decline in activ-ity during 2008-09. Even this modestperformance will compare favourablywith trends in Europe and Japan,where economic retrenchment hasbeen much deeper and the timetablefor regaining lost GDP will stretchbeyond 2010.

Lingering structural impedimentswill keep the U.S. and other devel-oped nations on a lower flight path in2011. Regulatory reforms and tighterlending practices will restrict leverageand raise funding costs for higher-riskactivities. In the U.S., excess capacityand refinancing challenges point to alengthy recuperation for housingactivity and non-residential construc-tion. The U.S. consumer won’t returnto previous high-altitude spendingpatterns because the ’borrow-to-buy’impetus has given way to debt repay-ment and a rebuilding of savings aftera 20% drop in household net worthsince mid-2007. Spending enthusiasmalso is being tempered by high unem-ployment and consumer bankruptcyrates.

These factors will impede progressin reversing Washington’s $1.4 trilliondeficit, which is equivalent to about10% of U.S. GDP. Although the tax-payer cost of the Troubled AssetRelief Program (TARP) has beenrevised lower, other expenses,

S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9

1

including the Afghanistan campaign,are on the rise. Without additionalFederal aid, State and Local govern-ment fiscal constraints will impose anincreasing drag on the recovery. Alllevels of government also are con-fronted with the need to devoteincreasing resources to health care,welfare programs and environmentalremediation.

With developed nations locked ona relatively low growth trajectory,China and other fast-growing emerg-ing markets will provide a large shareof global locomotion. Even in a yearwhen global output shrank by over2%, China grew by nearly 9% in2009. Vehicle sales in China sur-passed U.S. levels in 2009 and haveset new records in India and Brazil.Trade flows among Asian nations arealready double NAFTA levels.

Even with inflation held back bylingering excess capacity in a widerange of industries, interest rates willrise in the second half of 2010 as

central banks begin easing up on themonetary accelerator, with the U.S.Federal Reserve and the Bank ofCanada likely to raise rates by 2 per-centage points or more by mid-2011.Bond yields may move up evensooner as the recovery resuscitatesconsumer and business borrowing ata time of unprecedented governmentdebt issuance.

Currency markets will stay quitevolatile, with the U.S. dollar vulnera-ble to periodic bouts of weakness aseconomic growth takes hold andinvestors diversify away from U.S.asset positions accumulated duringthe financial crisis. Gold purchases bycentral banks in Russia, China andIndia highlight the quest for invest-ment diversification. Nervousnessabout continuing to underwrite Wash-ington’s fiscal deficit will also increasethe longer it is stuck above the $1trillion threshold. Adding to investorconcerns will be a renewed wideningof the U.S. trade deficit as a revival in

consumer spending and rising energyprices push up import costs.

Despite these negatives, the U.S.dollar is not about to lose its statusas the world’s reserve currency. Themain alternatives – the Euro, Sterlingand Yen – represent regions with eco-nomic and financial challenges rival-ling or exceeding those in the UnitedStates. China and other countrieswith large U.S. dollar foreignexchange reserves have a vestedinterest in tempering U.S. dollarweakness to forestall big currency-related losses on their financial assetsas well as for competitive reasons.The net result – the U.S. dollar willlikely exhibit wide swings but onlylimited depreciation through 2010-11.The countries with the greatestpotential for currency appreciationagainst the greenback are the smaller,commodity-producing countries likeCanada and Australia.


2

“Domestic economic conditions have been moreresilient in Canada than in the U.S., in largepart because of the world-class strength of ourfinancial sector and relatively stronger household,corporate and government balance sheets.”

Warren JestinSenior Vice-President and Chief Economist, Scotiabank Group

Scotia T-Bill FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $162,930,780 $196,072,472Cash 99,516 99,889Accrued investment income 4,293 9,259

163,034,589 196,181,620

LIABILITIESDistributions payable – 1,336Accrued expenses – 190,555

– 191,891

Net Assets $163,034,589 $195,989,729

NET ASSETS PER CLASSClass A Units $163,034,589 $195,989,729

UNITS OUTSTANDINGClass A Units 16,303,459 19,598,973

NET ASSETS PER UNITClass A Units $ 10.00 $ 10.00

S T AT E M E N T O F O P E R AT I O N SFor the periods ended December 31,

2009 2008INVESTMENT INCOMEInterest $1,208,326 $5,129,082Securities lending 47,284 43,029

1,255,610 5,172,111

EXPENSESManagement fees (note 4) 1,012,379 1,825,048Audit fees 17,461 15,066Independent Review Committee fees 1,657 1,686Custodian fees 3,216 6,195Filing fees 23,047 21,826Legal fees 12,228 9,048Unitholder reporting costs 46,494 49,968Unitholder administration, service fees and GST 430,641 504,388

1,547,123 2,433,225Absorbed expenses (472,909) (401,946)

1,074,214 2,031,279

Net investment income (loss) 181,396 3,140,832

Increase (decrease) in Net Assets from operations $ 181,396 $3,140,832

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 181,396 $3,140,832

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.01 $ 0.17

S TA T E M E N T O F C H A N G E S I N N E T A S S E T SFor the periods ended December 31,

2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $195,989,729 $ 172,961,727

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 181,396 3,140,832

DISTRIBUTIONS TO UNITHOLDERSFrom net investment income

Class A Units (181,396) (3,140,832)

UNIT TRANSACTIONSProceeds from issue

Class A Units 63,836,938 123,868,896Reinvested distributions

Class A Units 179,856 3,101,459Payments on redemption

Class A Units (96,971,934) (103,942,353)

(32,955,140) 23,028,002

INCREASE (DECREASE) IN NET ASSETSClass A Units (32,955,140) 23,028,002

NET ASSETS – END OF PERIODClass A Units $163,034,589 $ 195,989,729

S TA T E M E N T O F I N V E S T M E N T P O R T F O L I OAs at December 31, 2009

FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 99.9%Treasury Bills – 71.7%

28,195,000 Government of Canada0.21% due Jan. 7, 2010 28,183,570 28,194,013


30,065,000 Government of Canada0.18% due Feb. 4, 2010 30,054,478 30,059,889

19,880,000 Government of Canada0.22% due Apr. 1, 2010 19,866,680 19,869,297

116,815,423 116,853,226

Short-Term Bonds – 28.2%1,600,000 Alberta Municipal Finance Corporation (Floating Rate)

0.46% due Dec. 8, 2011 1,600,000 1,600,46513,200,000 Canada Housing Trust No. 1

3.55% due Sep. 15, 2010 13,468,511 13,607,02013,720,000 Financement Quebec (Floating Rate)

0.38% due Apr. 25, 2012 13,661,182 13,670,6212,650,000 Province of Manitoba (Floating Rate)

0.43% due Jun. 2, 2011 2,648,279 2,649,1972,500,000 Province of Manitoba (Floating Rate)

0.46% due May 2, 2012 2,485,840 2,487,695800,000 Province of Manitoba (Floating Rate)

0.83% due Sep. 4, 2012 806,583 807,1188,954,000 Province of Quebec (Floating Rate)

0.51% due Aug. 6, 2011 8,939,681 8,946,4392,200,000 Province of Saskatchewan

10.00% due Jan. 18, 2010 2,209,759 2,308,999

45,819,835 46,077,554

TOTAL INVESTMENT PORTFOLIO 162,635,258 162,930,780

OTHER ASSETS, LESS LIABILITIES – 0.1% 103,809

NET ASSETS – 100.0% 163,034,589


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The accompanying notes are an integral part of the financial statements.

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S U M M A R Y O F I N V E S T M E N T P O R T F O L I O

Investment Category December 31, 2009 December 31, 2008

Percentage of Net Assets (%)

Treasury Bills 71.7 74.1Promissory Notes – 0.7Commercial Paper – 1.9Short-Term Bonds 28.2 23.3

F A I R V A L U E C L A S S I F I C AT I O N ( n o t e 2 )

AssetsQuoted prices in activemarkets for identicalassets (Level 1) ($)

Significant otherobservable inputs

(Level 2) ($)

Significantunobservable

inputs (Level 3) ($) Total ($)

Money Market Instruments – 162,930,780 – 162,930,780

Total Investments – 162,930,780 – 162,930,780

D I S C U S S I O N O F F I N A N C I A L I N S T R U M E N T R I S KAs at December 31, 2009

A. Risk managementThe investment objective of the Scotia T-Bill Fund (the “Fund”) is to provideincome and liquidity, while maintaining a high level of safety. It invests primarilyin Government of Canada Treasury Bills and other short-term debt instrumentsguaranteed by the Government of Canada.

Managing risk is among the most important factors in the portfolio managementprocess, guiding investment decisions made for the Fund. The Fund’sinvestment practice includes portfolio monitoring to ensure compliance withstated investment guidelines. The Manager seeks to minimize potential adverseeffects of risks on the Fund’s performance by employing and overseeingprofessional and experienced portfolio advisors that regularly monitor theFund’s securities and financial market developments.

B. Liquidity riskThe Fund’s exposure to liquidity risk arises primarily from the daily cashredemption of units. The Fund primarily invests in securities that are traded inactive markets and can be readily disposed. In addition, the Fund aims to retainsufficient cash and cash equivalent positions to maintain liquidity, and has theability to borrow up to 5% of its Net Asset Value for the purpose of fundingredemptions. Any illiquid securities are identified in the Statement ofInvestment Portfolio.

C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than Canadian dollars, which is the Fund’s reporting currency,will fluctuate due to changes in exchange rates. As at December 31, 2009 andDecember 31, 2008, the Fund did not have a significant exposure to currencyrisk.

D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments. The Fundhas minimal sensitivity to changes in interest rates due to the short-term natureof instruments held.

The table below summarizes the Fund’s exposure to interest rate risk byremaining term to maturity and interest rate reset, where applicable, of theFund’s portfolio of debt instruments.

Bonds andshort-term notes*

December 31, 2009($)


Less than 1 year 162,930,780 196,072,4721-3 years – –3-5 years – –5-10 years – –H 10 years – –

Total 162,930,780 196,072,472

* Excludes cash

E. Credit riskCredit risk is the risk that the counterparty of a financial instrument will fail todischarge an obligation or commitment that it has entered into with the Fund.The Fund’s main credit risk is concentrated in debt securities. All investmenttransactions are settled (paid for) upon delivery using approved brokers. Therisk of default is considered minimal, as delivery of securities sold is only madeonce the broker has received payment. Payment is only made on a purchaseonce the securities have been received by the broker.

Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. The market value of debt instruments includesconsideration of the creditworthiness of the issuer, and accordingly, representsthe maximum credit risk exposure to the Fund.

The Fund enters into securities lending transactions with counterpartieswhereby the Fund temporarily exchanges securities for collateral with acommitment by the counterparty to deliver the same securities on a futuredate. Credit risk associated with these transactions is considered minimal as allcounterparties have a sufficient, approved credit rating and the market value ofcash or securities held as collateral must be at least 102% of the fair value ofthe securities loaned as at the end of each trading day.

Debt instruments, excluding cash, held by the Fund have credit ratings asfollows:

Percentage ofTotal Debt

Securities (%)Percentage of

Net Assets (%)



Net Assets (%)

December 31, 2009 December 31, 2008

Short-Term RatingR1-High 71.7 71.7 73.4 73.4R1-Middle – – 2.6 2.6R1-Low – – 0.7 0.7Bond Credit RatingAAA 9.4 9.3 17.5 17.5AA 1.4 1.4 2.6 2.6A 17.5 17.5 3.2 3.2

Total 100.0 99.9 100.0 100.0

F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). As at December 31, 2009 and December 31,2008, the Fund did not have significant exposure to other price risks.

S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9C

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Scotia T-Bill Fund (Continued)

S T AT E M E N T O F I N V E S T M E N T P O R T F O L I O

Scotia Premium T-Bill FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $854,111,379 $1,001,204,867Cash 103,613 80,064Accrued investment income 22,405 48,574Receivable for management fees rebate 173,211 –

854,410,608 1,001,333,505

LIABILITIESDistributions payable 4,352 67,481Accrued expenses – 291,794

4,352 359,275

Net Assets $854,406,256 $1,000,974,230

NET ASSETS PER CLASSClass A Units $854,406,256 $1,000,974,230





6,390,752 29,136,032

EXPENSESManagement fees, net of rebates (note 4) 2,025,027 2,958,129Audit fees 24,296 20,749Independent Review Committee fees 222 228Custodian fees 10,846 28,259Filing fees 35,374 35,071Legal fees 5,396 4,528Unitholder reporting costs 12,806 13,782Unitholder administration, service fees and GST 195,860 245,832


2,196,331 3,296,856

Net investment income (loss) 4,194,421 25,839,176

Increase (decrease) in Net Assets from operations $4,194,421 $25,839,176

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $4,194,421 $25,839,176



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $1,000,974,230 $ 1,011,167,581

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 4,194,421 25,839,176


Class A Units (4,194,421) (25,839,176)


Class A Units 599,147,355 1,019,931,061Reinvested distributions

Class A Units 4,200,475 24,961,884Payments on redemption

Class A Units (749,915,804) (1,055,086,296)

(146,567,974) (10,193,351)

INCREASE (DECREASE) IN NET ASSETSClass A Units (146,567,974) (10,193,351)

NET ASSETS – END OF PERIODClass A Units $ 854,406,256 $ 1,000,974,230

S TA T E M E N T O F I N V E S T M E N T P O R T F O L I OAs at December 31, 2009


AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 100.0%Treasury Bills – 71.4%



195,685,000 Government of Canada0.18% due Feb. 4, 2010 195,616,510 195,651,734

112,490,000 Government of Canada0.22% due Apr. 1, 2010 112,414,632 112,429,436

610,093,177 610,271,913

Short-Term Bonds – 28.6%8,600,000 Alberta Capital Finance Authority (Floating Rate)

0.46% due Dec. 8, 2011 8,600,000 8,602,50067,800,000 Canada Housing Trust No. 1

3.55% due Sep. 15, 2010 69,179,169 69,890,60182,730,000 Financement Quebec (Floating Rate)

0.38% due Apr. 25, 2012 82,367,279 82,424,19413,850,000 Province of Manitoba (Floating Rate)

0.43% due Jun. 2, 2011 13,841,004 13,845,80212,500,000 Province of Manitoba (Floating Rate)

0.46% due May 2, 2012 12,429,201 12,438,4774,200,000 Province of Manitoba (Floating Rate)

0.83% due Sep. 4, 2012 4,234,561 4,237,36946,350,000 Province of Quebec (Floating Rate)

0.51% due Aug. 6, 2011 46,278,180 46,313,1635,800,000 Province of Saskatchewan

10.00% due Jan. 18, 2010 5,825,729 6,087,360

242,755,123 243,839,466



NET ASSETS – 100.0% 854,406,256


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5




Treasury Bills 71.4 69.8Promissory Notes – 1.6Commercial Paper – 2.2Short-Term Bonds 28.6 26.4




(Level 2) ($)






A. Risk managementThe investment objective of the Scotia Premium T-Bill Fund (the “Fund”) is toprovide income and liquidity, while maintaining a high level of safety. It investsprimarily in Government of Canada Treasury Bills and other short-term debtinstruments guaranteed by the Government of Canada.









Less than 1 year 854,111,379 1,001,204,8671-3 years – –3-5 years – –5-10 years – –H 10 years – –

Total 854,111,379 1,001,204,867

* Excludes cash







Net Assets (%)



Net Assets (%)


Short-Term RatingR1-High 71.4 71.4 68.9 68.9R1-Middle – – 3.1 3.1R1-Low – – 1.6 1.6Bond Credit RatingAAA 9.2 9.2 20.7 20.7AA 0.7 0.7 2.2 2.2A 18.7 18.7 3.5 3.5

Total 100.0 100.0 100.0 100.0



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6

Scotia Premium T-Bill Fund (Continued)


Scotia Money Market FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $2,753,438,825 $2,105,558,116Cash 95,437 99,495Accrued investment income 178,412 203,830

2,753,712,674 2,105,861,441

LIABILITIESDistributions payable 27,903 14,185Accrued expenses – 1,078,562

27,903 1,092,747

Net assets $2,753,684,771 $2,104,768,694

NET ASSETS PER CLASSClass A Units $ 998,315,829 $1,040,858,259Advisor Class Units $ 7,269,580 $ 9,497,322Premium Class Units $ 557,115,939 $ 34,769,740Class I Units $ 11,781,019 $ 13,561,211Manager Class Units* $1,179,202,404 $1,006,082,162

UNITS OUTSTANDINGClass A Units 99,831,583 104,085,826Advisor Class Units 726,958 949,732Premium Class Units 55,711,594 3,476,974Class I Units 1,178,102 1,356,121Manager Class Units* 117,920,240 100,608,216

NET ASSETS PER UNITClass A Units $ 10.00 $ 10.00Advisor Class Units $ 10.00 $ 10.00Premium Class Units $ 10.00 $ 10.00Class I Units $ 10.00 $ 10.00Manager Class Units* $ 10.00 $ 10.00


2009 2008INVESTMENT INCOMEInterest $35,259,213 $69,729,885Securities lending 11 31

35,259,224 69,729,916

EXPENSESManagement fees (note 4) 11,564,577 10,248,486Audit fees 25,324 20,877Independent Review Committee fees 3,330 3,092Custodian fees 47,083 55,835Filing fees 113,767 73,639Legal fees 18,858 19,516Unitholder reporting 86,606 85,783Unitholder administration, service fees and GST 1,392,718 1,301,662


12,782,446 11,690,370



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 4,119,619 $25,711,910Advisor Class Units $ 37,594 $ 82,499Premium Class Units $ 2,739,329 $ 47,722Class I Units $ 184,619 $ 576,012Manager Class Units* $15,395,617 $31,621,403

INCREASE (DECREASE) FROM OPERATIONS PER UNITClass A Units $ 0.04 $ 0.26Advisor Class Units $ 0.04 $ 0.20Premium Class Units $ 0.11 $ 0.02Class I Units $ 0.14 $ 0.37Manager Class Units* $ 0.14 $ 0.37


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 1,040,858,259 $ 809,889,441Advisor Class Units 9,497,322 –Premium Class Units 34,769,740 –Class I Units 13,561,211 15,692,820Manager Class Units* 1,006,082,162 799,608,345

2,104,768,694 1,625,190,606

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 4,119,619 25,711,910Advisor Class Units 37,594 82,499Premium Class Units 2,739,329 47,722Class I Units 184,619 576,012Manager Class Units* 15,395,617 31,621,403

22,476,778 58,039,546


Class A Units (4,119,619) (25,711,910)Advisor Class Units (37,594) (82,499)Premium Class Units (2,739,329) (47,722)Class I Units (184,619) (576,012)Manager Class Units* (15,395,617) (31,621,403)

(22,476,778) (58,039,546)


Class A Units 1,123,559,640 1,418,476,151Advisor Class Units 15,559,934 18,059,913Premium Class Units 1,070,005,928 38,348,632Class I Units 4,805,480 2,410,862Manager Class Units* 2,338,534,761 1,667,106,132

Reinvested distributionsClass A Units 4,075,568 25,446,605Advisor Class Units 37,180 81,634Premium Class Units 2,604,268 47,719Class I Units 184,619 576,012Manager Class Units* 15,250,722 31,191,953

Payments on redemptionClass A Units (1,170,177,638) (1,212,953,938)Advisor Class Units (17,824,856) (8,644,225)Premium Class Units (550,263,997) (3,626,611)Class I Units (6,770,291) (5,118,483)Manager Class Units* (2,180,665,241) (1,491,824,268)

648,916,077 479,578,088

INCREASE (DECREASE) IN NET ASSETSClass A Units (42,542,430) 230,968,818Advisor Class Units (2,227,742) 9,497,322Premium Class Units 522,346,199 34,769,740Class I Units (1,780,192) (2,131,609)Manager Class Units* 173,120,242 206,473,817

648,916,077 479,578,088

TOTAL NET ASSETS – END OF PERIODClass A Units 998,315,829 1,040,858,259Advisor Class Units 7,269,580 9,497,322Premium Class Units 557,115,939 34,769,740Class I Units 11,781,019 13,561,211Manager Class Units* 1,179,202,404 1,006,082,162

$ 2,753,684,771 $ 2,104,768,694

* Scotia Private Client Units renamed Manager Class Units effective December 11, 2009.


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As at December 31, 2009


AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 100.0%Bankers’ Acceptances – 8.0%

24,000,000 Bank of Nova Scotia, The0.27% due Jan. 13, 2010 23,991,360 23,997,884

14,100,000 HSBC Bank of Canada0.29% due Jan. 5, 2010 14,098,449 14,099,557



55,000,000 Royal Bank of Canada0.25% due Jan. 4, 2010 54,987,350 54,998,872


40,000,000 Toronto-Dominion Bank, The0.24% due Jan. 5, 2010 39,993,100 39,998,933




221,851,981 221,890,391

Bearers’ Deposit Notes – 1.4%2,400,000 Bank of Montreal

0.28% due Jan. 4, 2010 2,399,616 2,399,9459,900,000 Bank of Montreal

0.27% due Jan. 5, 2010 9,896,832 9,899,7055,000,000 Bank of Montreal

0.28% due Jan. 26, 2010 4,997,550 4,999,04320,700,000 Manulife Bank of Canada

0.29% due Mar. 1, 2010 20,685,303 20,690,365

37,979,301 37,989,058

Commercial Paper – 30.0%1,700,000 Borealis Finance Trust

0.27% due Jan. 4, 2010 1,699,745 1,699,96235,100,000 Borealis Finance Trust




0.29% due Jan. 18, 2010 43,689,075 43,694,19614,000,000 CPPIB Capital Inc.




0.25% due Jan. 13, 2010 21,996,040 21,998,1728,000,000 Caterpillar Financial Services Limited




0.27% due Jan. 21, 2010 12,097,252 12,098,21114,989,000 Coca-Cola Enterprises Inc.

0.26% due Jan. 4, 2010 14,987,651 14,988,6767,346,000 Coca-Cola Enterprises Inc.

0.24% due Jan. 5, 2010 7,345,265 7,345,804


AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS (cont’d)Commercial Paper (cont’d)

15,000,000 Coca-Cola Enterprises Inc.0.24% due Jan. 6, 2010 14,998,500 14,999,500



4,200,000 Enbridge Inc.0.30% due Jan. 6, 2010 4,198,824 4,199,827



5,000,000 Honda Canada Finance Inc.0.26% due Jan. 4, 2010 4,999,350 4,999,892



15,000,000 Honda Canada Finance Inc.1.00% due Feb. 4, 2010 14,925,750 14,986,104

12,300,000 Honda Canada Finance Inc.0.65% due Mar. 9, 2010 12,260,545 12,285,377

60,000,000 Imperial Oil Limited0.25% due Jan. 22, 2010 59,987,400 59,991,465

2,200,000 Nova Scotia Power Inc.0.37% due Jan. 4, 2010 2,199,912 2,199,934






19,000,000 Shoppers Drug Mart Corporation0.27% due Jan. 8, 2010 18,995,060 18,999,012

10,700,000 Suncor Energy, Inc.0.41% due Jan. 14, 2010 10,696,790 10,698,454




12,000,000 Suncor Energy, Inc.0.40% due Feb. 5, 2010 11,988,000 11,995,385

18,000,000 Suncor Energy, Inc.0.40% due Feb. 23, 2010 17,981,820 17,989,527

18,600,000 TELUS Corporation0.34% due Jan. 6, 2010 18,592,174 18,599,129




4,000,000 TELUS Corporation0.34% due Feb. 2, 2010 3,997,600 3,998,800




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Scotia Money Market Fund (Continued)



AverageCost ($)

FairValue ($)


4,625,000 Terasen Gas Inc.0.27% due Jan. 4, 2010 4,624,861 4,624,896

10,000,000 Terasen Gas Inc.0.27% due Jan. 26, 2010 9,995,900 9,998,136

5,200,000 Toyota Credit Canada Inc.1.36% due Jan. 22, 2010 5,164,588 5,195,958

11,000,000 TransCanada PipeLines Limited0.31% due Feb. 24, 2010 10,991,530 10,994,974

4,900,000 TransCanada PipeLines Limited0.39% due Mar. 15, 2010 4,895,345 4,896,182



740,000 Woodbridge Finance Corporation0.39% due Jan. 6, 2010 739,719 739,961

5,725,000 Woodbridge Finance Corporation0.39% due Jan. 19, 2010 5,719,790 5,723,897

200,000 Woodbridge Finance Corporation0.39% due Jan. 20, 2010 199,816 199,959

3,000,000 Woodbridge Finance Corporation0.35% due Jan. 21, 2010 2,999,100 2,999,419

5,000,000 Woodbridge Finance Corporation0.39% due Feb. 8, 2010 4,996,300 4,997,962





12,000,000 Woodbridge Finance Corporation0.39% due Mar. 1, 2010 11,988,430 11,992,450

2,500,000 Woodbridge Finance Corporation0.39% due Mar. 8, 2010 2,497,575 2,498,241

824,819,517 825,108,729

Short-Term Bonds – 60.6%79,625,000 407 International Inc.

4.90% due Oct. 4, 2010 82,046,545 82,989,79726,951,000 Bank of Montreal

7.00% due Jan. 28, 2010 27,068,605 27,868,3482,371,000 Bank of Montreal (Floating Rate)

0.93% due Feb. 1, 2010 2,371,511 2,375,11862,200,000 Bank of Montreal (Floating Rate)

1.68% due Sep. 2, 2010 62,705,738 62,789,91223,300,000 Bank of Montreal (Floating Rate)

1.48% due Jul. 14, 2011 23,509,760 23,582,99318,913,000 Bank of Nova Scotia, The

5.00% due Sep. 13, 2010 19,472,907 19,757,64840,312,000 Bank of Nova Scotia, The (Floating Rate)

0.83% due Feb. 7, 2011 40,337,313 40,386,57829,200,000 Bank of Nova Scotia, The (Floating Rate)

1.25% due Jun. 15, 2011 29,432,610 29,448,7959,000,000 Bank of Nova Scotia, The (Floating Rate)

0.94% due Jun. 23, 2011 9,030,273 9,032,15429,000,000 Canadian Imperial Bank of Commerce (Floating Rate)

0.98% due Feb. 16, 2010 29,016,349 29,051,20435,185,000 Canadian Imperial Bank of Commerce

4.95% due Sep. 2, 2010 36,167,433 36,744,77746,700,000 Canadian Imperial Bank of Commerce (Floating Rate)

0.83% due Oct. 3, 2011 46,700,000 46,794,79620,000,000 Canadian Imperial Bank of Commerce (Floating Rate)

0.83% due Nov. 1, 2011 20,000,000 20,023,08560,700,000 CARDS II Trust (Floating Rate)

0.49% due Mar. 22, 2010 60,625,756 60,638,438


AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS (cont’d)Short-Term Bonds (cont’d)

71,965,000 CARDS II Trust3.87% due Oct. 15, 2010 73,513,378 74,102,368

7,514,000 Caterpillar Financial Services Limited4.34% due Dec. 6, 2010 7,755,287 7,777,685

1,126,000 City of Toronto6.25% due Aug. 3, 2010 1,161,811 1,190,497

2,500,000 City of Vancouver6.00% due Apr. 17, 2010 2,540,461 2,571,367

9,277,000 CU Inc.11.40% due Aug. 15, 2010 9,877,381 10,273,972

36,030,000 Enbridge Inc.3.95% due Feb. 15, 2010 36,102,420 36,636,115

13,244,000 Enbridge Inc.6.80% due Mar. 10, 2010 13,396,843 13,675,479

47,772,000 Epcor Utilities Inc.6.95% due Jun. 28, 2010 49,120,150 49,147,514

16,260,000 GE Capital Canada Funding Company (Floating Rate)0.88% due Feb. 12, 2010 16,219,960 16,239,074

49,194,000 GE Capital Canada Funding Company3.65% due Jun. 7, 2010 49,630,156 49,748,544

2,871,000 GE Capital Canada Funding Company (Floating Rate)0.50% due Jul. 21, 2010 2,846,843 2,847,230

12,000,000 General Electric Capital Corporation (Floating Rate)0.46% due Jan. 8, 2010 11,996,286 11,999,667

135,645,000 Genesis Trust4.00% due Mar. 15, 2010 136,149,001 137,753,562

96,578,000 Golden Credit Card Trust4.05% due Jun. 15, 2010 97,862,596 98,034,395

25,155,000 Greater Toronto Airports Authority (Floating Rate)0.54% due May 14, 2010 25,119,917 25,137,357

46,066,000 Greater Toronto Airports Authority6.70% due Jul. 19, 2010 47,445,997 48,829,852

9,340,000 Hollis Receivables Term Trust6.77% due Feb. 22, 2010 9,419,994 9,645,086

1,000,000 Honda Canada Finance Inc. (Floating Rate)0.53% due May 25, 2010 998,810 999,330

33,251,000 Honda Canada Finance Inc.5.31% due Nov. 30, 2010 34,575,551 34,725,835

1,534,000 HSBC Bank of Canada5.31% due Oct. 12, 2010 1,575,491 1,593,393

25,742,000 Hydro One Inc.7.15% due Jun. 3, 2010 26,448,711 26,590,292

22,900,000 John Deere Credit Inc.4.60% due Jan. 25, 2010 22,927,523 23,382,661

26,176,000 John Deere Credit Inc.4.45% due Apr. 16, 2010 26,414,932 26,658,139

12,590,000 John Deere Credit Inc.5.00% due Jul. 6, 2010 12,848,136 13,152,623

18,696,000 John Deere Credit Inc.5.25% due Oct. 18, 2010 19,332,528 19,532,072

39,895,000 Manulife Bank of Canada3.72% due Jun. 23, 2010 40,401,278 40,433,862

18,800,000 Manulife Bank of Canada (Floating Rate)0.78% due Oct. 14, 2010 18,800,000 18,831,195

77,200,000 National Bank of Canada (Floating Rate)0.70% due Jun. 4, 2010 77,206,783 77,245,768

27,904,000 NAV Canada (Floating Rate)0.49% due May 3, 2010 27,877,946 27,899,622

32,949,000 Nova Scotia Power Inc.4.22% due May 17, 2010 33,343,748 33,512,753

25,000,000 Province of Alberta (Floating Rate)0.69% due Jun. 12, 2012 25,000,000 25,009,066

5,000,000 Royal Bank of Canada (Floating Rate)0.80% due Sep. 27, 2010 5,011,748 5,012,178

18,333,000 Royal Bank of Canada (Floating Rate)0.84% due Sep. 27, 2010 18,366,109 18,367,823

10,000,000 Royal Bank of Canada (Floating Rate)1.38% due Jul. 17, 2011 10,105,989 10,134,172


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AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS (cont’d)Short-Term Bonds (cont’d)

25,343,000 Toronto-Dominion Bank, The (Floating Rate)0.88% due Nov. 19, 2010 25,416,632 25,442,167

34,800,000 Toronto-Dominion Bank, The (Floating Rate)1.38% due May 2, 2011 35,097,825 35,135,147

655,000 NOVA Gas Transmission Ltd.12.63% due Apr. 15, 2010 676,495 693,988

18,882,000 TransCanada PipeLines Limited10.50% due Aug. 20, 2010 20,016,193 20,732,734

19,171,000 Union Gas Ltd.7.20% due Jun. 1, 2010 19,679,071 19,792,834

51,400,000 Westcoast Energy Inc.7.20% due Jan. 26, 2010 51,600,174 53,189,103

22,310,000 Woodbridge Finance Corporation5.32% due Oct. 18, 2010 23,049,417 23,290,483

1,655,414,371 1,668,450,647

TOTAL INVESTMENT PORTFOLIO 2,740,065,170 2,753,438,825


NET ASSETS – 100.0% 2,753,684,771




Bankers’ Acceptances 8.0 8.1Bearers’ Deposit Notes 1.4 9.9Commercial Paper 30.0 39.3Term Deposits – 7.0Short-Term Bonds 60.6 35.7




(Level 2) ($)



Money Market Instruments – 2,753,438,825 – 2,753,438,825

Total Investments – 2,753,438,825 – 2,753,438,825


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10





A. Risk managementThe investment objective of the Scotia Money Market Fund (the “Fund”) is toprovide income and liquidity, while maintaining a high level of safety. It investsprimarily in high quality, short-term fixed income securities issued by Canadianfederal, provincial and municipal governments, Canadian chartered banks andtrust companies, and corporations.









Less than 1 year 2,753,438,825 2,105,558,1161-3 years – –3-5 years – –5-10 years – –H 10 years – –

Total 2,753,438,825 2,105,558,116

* Excludes cash







Net Assets (%)



Net Assets (%)


Short-Term RatingR1-High 14.2 14.2 26.8 26.8R1-Middle 9.9 9.9 19.3 19.3R1-Low 15.3 15.3 18.2 18.2Bond Credit RatingAAA 15.1 15.1 13.2 13.2AA 25.1 25.1 9.2 9.2A 20.4 20.4 13.0 13.0BBB – – 0.3 0.3

Total 100.0 100.0 100.0 100.0



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Scotia U.S. $ Money Market FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008

U.S.$ U.S.$ASSETSInvestments at fair value $113,509,865 $104,892,407Cash 99,313 97,531Accrued investment income 177,566 179,012

113,786,744 105,168,950

LIABILITIESDistributions payable – 545Accrued expenses – 101,957

– 102,502

Net Assets $113,786,744 $105,066,448





2009 2008

U.S.$ U.S.$INVESTMENT INCOMEInterest $ 739,898 $3,388,721

EXPENSESManagement fees (note 4) 602,025 1,220,937Audit fees 13,994 13,600Independent Review Committee fees 167 172Custodian fees 4,727 7,731Filing fees 20,312 19,090Legal fees 5,623 4,129Unitholder reporting costs 11,577 11,903Unitholder administration, service fees and GST 110,006 139,741

768,431 1,417,303Absorbed expenses (134,309) (84,040)

634,122 1,333,263



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 105,776 $2,055,458



2009 2008

U.S.$ U.S.$NET ASSETS – BEGINNING OF PERIODClass A Units $ 105,066,448 $ 103,452,736

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 105,776 2,055,458


Class A Units (105,776) (2,055,458)




Class A Units (123,189,975) (186,347,728)

8,720,296 1,613,712

INCREASE (DECREASE) IN NET ASSETSClass A Units 8,720,296 1,613,712

NET ASSETS – END OF PERIODClass A Units $ 113,786,744 $ 105,066,448


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As at December 31, 2009FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

U.S.$ U.S.$ U.S.$MONEY MARKET INSTRUMENTS – 99.7%Promissory Notes – 22.3%

4,500,000 Province of Ontario0.14% due Mar. 9, 2010 4,498,560 4,498,823

150,000 Province of Ontario0.14% due Mar. 17, 2010 149,955 149,956

3,400,000 Province of Ontario0.24% due Apr. 27, 2010 3,396,362 3,397,362

8,100,000 Province of Quebec0.11% due Jan. 7, 2010 8,099,433 8,099,858

1,930,000 Province of Quebec0.11% due Jan. 21, 2010 1,929,752 1,929,880

3,200,000 Province of Quebec0.13% due Mar. 8, 2010 3,199,072 3,199,244

4,100,000 Province of Quebec0.13% due Mar. 23, 2010 4,098,688 4,098,819

25,371,822 25,373,942

Bankers’ Acceptances – 7.4%1,000,000 Bank of Montreal

0.16% due Mar. 17, 2010 999,630 999,6701,800,000 Canadian Imperial Bank of Commerce

0.14% due Jan. 6, 2010 1,799,856 1,799,9661,500,000 Canadian Imperial Bank of Commerce

0.21% due Jan. 7, 2010 1,499,171 1,499,947900,000 Canadian Imperial Bank of Commerce

0.13% due Jan. 19, 2010 899,892 899,9431,200,000 Canadian Imperial Bank of Commerce

0.15% due Mar. 25, 2010 1,199,544 1,199,5892,000,000 Toronto-Dominion Bank, The

0.80% due Nov. 12, 2010 1,984,560 1,986,104

8,382,653 8,385,219

Bearers’ Deposit Notes – 24.7%14,500,000 Alberta Treasury Branch

0.16% due Feb. 1, 2010 14,495,974 14,498,0003,400,000 Bank of Montreal

0.16% due Mar. 18, 2010 3,398,640 3,398,8522,000,000 HSBC Bank Canada

0.20% due Mar. 1, 2010 1,999,180 1,999,3463,300,000 HSBC Bank Canada

0.20% due Mar. 15, 2010 3,298,317 3,298,6501,100,000 National Bank of Canada

0.20% due Jan. 6, 2010 1,099,428 1,099,9691,800,000 Royal Bank of Canada

0.21% due May 26, 2010 1,798,110 1,798,4781,000,000 Toronto-Dominion Bank, The

0.60% due Jan. 7, 2010 997,190 999,9001,063,000 Toronto-Dominion Bank, The

0.60% due Jan. 12, 2010 1,059,960 1,062,806

28,146,799 28,156,001

Commercial Paper – 17.9%1,900,000 Caterpillar Inc.

0.18% due Jan. 5, 2010 1,899,696 1,899,9623,300,000 Du Pont (E.I.) de Nemours & Company

0.39% due Jun. 15, 2010 3,290,628 3,294,1201,400,000 Export Development Canada

0.36% due Jun. 3, 2010 1,396,276 1,397,8663,600,000 Federal Home Loan Bank

1.01% due Feb. 23, 2010 3,563,600 3,594,700300,000 General Electric Company

0.19% due Feb. 22, 2010 299,916 299,9192,500,000 Province of Ontario

0.19% due Jan. 7, 2010 2,498,809 2,499,9211,400,000 Toronto-Dominion Bank, The

0.91% due Jan. 15, 2010 1,390,543 1,399,5083,000,000 Toyota Credit Canada Inc.

0.14% due Jan. 6, 2010 2,999,520 2,999,943300,000 Transcanada Keystone

0.45% due Jan. 19, 2010 299,658 299,932300,000 Transcanada Keystone

0.48% due Feb. 12, 2010 299,709 299,833


AverageCost ($)

FairValue ($)

U.S.$ U.S.$ U.S.$MONEY MARKET INSTRUMENTS (cont’d)Commercial Paper (cont’d)

2,430,000 Transcanada Keystone0.43% due Apr. 15, 2010 2,426,894 2,426,979

20,365,249 20,412,683

Short-Term Bonds – 27.4%1,600,000 American Honda Finance Corporation (Floating Rate)

0.37% due May 14, 2010 1,594,930 1,595,691500,000 Canada Mortgage & Housing Corp.

3.88% due Apr. 1, 2010 504,095 508,8851,200,000 Caterpillar Financial Services Limited (Floating Rate)

0.78% due Jun. 25, 2010 1,200,398 1,200,5274,200,000 Citigroup Inc. (Floating Rate)

0.38% due Jul. 30, 2010 4,209,148 4,211,841340,000 Export Development Canada

4.63% due Apr. 1, 2010 343,619 347,506500,000 FirstEnergy Corp. (Floating Rate)

0.77% due Aug. 19, 2010 501,191 501,6301,885,000 General Electric Capital Corporation (Floating Rate)

0.35% due Jan. 20, 2010 1,881,788 1,883,0942,500,000 John Deere Capital Corporation (Floating Rate)

0.71% due Feb. 26, 2010 2,501,003 2,502,681800,000 Pfizer Inc. (Floating Rate)

2.20% due Mar. 15, 2011 819,643 820,4273,000,000 Proctor & Gamble Company, The (Floating Rate)

0.53% due Feb. 8, 2010 3,001,560 3,003,8294,355,000 Province of Ontario (Floating Rate)

0.72% due May 22, 2012 4,386,688 4,390,7116,600,000 Province of Ontario (Floating Rate)

0.42% due Nov. 19, 2012 6,611,531 6,614,6983,600,000 Royal Bank of Canada (Floating Rate)

0.23% due Dec. 9, 2010 3,600,000 3,600,500

31,155,594 31,182,020



NET ASSETS – 100.0% 113,786,744




Treasury Bills – 18.4Promissory Notes 22.3 2.8Bankers’ Acceptances 7.4 7.2Bearers’ Deposit Notes 24.7 14.2Commercial Paper 17.9 57.2Short-Term Bonds 27.4 –


AssetsQuoted prices in activemarkets for identical

assets (Level 1) (U.S. $)

Significant otherobservable inputs(Level 2) (U.S. $)


inputs (Level 3) (U.S. $) Total (U.S. $)




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Scotia U.S. $ Money Market Fund (Continued)


Scotia U.S. $ Money Market Fund (Continued)


A. Risk managementThe investment objective of the Scotia U.S. $ Money Market Fund (the “Fund”)is to provide income and liquidity, while maintaining a high level of safety. Itinvests primarily in treasury bills and other money market instruments that aredenominated in U.S. dollars and are issued by Canadian federal, provincial andmunicipal governments and corporations, and by supranational entities, such asthe World Bank.



C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than U.S. dollars, which is the Fund’s reporting currency, willfluctuate due to changes in exchange rates. As at December 31, 2009 andDecember 31, 2008, the Fund did not have a significant exposure to currencyrisk.




December 31, 2009(U.S. $)



Total 113,509,865 104,892,407

* Excludes cash







Net Assets (%)



Net Assets (%)


Short-Term RatingR1-High 32.3 32.2 77.1 77.0R1-Middle 35.9 35.8 14.9 14.8R1-Low 4.3 4.3 8.0 8.0Bond Credit RatingAAA 4.5 4.5 – –AA 17.9 17.8 – –A 5.1 5.1 – –

Total 100.0 99.7 100.0 99.8



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Scotia Short-Mid Government Bond Fund(formerly, Scotia Cassels Short-Mid Government Bond Fund)

S T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $525,620,408 $328,558,088Cash 100,759 102,908Accrued investment income 3,077,504 1,952,348

528,798,671 330,613,344

LIABILITIESPayable for securities purchased 15,167,734 –Distributions payable 1,880 466Accrued expenses 21,274 36,420

15,190,888 36,886

Net Assets $513,607,783 $330,576,458

NET ASSETS PER CLASSClass I Units $ 21,618,045 $ –Manager Class Units* $491,989,738 $330,576,458

UNITS OUTSTANDINGClass I Units 2,072,499 –Manager Class Units* 47,156,785 31,612,967

NET ASSETS PER UNITClass I Units $ 10.43 $ –Manager Class Units* $ 10.43 $ 10.46


2009 2008INVESTMENT INCOMEInterest $15,161,983 $10,644,388Securities lending 6,398 –

15,168,381 10,644,388

EXPENSESManagement fees (note 4) 266,879 174,893Audit fees 22,437 16,902Custodian fees 5,253 9,263Filing fees 15,015 14,306Legal fees 4,760 3,875Unitholder reporting costs 7,611 8,119Unitholder administration, service fees and GST 52,316 50,013

374,271 277,371Absorbed expenses (6) (2,586)

374,265 274,785


Net realized gain (loss) on investments sold 2,917,781 2,593,518Change in unrealized appreciation (depreciation) of investments (4,296,611) 9,113,696

Net gain (loss) on investments and transaction costs (1,378,830) 11,707,214


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** $ 137,461 $ –Manager Class Units* $13,277,825 $22,076,817

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass I Units** $ 0.19 $ –Manager Class Units* $ 0.36 $ 0.90


2009 2008

NET ASSETS – BEGINNING OF PERIODManager Class Units* $ 330,576,458 $186,444,543

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** 137,461 –Manager Class Units* 13,277,825 22,076,817

13,415,286 22,076,817


Class I Units** (263,962) –Manager Class Units* (14,256,547) (10,018,123)

From realized gainClass I Units** (25,339) –Manager Class Units* (575,866) (2,013,763)

(15,121,714) (12,031,886)


Class I Units** 21,567,111 –Manager Class Units* 256,631,078 180,681,123

Reinvested distributionsClass I Units** 289,301 –Manager Class Units* 12,443,981 11,326,575

Payments on redemptionClass I Units** (86,527) –Manager Class Units* (106,107,191) (57,920,714)

184,737,753 134,086,984

INCREASE (DECREASE) IN NET ASSETSClass I Units** 21,618,045 –Manager Class Units* 161,413,280 144,131,915

183,031,325 144,131,915

NET ASSETS – END OF PERIODClass I Units** 21,618,045 –Manager Class Units* 491,989,738 330,576,458

$ 513,607,783 $330,576,458


** Start date January 20, 2009.


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S T AT E M E N T O F I N V E S T M E N T P O R T F O L I OAs at December 31, 2009


AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES – 99.1%Federal Bonds – 33.0%

15,960,000 Canada Housing Trust No. 14.05% due Mar. 15, 2011 16,629,131 16,553,803

119,900,000 Canada Housing Trust No. 13.95% due Dec. 15, 2011 126,097,110 125,319,913


171,188,951 169,802,255

Provincial Bonds – 66.1%19,700,000 Alberta Treasury Branches

4.40% due Dec. 3, 2012 19,873,590 20,894,82113,000,000 Alberta Treasury Branches

3.85% due Jun. 3, 2013 12,941,440 13,555,2648,000,000 Province of British Columbia

4.70% due Dec. 1, 2017 8,207,318 8,434,55164,080,000 Province of British Columbia

4.65% due Dec. 18, 2018 64,176,197 66,588,08447,400,000 Province of New Brunswick

4.50% due Feb. 4, 2015 49,207,277 50,361,92521,440,000 Province of Ontario

4.75% due Jun. 2, 2013 22,512,000 22,977,21089,965,000 Province of Ontario

4.20% due Mar. 8, 2018 90,816,889 91,244,11221,750,000 Province of Quebec

4.50% due Dec. 1, 2017 21,800,690 22,556,86741,920,000 Province of Quebec

4.50% due Dec. 1, 2018 42,705,966 42,834,791

332,241,367 339,447,625

TOTAL BONDS AND DEBENTURES 503,430,318 509,249,880

MONEY MARKET INSTRUMENTS – 3.2%16,375,000 Government of Canada Treasury Bills

0.16% to 0.17% due fromJan. 7, 2010 to Mar. 4, 2010 16,369,894 16,370,528


OTHER ASSETS, LESS LIABILITIES – (2.3%) (12,012,625)

NET ASSETS – 100.0% 513,607,783




Federal Bonds 33.0 19.7Provincial Bonds 66.1 77.4Money Market Instruments 3.2 2.3




(Level 2) ($)



Bonds and Debentures – 509,249,880 – 509,249,880Money Market Instruments – 16,370,528 – 16,370,528


S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9I

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Scotia Short-Mid Government Bond Fund (Continued)(formerly, Scotia Cassels Short-Mid Government Bond Fund)


A. Risk managementThe investment objective of the Scotia Short-Mid Government Bond Fund (the“Fund”) is to provide regular interest income and modest capital gains. Itinvests primarily in:

• Bonds and treasury bills issued or guaranteed by Canadian federal,provincial and municipal governments or any agency of such govern-ments; and

• Money market instruments of Canadian issuers. These include commer-cial paper, bankers’ acceptances, asset-backed or mortgage-backedsecurities and guaranteed investment certificates.


B. Liquidity riskThe Fund’s exposure to liquidity risk arises primarily from the daily cashredemption of units. The Fund primarily invests in securities that are traded inactive markets and can be readily disposed. In addition, the Fund aims to retainsufficient cash and cash equivalent positions to maintain liquidity, and has theability to borrow up to 5% of its Net Asset Value for the purpose of fundingredemptions. The Fund may, from time to time, enter into over-the-counterderivative contracts or invest in securities that are not traded in an activemarket and may be illiquid. Illiquid securities are identified in the Statement ofInvestment Portfolio.


D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $6,137,787, 1.2% of the Fund’s Net Assets(December 31, 2008-$2,936,076, 0.9% of the Fund’s Net Assets). The Fund’ssensitivity to interest rate fluctuations was estimated using the weightedaverage duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.

The table below summarizes the Fund’s exposure to interest rate risk byremaining term to maturity of the Fund’s portfolio of debt instruments.

Interest RateExposure*



Less than 1 year – –1-3 years 190,697,076 64,819,9033-5 years 36,532,475 114,758,1375-10 years 282,020,329 141,304,562H 10 years – –

Total 509,249,880 320,882,602

* Excludes cash and cash equivalents and preferred shares as applicable

E. Credit riskCredit risk is the risk that the counterparty of a financial instrument will fail todischarge an obligation or commitment that it has entered into with the Fund.All transactions in listed securities are settled (paid for) upon delivery usingapproved brokers. The risk of default is considered minimal, as delivery ofsecurities sold is only made once the broker has received payment. Payment isonly made on a purchase once the securities have been received by the broker.


Debt instruments, excluding cash and cash equivalents but including preferredshares, held by the Fund have credit ratings as follows:

Percentage ofTotal Fixed-

IncomeSecurities (%)

Percentage ofNet Assets (%)





AAA 40.1 39.8 51.4 49.9AA 37.2 36.8 21.7 21.0A 22.7 22.5 26.9 26.2

Total 100.0 99.1 100.0 97.1




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Scotia Short-Mid Government Bond Fund (Continued)(formerly, Scotia Cassels Short-Mid Government Bond Fund)


17

Scotia Mortgage Income Fund


2009 2008ASSETSInvestments at fair value $573,563,207 $425,687,140Cash 101,752 101,693Accrued investment income 1,749,590 1,137,144Subscriptions receivable 840,767 40,338Mortgage payments receivable 1,766,192 382,441

578,021,508 427,348,756

LIABILITIESDistributions payable 183 1,041Redemptions payable 649,114 88,837Accrued expenses 177,227 209,460

826,524 299,338

Net Assets $577,194,984 $427,049,418

NET ASSETS PER CLASSClass A Units $316,397,708 $161,209,737Class F Units $ 17,266,404 $ 3,372Class I Units $243,530,872 $265,836,309

UNITS OUTSTANDINGClass A Units 28,813,645 14,818,950Class F Units 1,577,974 310Class I Units 22,317,677 24,491,032

NET ASSETS PER UNITClass A Units $ 10.98 $ 10.88Class F Units $ 10.94 $ 10.87Class I Units $ 10.91 $ 10.85



22,168,660 22,467,389

EXPENSESManagement fees (note 4) 3,014,169 2,060,343Audit fees 21,617 18,394Independent Review Committee fees 908 837Custodian fees 2,066 2,452Filing fees 23,119 18,492Legal fees 27,835 6,415Unitholder reporting costs 30,044 28,881Unitholder administration, service fees and GST 439,873 383,652Mortgage service fees (note 9(b)) 1,536,549 1,433,312


5,093,522 3,744,280


Net realized gain (loss) on investments sold (138,928) (231,573)Change in unrealized appreciation (depreciation) of investments 3,241,676 9,494,093

Net gain (loss) on investments and transaction costs 3,102,748 9,262,520


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 7,668,440 $ 9,433,269Class F Units $ 133,064 $ 232Class I Units $12,376,382 $18,552,128

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.35 $ 0.62Class F Units $ 0.33 $ 0.69Class I Units $ 0.53 $ 0.74


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 161,209,737 $171,569,756Class F Units 3,372 3,744Class I Units 265,836,309 234,235,354

427,049,418 405,808,854

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 7,668,440 9,433,269Class F Units 133,064 232Class I Units 12,376,382 18,552,128

20,177,886 27,985,629


Class A Units (6,456,731) (5,612,671)Class F Units (100,148) (150)Class I Units (10,982,210) (12,796,000)

(17,539,089) (18,408,821)


Class A Units 191,151,050 8,601,322Class F Units 20,041,447 –Class I Units 75,831,207 46,361,380

Reinvested distributionsClass A Units 6,171,531 5,384,554Class F Units 96,914 150Class I Units 10,981,987 12,796,223

Payments on redemptionClass A Units (43,346,319) (28,166,493)Class F Units (2,908,245) (604)Class I Units (110,512,803) (33,312,776)

147,506,769 11,663,756

INCREASE (DECREASE) IN NET ASSETSClass A Units 155,187,971 (10,360,019)Class F Units 17,263,032 (372)Class I Units (22,305,437) 31,600,955

150,145,566 21,240,564

NET ASSETS – END OF PERIODClass A Units 316,397,708 161,209,737Class F Units 17,266,404 3,372Class I Units 243,530,872 265,836,309

$ 577,194,984 $427,049,418


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InterestRate (%) Number

PrincipalBalance ($)

AmortizedCost ($)

MarketValue ($)

CONVENTIONAL MORTGAGES – 90.7%0.00 – 0.24 1 62,207 59,787 60,3740.75 – 0.99 1 211,906 191,559 191,3191.00 – 1.24 2 178,958 172,533 173,9841.25 – 1.49 2 411,245 400,165 402,3301.50 – 1.74 2 142,779 138,629 140,4161.75 – 1.99 2 410,444 402,978 400,5522.00 – 2.24 2 282,182 273,967 275,9132.25 – 2.49 26 2,652,823 2,642,434 2,681,0242.50 – 2.74 3 331,782 331,251 328,0332.75 – 2.99 2 325,953 320,069 320,5403.00 – 3.24 46 6,613,692 6,566,828 6,600,8613.25 – 3.49 90 14,194,717 14,133,361 14,128,9303.50 – 3.74 485 61,309,413 61,269,838 61,293,2033.75 – 3.99 402 46,344,461 46,535,259 46,447,2864.00 – 4.24 309 31,730,748 31,884,859 31,955,7844.25 – 4.49 551 67,570,916 68,021,410 68,392,8434.50 – 4.74 386 45,204,486 45,487,138 45,702,7874.75 – 4.99 530 52,452,119 52,729,316 53,678,8715.00 – 5.24 419 44,431,765 44,913,896 45,866,6035.25 – 5.49 560 58,100,393 58,522,162 60,702,1295.50 – 5.74 400 39,373,199 39,577,694 41,300,2165.75 – 5.99 253 22,413,511 22,600,070 23,605,5266.00 – 6.24 100 6,321,616 6,377,586 6,631,4066.25 – 6.49 56 4,513,060 4,560,931 4,719,4706.50 – 6.74 54 4,585,498 4,633,434 4,755,1316.75 – 6.99 25 1,947,316 1,981,834 2,069,5697.00 – 7.24 13 515,521 522,301 535,1157.25 – 7.49 1 35,344 37,202 38,8178.00 – 8.24 1 82,370 83,551 85,779

TOTAL 4,724 512,750,424 515,372,042 523,484,811


AverageCost ($)

FairValue ($)


0.16% to 0.22% due fromFeb. 18, 2010 to Apr. 1, 2010 50,073,539 50,078,396


OTHER ASSETS, LESS LIABILITIES - 0.6% 3,631,777

NET ASSETS – 100.0% 577,194,984

M o r t g a g e s b y G e o g r a p h i c L o c a t i o nAs at December 31, 2009

ProvinceNumber ofMortgages


MarketValue ($)

Ontario 2237 251,545,873 256,654,000British Columbia 648 92,557,160 94,110,808Alberta 581 78,578,547 80,415,027Quebec 419 36,168,393 36,997,760Nova Scotia 248 16,764,001 17,187,087New Brunswick 153 8,310,447 8,564,144Newfoundland and Labrador 145 8,092,290 8,284,786Saskatchewan 119 9,097,364 9,291,078Manitoba 120 7,389,371 7,598,897Prince Edward Island 39 2,137,969 2,207,469Northwest Territories 9 1,071,082 1,100,690Yukon Territories 6 1,037,927 1,073,065

TOTAL 4,724 512,750,424 523,484,811

M o r t g a g e s b y Ty p e o f P r o p e r t yAs at December 31, 2009

Number ofMortgages


MarketValue ($)

Single Family Dwelling 4579 499,034,842 509,100,096Condominiums 100 9,211,275 9,642,346Multi-Unit Dwelling of up to 8 Units 45 4,504,307 4,742,369

TOTAL 4,724 512,750,424 523,484,811




Conventional Mortgages 90.7 91.7Money Market Instruments 8.7 8.0




(Level 2) ($)



Conventional Mortgages – 523,484,811 – 523,484,811Money Market Instruments – 50,078,396 – 50,078,396



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Scotia Mortgage Income Fund (Continued)


A. Risk managementThe investment objective of the Scotia Mortgage Income Fund (the “Fund”) isto provide regular interest income. It invests primarily in high quality mortgageson residential properties in Canada. The Bank of Nova Scotia (“BNS”) will buyany mortgage that is in default if it was purchased from Scotia MortgageCorporation or from BNS. The Fund may invest up to 25% of its assets in fixedincome securities issued by Canadian federal, provincial and municipal govern-ments, and by corporations. The Fund can invest up to 10% of its assets inforeign securities anywhere in the world.


B. Liquidity riskThe Fund’s exposure to liquidity risk arises primarily from the daily cashredemption of units. The Fund aims to retain sufficient cash and cashequivalent positions to maintain liquidity, and has the ability to borrow up to5% of its Net Asset Value for the purpose of funding redemptions. The Fundmay, from time to time, enter into over-the-counter derivative contracts orinvest in securities that are not traded in an active market and may be illiquid.Illiquid securities are identified in the Statement of Investment Portfolio.


D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asmortgages. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, the fair value of mortgages held wouldhave decreased or increased by approximately $3,226,838, 0.6% of the Fund’sNet Assets (December 31, 2008-$2,750,423, 0.6% of the Fund’s Net Assets).The Fund’s sensitivity to interest rate fluctuations was estimated using theweighted average duration of the Fund’s portfolio of mortgages. In practice,actual results may differ from this sensitivity analysis and the difference couldbe material.

The table below summarizes the Fund’s exposure to interest rate risk byremaining term to maturity.




Mortgages of 7 year remaining maturity – –Mortgages of 6 year remaining maturity – 0.1Mortgages of 5 year remaining maturity 12.2 12.6Mortgages of 4 year remaining maturity 12.3 20.7Mortgages of 3 year remaining maturity 15.8 21.4Mortgages of 2 year remaining maturity 25.2 12.3Mortgages of 1 year remaining maturity 11.5 20.1Mortgages of 6 months or less remaining maturity 13.7 4.5

Total 90.7 91.7


As the Fund invests primarily in mortgages this represents the main concentra-tion of credit risk. The market value of debt instruments includes considerationof the creditworthiness of the issuer, and accordingly, represents the maximumcredit risk exposure to the Fund. BNS will buy any mortgage that is in default ifit was purchased from Scotia Mortgage Corporation or from BNS.


The Government of Canada Treasury Bills representing 8.7% of the Fund’s NetAssets as of December 31, 2009 (December 31, 2008-8.0% of the Fund’s NetAssets) are rated at “R1-High”.



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Scotia Mortgage Income Fund (Continued)

Scotia Bond FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009ASSETSInvestments at fair value $421,348,267Cash 100,823Accrued investment income 4,138,739Subscriptions receivable 780,239

426,368,068

LIABILITIESPayable for securities purchased 4,491,541Distributions payable 19Redemptions payable 22,500Accrued expenses 24,476

4,538,536

Net Assets $421,829,532

NET ASSETS PER CLASSClass A Units $ 35,412,166Class I Units $386,417,366

UNITS OUTSTANDINGClass A Units 3,534,686Class I Units 38,565,745

NET ASSETS PER UNITClass A Units $ 10.02Class I Units $ 10.02

S T AT E M E N T O F O P E R AT I O N SFor the periods ended December 31*

2009INVESTMENT INCOMEInterest $ 5,059,828

EXPENSESManagement fees (note 4) 61,442Audit fees 11,319Independent Review Committee fees 7Custodian fees 2,024Filing fees 2,514Legal fees 2,329Unitholder reporting costs 2,830Unitholder administration, service fees and GST 17,928

100,393Absorbed expenses (29)

100,364

Net investment income (loss) 4,959,464

Net realized gain (loss) on investments sold (316,982)Change in unrealized appreciation (depreciation) of investments (1,001,879)

Net gain (loss) on investments and transaction costs (1,318,861)

Increase (decrease) in Net Assets from operations $ 3,640,603

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ (117,744)Class I Units $ 3,758,347

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ (0.07)Class I Units $ 0.11

S TA T E M E N T O F C H A N G E S I N N E T A S S E T SFor the periods ended December 31*

2009NET ASSETS – BEGINNING OF PERIODClass A Units $ –Class I Units –

–

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units (117,744)Class I Units 3,758,347

3,640,603


Class A Units (170,811)Class I Units (3,973,811)

(4,144,622)


Class A Units 36,206,946Class I Units 394,206,880

Reinvested distributionsClass A Units 164,519Class I Units 3,973,811

Payments on redemptionClass A Units (670,744)Class I Units (11,547,861)

422,333,551

INCREASE (DECREASE) IN NET ASSETSClass A Units 35,412,166Class I Units 386,417,366

421,829,532

NET ASSETS – END OF PERIODClass A Units 35,412,166Class I Units 386,417,366

$421,829,532

* For the period since Fund start date September 8, 2009.


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AverageCost ($)

FairValue ($)



28,290,000 Canada Housing Trust No. 14.80% due Jun. 15, 2012 30,437,013 30,218,304


6,580,000 Government of Canada8.00% due Jun. 1, 2027 9,854,870 9,674,629


176,613,134 175,388,277

Provincial Bonds – 29.1%7,730,000 Hydro-Quebec

11.00% due Aug. 15, 2020 12,072,480 11,921,1871,100,000 Province of British Columbia

4.70% due Dec. 1, 2017 1,168,871 1,159,75118,295,000 Province of Ontario

4.20% due Mar. 8, 2018 18,750,708 18,555,11646,695,000 Province of Ontario



6.00% due Oct. 1, 2029 14,347,205 14,298,240

123,797,575 122,798,526

Municipal Bonds – 1.8%7,400,000 Municipal Finance Authority of British Columbia

4.60% due Apr. 23, 2018 7,608,413 7,606,582

Mortgage-Backed Securities – 6.5%4,920,000 Merrill Lynch Financial Assets Inc.

4.83% due Feb. 12, 2039 4,327,530 4,514,3914,840,000 Merrill Lynch Financial Assets Inc.

4.98% due Jun. 12, 2039 4,270,510 4,334,0615,070,000 Merrill Lynch Financial Assets Inc.

4.81% due Oct. 12, 2039 4,336,844 4,426,2855,150,000 Real Estate Asset Liquidity Trust

4.78% due Apr. 12, 2023 4,403,746 4,684,8454,920,000 Schooner Trust

4.36% due Sep. 12, 2020 4,299,931 4,571,7425,000,000 Schooner Trust

5.19% due Jun. 12, 2022 4,315,966 4,575,723

25,954,527 27,107,047

Corporate Bonds – 19.7%3,970,000 Brookfield Renewable Power Inc.*


5.00% due Sep. 10, 2012 4,374,833 4,354,5894,100,000 Canadian Natural Resources Limited


4.94% due Jun. 1, 2012 4,407,061 4,424,0554,400,000 CU Inc.

4.80% due Nov. 22, 2021 4,383,658 4,291,2084,150,000 EnCana Corporation

4.30% due Mar. 12, 2012 4,356,245 4,331,9464,930,000 GE Capital Canada Funding Company

5.73% due Oct. 22, 2037 4,396,476 4,442,7614,150,000 Golden Credit Card Trust

4.25% due Feb. 15, 2011 4,296,089 4,272,4534,190,000 Great-West Lifeco Inc.

6.67% due Mar. 21, 2033 4,451,848 4,502,2463,770,000 Greater Toronto Airports Authority

7.10% due Jun. 4, 2031 4,404,371 4,349,258


AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES (cont’d)Corporate Bonds (cont’d)

4,220,000 Honda Canada Finance Inc.5.68% due Sep. 26, 2012 4,490,002 4,504,936

4,270,000 HSBC Financial Corporation Limited4.80% due Apr. 13, 2011 4,415,573 4,410,369

4,210,000 Manulife Financial Corporation4.90% due Jun. 2, 2014 4,398,902 4,458,006

4,110,000 NAV Canada5.30% due Apr. 17, 2019 4,402,455 4,350,929

4,290,000 Sun Life Financial Inc. (callable)4.95% due Jun. 1, 2036-(2016) 4,376,501 4,422,791

4,160,000 Suncor Energy, Inc.5.80% due May 22, 2018 4,383,467 4,353,199

4,450,000 Toronto-Dominion Bank, The (callable)4.78% due Dec. 14, 2105-(2016) 4,345,212 4,445,937

4,100,000 Toyota Credit Canada Inc.5.05% due Jul. 27, 2012 4,292,047 4,330,657

4,260,000 Wells Fargo Financial Corporation Canada4.38% due Jun. 30, 2015 4,324,597 4,328,971

83,131,606 83,202,944



0.09% to 0.17% due Jan. 7, 2010 5,244,662 5,244,891



NET ASSETS – 100.0% 421,829,532

* This security is not actively traded and considered illiquid.


Investment Category December 31, 2009


Federal Bonds 41.6Provincial Bonds 29.1Municipal Bonds 1.8Mortgage-Backed Securities 6.5Corporate Bonds 19.7Money Market Instruments 1.2




(Level 2) ($)






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Scotia Bond Fund (Continued)


A. Risk managementThe investment objective of the Scotia Bond Fund (the “Fund”) is to provide asteady flow of income and modest capital gains. The Fund invests primarily inhigh-quality fixed-income securities issued by Canadian federal, provincial andmunicipal governments and Canadian corporations.




D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $6,226,907, 1.5% of the Fund’s Net Assets. TheFund’s sensitivity to interest rate fluctuations was estimated using the weightedaverage duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.




Less than 1 year –1-3 years 159,967,2663-5 years 8,751,7225-10 years 127,484,069H 10 years 119,900,319

Total 416,103,376








December 31, 2009

AAA 51.5 50.8AA 27.8 27.4A 18.6 18.4BBB 2.1 2.1

Total 100.0 98.7




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Scotia Bond Fund (Continued)

Scotia Canadian Income FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $1,946,226,253 $1,722,174,121Cash 103,973 101,023Accrued investment income 21,045,561 20,520,632Subscriptions receivable 1,057,758 220,486Receivable for futures contracts – 2,554,360

1,968,433,545 1,745,570,622

LIABILITIESPayable for securities purchased 20,986,893 –Distributions payable 301 389Redemptions payable 450,812 444,596Accrued expenses 504,318 871,812Payable for futures contracts 20,080 –

21,962,404 1,316,797

Net Assets $1,946,471,141 $1,744,253,825

NET ASSETS PER CLASSClass A Units $ 799,982,938 $ 654,622,864Advisor Class Units $ 5,357,717 $ 1,195,179Class F Units $ 288,836 $ 280,167Class I Units $ 798,530,850 $ 771,820,487Manager Class Units* $ 342,310,800 $ 316,335,128

UNITS OUTSTANDINGClass A Units 62,349,769 53,614,917Advisor Class Units 418,511 98,064Class F Units 22,574 22,964Class I Units 62,520,270 63,218,014Manager Class Units* 26,792,797 25,908,993

NET ASSETS PER UNITClass A Units $ 12.83 $ 12.21Advisor Class Units $ 12.80 $ 12.19Class F Units $ 12.80 $ 12.20Class I Units $ 12.77 $ 12.21Manager Class Units* $ 12.78 $ 12.21


2009 2008INVESTMENT INCOMEInterest $ 92,595,349 $109,706,644Securities lending 22,177 18,490

92,617,526 109,725,134

EXPENSESManagement fees (note 4) 9,081,524 8,802,759Audit fees 28,876 24,716Independent Review Committee fees 3,670 3,607Custodian fees 21,257 64,675Filing fees 66,812 49,460Legal fees 19,554 21,108Unitholder reporting costs 95,186 98,767Unitholder administration, service fees and GST 1,183,100 1,212,236


10,480,399 10,217,416


Net realized gain (loss) on investments sold 731,135 15,870,172Net realized gain (loss) on futures contracts 5,750,070 (12,165,883)Transaction costs (42,603) (31,929)Change in unrealized appreciation (depreciation) of investments 80,965,497 (79,096,723)

Net gain (loss) on investments and transaction costs 87,404,099 (75,424,363)

Increase (decrease) in Net Assets from operations $169,541,226 $ 24,083,355

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 59,964,876 $ (2,162,733)Advisor Class Units $ 133,106 $ (19,070)Class F Units $ 21,367 $ 826Class I Units $ 81,055,871 $ 20,719,167Manager Class Units* $ 28,366,006 $ 5,545,165

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 1.06 $ (0.04)Advisor Class Units $ 0.79 $ (0.37)Class F Units $ 1.04 $ 0.04Class I Units $ 1.23 $ 0.23Manager Class Units* $ 1.15 $ 0.20


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 654,622,864 $ 684,289,697Advisor Class Units 1,195,179 –Class F Units 280,167 279,370Class I Units 771,820,487 1,415,580,142Manager Class Units* 316,335,128 402,026,085

1,744,253,825 2,502,175,294

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 59,964,876 (2,162,733)Advisor Class Units 133,106 (19,070)Class F Units 21,367 826Class I Units 81,055,871 20,719,167Manager Class Units* 28,366,006 5,545,165

169,541,226 24,083,355


Class A Units (25,525,588) (24,853,769)Advisor Class Units (74,677) (22,826)Class F Units (10,937) (12,053)Class I Units (41,239,098) (58,379,302)Manager Class Units* (15,351,390) (17,516,314)

(82,201,690) (100,784,264)


Class A Units 174,035,449 93,069,685Advisor Class Units 4,402,270 1,321,076Class F Units 109,455 21,510Class I Units 341,164,047 115,970,821Manager Class Units* 111,879,686 98,173,543

Reinvested distributionsClass A Units 24,860,729 24,247,511Advisor Class Units 46,014 17,571Class F Units 8,905 11,648Class I Units 41,239,098 58,382,440Manager Class Units* 13,456,224 16,774,747

Payments on redemptionClass A Units (87,975,392) (119,967,527)Advisor Class Units (344,175) (101,572)Class F Units (120,121) (21,134)Class I Units (395,509,555) (780,452,781)Manager Class Units* (112,374,854) (188,668,098)

114,877,780 (681,220,560)

INCREASE (DECREASE) IN NET ASSETSClass A Units 145,360,074 (29,666,833)Advisor Class Units 4,162,538 1,195,179Class F Units 8,669 797Class I Units 26,710,363 (643,759,655)Manager Class Units* 25,975,672 (85,690,957)

202,217,316 (757,921,469)

NET ASSETS – END OF PERIODClass A Units 799,982,938 654,622,864Advisor Class Units 5,357,717 1,195,179Class F Units 288,836 280,167Class I Units 798,530,850 771,820,487Manager Class Units* 342,310,800 316,335,128

$1,946,471,141 $1,744,253,825



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S T AT E M E N T O F I N V E S T M E N T P O R T F O L I OAs at December 31, 2009FaceValue ($) Issuer

AverageCost ($)

FairValue ($)




396,785,917 393,986,786



4.70% due Dec. 1, 2017 13,273,743 14,038,25629,390,000 Province of British Columbia


4.20% due Mar. 8, 2018 148,723,164 148,547,42256,945,000 Province of Ontario




6.00% due Oct. 1, 2029 134,505,047 139,563,502

695,393,940 697,684,759


4.60% due Apr. 23, 2018 42,629,821 43,963,986







5.19% due Jun. 12, 2022 28,005,111 25,935,198

172,352,387 157,014,326

Corporate Bonds – 32.5%30,090,000 Bank of America Corporation

5.45% due Sep. 17, 2014 30,075,182 31,390,71426,095,000 Brookfield Renewable Power Inc.*




4.94% due Jun. 1, 2012 30,120,552 31,698,722


AverageCost ($)

FairValue ($)


20,000,000 CIBC Capital Trust (callable)9.98% due Jun. 30, 2108-(2019) 26,389,950 25,908,198

36,790,000 Citigroup Inc.* (callable)4.65% due Oct. 11, 2022-(2017) 36,381,590 31,057,693

22,000,000 CU Inc.4.80% due Nov. 22, 2021 22,103,080 21,456,042

8,925,000 EnCana Corporation4.30% due Mar. 12, 2012 8,902,973 9,316,293

19,630,000 EnCana Corporation5.80% due Jan. 18, 2018 19,578,569 20,905,443

42,215,000 GE Capital Canada Funding Company5.73% due Oct. 22, 2037 42,071,053 38,042,833

26,490,000 Great-West Lifeco Inc.6.67% due Mar. 21, 2033 27,524,002 28,464,080

21,135,000 Greater Toronto Airports Authority7.10% due Jun. 4, 2031 21,288,580 24,382,381




19,385,000 Morgan Stanley4.90% due Feb. 23, 2017 19,299,925 19,053,840




14,000,000 TELUS Coporation5.05% due Dec. 4, 2019 13,918,660 13,649,027




620,885,798 633,076,929

TOTAL BONDS AND DEBENTURES 1,928,047,863 1,925,726,786


0.08% to 0.57% due fromJan. 7, 2010 to Jun. 10, 2010 20,493,957 20,499,467


Future Contracts – 0.0% (20,080)OTHER ASSETS, LESS LIABILITIES – 0.0% 264,968

NET ASSETS – 100.0% 1,946,471,141


B O N D F U T U R E S C O N T R A C T S

Number of Contracts Contract IssuerContractual Value

Canadian ($)Fair Value

Canadian ($)Appreciation/

(Depreciation) ($)

(1,004) Canada 10 Year Bond Futures – Mar. 2010 (120,359,520) (118,311,360) 2,048,160

2,048,160

The above futures contracts are financial agreements to purchase/sell the bonds at a contracted price on a specific future date. However, the Fund does not intend to purchase the bonds onsettlement. Rather, it intends to close out each futures contract before settlement by entering into equal, but offsetting futures contracts.

With respect to the above futures contracts, $2,095,000 of the June 10, 2010 Government of Canada Treasury Bills are held on margin.

The futures contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of A+ by Standard & Poor’s.


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Scotia Canadian Income Fund (Continued)




Federal Bonds 20.2 –Provincial Bonds 35.8 40.2Municipal Bonds 2.3 –Mortgage-Backed Securities 8.1 12.7Corporate Bonds 32.5 45.6Money Market Instruments 1.1 0.2Futures Contracts – 0.1




(Level 2) ($)



Bonds and Debentures – 1,925,726,786 – 1,925,726,786Money Market Instruments – 20,499,467 – 20,499,467


LiabilitiesQuoted prices in activemarkets for identicalassets (Level 1) ($)


(Level 2) ($)



Futures Contracts (Short) (2,048,160) – – (2,048,160)

Total Investments (2,048,160) – – (2,048,160)

Futures contracts reflect the total appreciation (depreciation) of the contracts and not thecurrent amount payable (receivable) as disclosed in the Statement of Net Assets.


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A. Risk managementThe investment objective of the Scotia Canadian Income Fund (the “Fund”) isto provide regular interest income and modest capital gains. It invests primarilyin bonds and treasury bills issued by Canadian federal, provincial and municipalgovernments and Canadian corporations. The Fund can invest up to 10% of itsassets in foreign securities anywhere in the world.









Less than 1 year – 24,623,2841-3 years 484,437,933 132,824,1243-5 years 87,693,655 196,363,9485-10 years 801,513,397 828,909,250H 10 years 552,081,801 534,854,559

Total 1,925,726,786 1,717,575,165



Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. The market value of debt instruments includesconsideration of the creditworthiness of the issuer, and accordingly, representsthe maximum credit risk exposure to the Fund. Credit risk may also exist inrelation to counterparties of futures contracts.









AAA 30.9 30.5 24.5 24.1AA 36.8 36.4 42.3 41.7A 29.6 29.3 29.2 28.8BBB 2.7 2.7 4.0 3.9

Total 100.0 98.9 100.0 98.5




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Scotia Canadian Corporate Bond Fund(formerly, Scotia Cassels Canadian Corporate Bond Fund)


2009 2008ASSETSInvestments at fair value $1,905,072,574 $1,395,606,042Cash 98,988 79,449Accrued investment income 16,955,061 14,220,690

1,922,126,623 1,409,906,181

LIABILITIESPayable for securities purchased 4,272,004 –Accrued expenses 58,046 86,368

4,330,050 86,368

Net Assets $1,917,796,573 $1,409,819,813

NET ASSETS PER CLASSClass I Units $ 312,026,367 $ 152,254,614Manager Class Units* $1,605,770,206 $1,257,565,199

UNITS OUTSTANDINGClass I Units 30,820,213 16,403,848Manager Class Units* 158,570,107 135,488,451

NET ASSETS PER UNITClass I Units $ 10.12 $ 9.28Manager Class Units* $ 10.13 $ 9.28


2009 2008INVESTMENT INCOMEInterest $ 85,334,099 $ 71,643,640Securities lending 1,042 9,566

85,335,141 71,653,206

EXPENSESManagement fees (note 4) 1,010,432 915,518Audit fees 23,325 23,758Custodian fees 19,036 39,147Filing fees 17,073 17,987Legal fees 4,760 5,781Unitholder reporting costs 7,610 8,121Unitholder administration, service fees and GST 90,520 89,682

1,172,756 1,099,994Absorbed expenses (221) (19,135)

1,172,535 1,080,859


Net realized gain (loss) on investments sold (14,310,162) 2,696,774Change in unrealized appreciation (depreciation) of investments 150,917,233 (85,201,723)


Increase (decrease) in Net Assets from operations $220,769,677 $(11,932,602)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units $ 24,535,248 $ (5,904,860)Manager Class Units* $196,234,429 $ (6,027,742)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass I Units $ 1.22 $ (0.32)Manager Class Units* $ 1.33 $ (0.04)


2009 2008NET ASSETS – BEGINNING OF PERIODClass I Units $ 152,254,614 $ –Manager Class Units* 1,257,565,199 1,259,515,063

1,409,819,813 1,259,515,063

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units 24,535,248 (5,904,860)Manager Class Units* 196,234,429 (6,027,742)

220,769,677 (11,932,602)


Class I Units (9,974,899) (5,024,967)Manager Class Units* (73,386,188) (64,720,403)

(83,361,087) (69,745,370)

UNIT TRANSACTIONSProceeds from issueClass I Units 150,441,836 187,431,374Manager Class Units* 569,985,350 316,797,878

Reinvested distributionsClass I Units 9,974,899 5,024,967Manager Class Units* 61,907,333 62,055,311

Payments on redemptionClass I Units (15,205,331) (29,271,900)Manager Class Units* (406,535,917) (310,054,908)

370,568,170 231,982,722

INCREASE (DECREASE) IN NET ASSETSClass I Units 159,771,753 152,254,614Manager Class Units* 348,205,007 (1,949,864)

507,976,760 150,304,750

NET ASSETS – END OF PERIODClass I Units 312,026,367 152,254,614Manager Class Units* 1,605,770,206 1,257,565,199

$1,917,796,573 $1,409,819,813



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Scotia Canadian Corporate Bond Fund (Continued)(formerly, Scotia Cassels Canadian Corporate Bond Fund)



AverageCost ($)

FairValue ($)


93,500,000 Canada Housing Trust No. 14.60% due Sep. 15, 2011 98,847,555 98,491,286







5.19% due Jun. 12, 2022 24,422,708 22,878,615

145,311,835 134,633,481


5.45% due Sep. 17, 2014 24,805,961 25,872,04229,800,000 Bank of Ireland (callable)

3.80% due Sep. 22, 2015-(2010) 28,962,779 23,301,65130,000,000 Bank of Montreal

6.02% due May 2, 2018 31,786,464 33,625,65654,000,000 Bank of Nova Scotia, The (callable)

4.94% due Apr. 15, 2019-(2014) 55,339,559 57,130,39440,000,000 Bell Canada

5.00% due Feb. 15, 2017 39,648,979 40,483,27037,000,000 Brookfield Renewable Power Inc.*

8.75% due Feb. 3, 2012 37,181,059 40,400,98414,900,000 Cameco Corporation

4.70% due Sep. 16, 2015 14,949,617 15,087,93331,000,000 Canadian Imperial Bank of Commerce

3.05% due Jun. 3, 2013 31,041,850 31,195,83711,000,000 Canadian Natural Resources Limited

5.50% due Dec. 17, 2010 11,039,890 11,431,35131,250,000 Canadian Natural Resources Limited

4.95% due Jun. 1, 2015 30,069,514 32,535,57425,000,000 Canadian Pacific Railway Company

6.25% due Jun. 1, 2018 24,827,053 26,680,75217,000,000 Caterpillar Financial Services Limited

4.94% due Jun. 1, 2012 16,940,947 17,864,35523,000,000 Caterpillar Financial Services Limited

5.20% due Jun. 3, 2013 23,031,315 24,415,98147,000,000 CIBC Capital Trust (callable)

9.98% due Jun. 30, 2108-(2019) 51,678,450 60,884,26530,000,000 Citigroup Inc.* (callable)

4.65% due Oct. 11, 2022-(2017) 28,299,487 25,325,65417,000,000 EnCana Corporation

4.30% due Mar. 12, 2012 16,966,749 17,745,31922,600,000 EnCana Corporation

5.80% due Jan. 18, 2018 23,727,498 24,068,41713,900,000 EPCOR Utilities Inc.

6.60% due Nov. 1, 2011 14,737,753 14,981,03235,000,000 Finning International Inc.

6.02% due Jun. 1, 2018 35,012,165 36,856,84858,000,000 GE Capital Canada Funding Company

5.53% due Aug. 17, 2017 57,024,919 59,926,10533,150,000 Golden Credit Card Trust

4.25% due Feb. 15, 2011 32,538,589 34,128,15112,300,000 Goldman Sachs Group Inc., The

4.80% due Jun. 1, 2011 12,340,882 12,718,49240,000,000 Greater Toronto Airports Authority

5.96% due Nov. 20, 2019 44,114,400 43,563,69738,150,000 Honda Canada Finance Inc.

5.68% due Sep. 26, 2012 38,332,086 40,725,901


AverageCost ($)

FairValue ($)



17,900,000 ING Bank of Canada (callable)4.30% due Dec. 5, 2016-(2011) 17,881,742 17,954,330

35,000,000 John Deere Credit Inc.5.45% due Sep. 16, 2015 34,983,900 37,609,635

10,000,000 JPMorgan Chase & Co. (callable)3.88% due Sep. 8, 2015-(2010) 9,876,700 10,084,970


40,000,000 Master Credit Card Trust4.44% due Nov. 21, 2011 39,728,290 41,769,679


40,000,000 National Australia Bank Limited (callable)4.55% due Sep. 21, 2016-(2011) 39,893,838 40,546,360

16,900,000 National Bank of Canada (callable)4.46% due Nov. 2, 2016-(2011) 16,767,096 17,539,154


28,000,000 OMERS Realty CTT Holdings Inc.4.75% due May 5, 2016 28,431,070 29,112,236

5,000,000 RBC Capital Trust (callable)6.82% due Jun. 30, 2049-(2018) 5,689,400 5,521,799

34,000,000 Rogers Communications Inc.5.80% due May 26, 2016 36,518,930 36,314,457

40,000,000 Royal Bank of Canada5.95% due Jun. 18, 2014 37,993,698 43,042,909

38,000,000 Royal Bank of Canada (callable)5.00% due Jun. 6, 2018-(2013) 39,916,110 40,475,939

19,900,000 Royal Bank of Scotland PLC, The (callable)4.25% due Mar. 30, 2015-(2010) 19,706,808 15,920,000

29,000,000 Scotiabank Tier I Trust (callable)7.80% due Jun. 30, 2108-(2019) 31,259,220 34,152,824

49,500,000 Shaw Communications Inc.5.65% due Oct. 1, 2019 49,343,085 49,770,562



40,000,000 TD Capital Trust III (callable)7.24% due Dec. 31, 2049-(2018) 40,274,650 45,201,743

20,000,000 TELUS Coporation5.05% due Dec. 4, 2019 19,883,800 19,498,611

20,500,000 TELUS Corporation4.95% due May 15, 2014 20,499,180 21,534,144

20,000,000 Thomson Reuters Corporation6.00% due Mar. 31, 2016 19,952,600 22,160,563

24,000,000 Toronto Hydro Corporation4.49% due Nov. 12, 2019 23,994,240 23,898,708



40,000,000 Wells Fargo Financial Corporation Canada3.97% due Nov. 3, 2014 39,998,400 40,248,764

1,605,181,472 1,666,722,960

TOTAL BONDS AND DEBENTURES 1,849,340,862 1,899,847,727


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AverageCost ($)

FairValue ($)


0.12% to 0.16% due fromJan. 7, 2010 to Jan. 21, 2010 5,224,799 5,224,847


OTHER ASSETS, LESS LIABILITIES – 0.6% 12,723,999

NET ASSETS – 100.0% 1,917,796,573





Federal Bonds 5.2 2.1Provincial Bonds – 0.5Mortgage-Backed Securities 7.0 9.2Corporate Bonds 86.9 87.0Money Market Instruments 0.3 0.2




(Level 2) ($)



Bonds and Debentures – 1,899,847,727 – 1,899,847,727Money Market Instruments – 5,224,847 – 5,224,847



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A. Risk managementThe investment objective of the Scotia Canadian Corporate Bond Fund (the“Fund”) is to provide a high level of regular interest income and modest capitalgains. It invests primarily in bonds issued by Canadian corporations.









Less than 1 year 60,737,972 65,505,5821-3 years 504,936,712 365,796,2143-5 years 326,431,203 320,945,4695-10 years 1,007,741,840 607,541,525H 10 years – 32,627,662

Total 1,899,847,727 1,392,416,452




Debt instruments, excluding cash and cash equivalents and including preferredshares, held by the Fund have credit ratings as follows:








AAA 17.8 17.6 27.0 26.7AA 30.7 30.4 28.8 28.4A 41.1 40.8 32.9 32.5BBB 10.4 10.3 11.2 11.1Unrated – – 0.1 0.1

Total 100.0 99.1 100.0 98.8




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Scotia U.S. $ Bond FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008

U.S.$ U.S.$ASSETSInvestments at fair value $31,388,990 $16,185,084Cash 102,414 96,052Accrued investment income 338,083 245,301Subscriptions receivable 260,005 1,576

32,089,492 16,528,013

LIABILITIESDistributions payable 25 21Redemptions payable 19,549 61,927Accrued expenses 28,806 26,951

48,380 88,899

Net Assets $32,041,112 $16,439,114

NET ASSETS PER CLASSClass A Units $32,035,793 $16,424,832Class F Units $ 5,319 $ 14,282

UNITS OUTSTANDINGClass A Units 2,969,881 1,507,617Class F Units 494 1,312

NET ASSETS PER UNITClass A Units $ 10.79 $ 10.89Class F Units $ 10.77 $ 10.88


2009 2008

U.S.$ U.S.$INVESTMENT INCOMEInterest $ 907,852 $ 881,682

EXPENSESManagement fees (note 4) 288,248 256,072Audit fees 13,621 10,831Independent Review Committee fees 99 96Custodian fees 665 1,140Filing fees 26,813 24,972Legal fees 5,001 3,911Unitholder reporting costs 9,971 10,053Unitholder administration, service fees and GST 71,602 69,779

416,020 376,854Absorbed expenses (42,547) (68,530)

373,473 308,324

Net investment income (loss) 534,379 573,358

Net realized gain (loss) on investments sold 35,952 (15,956)Change in unrealized appreciation (depreciation) of investments (350,053) 477,929

Net gain (loss) on investments and transaction costs (314,101) 461,973


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 220,169 $1,034,295Class F Units $ 109 $ 1,036

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.12 $ 0.65Class F Units $ 0.16 $ 0.81

S TA T E M E N T O F C H A N G E S I N N E T A S S E T SFor the periods December 31,

2009 2008

U.S.$ U.S.$NET ASSETS – BEGINNING OF PERIODClass A Units $16,424,832 $14,902,609Class F Units 14,282 13,246

16,439,114 14,915,855

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 220,169 1,034,295Class F Units 109 1,036

220,278 1,035,331


Class A Units (532,734) (571,477)Class F Units (261) (569)

(532,995) (572,046)

UNIT TRANSACTIONSProceeds from issueClass A Units 19,021,485 5,031,261

Reinvested distributionsClass A Units 501,548 553,821Class F Units 261 569

Payments on redemptionClass A Units (3,599,507) (4,525,677)Class F Units (9,072) –

15,914,715 1,059,974

INCREASE (DECREASE) IN NET ASSETSClass A Units 15,610,961 1,522,223Class F Units (8,963) 1,036

15,601,998 1,523,259

NET ASSETS – END OF PERIODClass A Units 32,035,793 16,424,832Class F Units 5,319 14,282

$32,041,112 $16,439,114


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AverageCost ($)

FairValue ($)

U.S.$ U.S.$ U.S.$BONDS AND DEBENTURES – 88.4%Federal Bonds – 12.5%

2,000,000 Export Development Canada1.75% due Sep. 24, 2012 2,003,888 1,992,420

1,500,000 Export Development Canada3.13% due Apr. 24, 2014 1,535,710 1,520,445

500,000 Inter-American Development Bank3.50% due Mar. 15, 2013 509,380 508,231

4,048,978 4,021,096

Provincial Bonds – 52.2%1,900,000 Province of British Columbia

4.30% due May 30, 2013 1,928,281 2,024,3681,000,000 Province of Manitoba

4.90% due Dec. 6, 2016 1,005,637 1,052,6152,000,000 Province of New Brunswick

7.63% due Feb. 15, 2013 2,418,800 2,254,0331,000,000 Province of Nova Scotia

5.75% due Feb. 27, 2012 1,093,500 1,076,4221,300,000 Province of Nova Scotia

5.13% due Jan. 26, 2017 1,379,619 1,386,1321,000,000 Province of Ontario

3.50% due Jul. 15, 2013 1,040,930 1,035,6811,750,000 Province of Ontario

4.75% due Jan. 19, 2016 1,749,950 1,846,577500,000 Province of Ontario

4.00% due Oct. 7, 2019 491,450 478,9573,000,000 Province of Quebec

4.60% due May 26, 2015 3,159,173 3,162,990700,000 Province of Quebec

4.63% due May 14, 2018 729,750 710,4791,500,000 Province of Saskatchewan

7.38% due Jul. 15, 2013 1,727,802 1,694,254

16,724,892 16,722,508

Corporate Bonds – 19.1%500,000 Canadian Natural Resources Limited

5.90% due Feb. 1, 2018 538,605 535,480381,000 Canadian Pacific Railway Company

6.50% due May 15, 2018 384,299 415,195650,000 Citigroup Inc.

6.50% due Jan. 18, 2011 658,450 679,601500,000 Deere & Company

6.95% due Apr. 25, 2014 558,270 571,235500,000 EnCana Corporation

5.90% due Dec. 1, 2017 500,260 491,254700,000 European Investment Bank

2.88% due Mar. 15, 2013 699,307 695,414500,000 General Electric Capital Corporation

5.63% due Sep. 15, 2017 523,350 511,995350,000 Husky Energy Inc.

5.90% due Jun. 15, 2014 377,283 382,365500,000 PC Financial Partnership

5.00% due Nov. 15, 2014 493,313 531,284300,000 TELUS Corporation

8.00% due Jun. 1, 2011 322,500 324,891436,000 Thomson Reuters Corporation

5.70% due Oct. 1, 2014 483,677 474,513500,000 Wal-Mart Stores, Inc.

3.20% due May 15, 2014 500,770 508,300

6,040,084 6,121,527

United States Treasury Notes – 4.6%1,500,000 United States Treasury Notes

2.13% due Nov. 30, 2014 1,488,574 1,464,492



AverageCost ($)

FairValue ($)

U.S.$ U.S.$ U.S.$MONEY MARKET INSTRUMENTS – 9.6%

175,000 Government of Canada Treasury Bills0.05% due Feb. 18, 2010 174,988 174,988

2,400,000 Export Development Canada Commercial Paper0.06% to 0.16% due fromFeb. 11, 2010 to Apr. 20, 2010 2,399,318 2,399,455

485,000 Province of Ontario Commercial Paper0.12% due Feb. 17, 2010 484,884 484,924

3,059,190 3,059,367



NET ASSETS – 100.0% 32,041,112




Federal Bonds 12.5 3.2Provincial Bonds 52.2 66.9Corporate Bonds 19.1 26.7United States Treasury Notes 4.6 0.7Money Market Instruments 9.6 0.9


AssetsQuoted prices in activemarkets for identical

assets (Level 1) (U.S. $)

Significant otherobservable inputs(Level 2) (U.S. $)


inputs (Level 3) (U.S. $) Total (U.S. $)




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Scotia U.S. $ Bond Fund (Continued)


A. Risk managementThe investment objective of the Scotia U.S. $ Bond Fund (the “Fund”) is toprovide a high level of interest income. It invests primarily in bonds andtreasury bills that are denominated in U.S. dollars and issued by Canadianfederal, provincial and municipal governments, Canadian corporations andsupranational entities, such as the World Bank.



C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than U.S. dollars, which is the Fund’s reporting currency, willfluctuate due to changes in exchange rates. As at December 31, 2009 andDecember 31, 2008, the Fund did not have a significant exposure to currencyrisk.

D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $313,338, 1.0% of the Fund’s Net Assets (Decem-ber 31, 2008-$180,796, 1.1% of the Fund’s Net Assets). The Fund’s sensitivityto interest rate fluctuations was estimated using the weighted average durationof the Fund’s portfolio of bonds. In practice, actual results may differ from thissensitivity analysis and the difference could be material.





Less than 1 year – –1-3 years 4,073,334 1,164,6473-5 years 13,664,615 8,486,3545-10 years 10,591,674 6,384,089H 10 years – –

Total 28,329,623 16,035,090












AAA 21.8 19.3 11.6 11.4AA 28.6 25.3 39.7 38.7A 46.2 40.9 45.9 44.7BBB 3.4 2.9 2.8 2.7

Total 100.0 88.4 100.0 97.5




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Scotia U.S. $ Bond Fund (Continued)

Scotia Global Bond FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $92,650,084 $48,130,613Cash 138,042 231,136Accrued investment income 1,045,756 892,853Subscriptions receivable 67,333 63,226

93,901,215 49,317,828

LIABILITIESDistributions payable 2 32Redemptions payable 4,719 5,608Accrued expenses 23,572 51,245Payable for currency forward contracts 1,944,686 74,341

1,972,979 131,226

Net Assets $91,928,236 $49,186,602

NET ASSETS PER CLASSClass A Units $21,582,177 $26,838,482Class I Units $70,346,059 $22,348,120

UNITS OUTSTANDINGClass A Units 2,575,481 2,671,211Class I Units 8,442,909 2,221,390

NET ASSETS PER UNITClass A Units $ 8.38 $ 10.05Class I Units $ 8.33 $ 10.06


2009 2008INVESTMENT INCOMEInterest $ 2,413,699 $ 2,206,156Securities lending 126 567

2,413,825 2,206,723

EXPENSESManagement fees (note 4) 363,647 310,012Audit fees 13,910 10,767Independent Review Committee fees 409 404Custodian fees 1,768 1,957Filing fees 17,334 16,759Legal fees 6,048 5,074Unitholder reporting costs 17,327 18,148Unitholder administration, service fees and GST 140,477 148,183


539,806 460,293


Net realized gain (loss) on investments sold (50,996) (1,175,462)Net realized gain (loss) on currency forwards (398,831) 5,206,788Net realized gain (loss) on foreign exchange (511,152) 79,316Change in unrealized appreciation (depreciation) of investments (7,702,350) 9,485,146Change in unrealized appreciation (depreciation) of currency forwards (1,870,345) (304,407)


Increase (decrease) in Net Assets from operations $ (8,659,655) $15,037,811

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ (4,077,713) $ 6,898,050Class I Units $ (4,581,942) $ 8,139,761

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ (1.53) $ 2.79Class I Units $ (1.10) $ 2.82


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $26,838,482 $ 18,480,918Class I Units 22,348,120 24,923,060

49,186,602 43,403,978

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units (4,077,713) 6,898,050Class I Units (4,581,942) 8,139,761

(8,659,655) 15,037,811


Class A Units (506,103) (602,352)Class I Units (1,328,677) (1,132,516)

(1,834,780) (1,734,868)


Class A Units 6,453,437 6,004,478Class I Units 62,436,733 2,300,906

Reinvested distributionsClass A Units 503,304 599,605Class I Units 1,328,702 1,132,491

Payments on redemptionClass A Units (7,629,230) (4,542,217)Class I Units (9,856,877) (13,015,582)

53,236,069 (7,520,319)

INCREASE (DECREASE) IN NET ASSETSClass A Units (5,256,305) 8,357,564Class I Units 47,997,939 (2,574,940)

42,741,634 5,782,624

NET ASSETS – END OF PERIODClass A Units 21,582,177 26,838,482Class I Units 70,346,059 22,348,120

$91,928,236 $ 49,186,602

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AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES – 95.9%Australian Dollar – 5.9%

2,000,000 Kreditanstalt fuer Wiederaufbau5.75% due May 13, 2015 1,901,306 1,847,482

2,000,000 New South Wales Treasury Corporation5.25% due May 1, 2013 1,866,364 1,881,536

1,800,000 Province of Ontario5.50% due Jul. 13, 2012 1,527,317 1,704,606

5,294,987 5,433,624

Brazilian Real – 1.9%3,000,000 International Bank for Reconstruction and Development

9.25% due Dec. 20, 2012 1,775,732 1,773,850

British Pound – 8.7%500,000 Network Rail Infrastructure Finance PLC

4.88% due Mar. 7, 2012 966,420 900,0391,000,000 Network Rail Infrastructure Finance PLC

4.63% due Jul. 21, 2020 1,857,225 1,697,292500,000 United Kingdom Treasury Gilt

5.00% due Mar. 7, 2012 965,704 911,095900,000 United Kingdom Treasury Gilt

5.00% due Mar. 7, 2018 1,768,872 1,658,588800,000 United Kingdom Treasury Gilt

5.00% due Mar. 7, 2025 1,580,967 1,441,515800,000 United Kingdom Treasury Gilt

4.25% due Dec. 7, 2049 1,481,089 1,340,891

8,620,277 7,949,420

Canadian Dollar – 6.4%2,000,000 Canada Housing Trust No. 1

4.10% due Dec. 15, 2018 2,076,840 2,036,2271,500,000 Government of Canada

1.25% due Dec. 1, 2011 1,492,350 1,493,6251,100,000 Government of Canada

5.75% due Jun. 1, 2033 1,346,050 1,354,8651,000,000 Instituto de Credito Oficial

4.53% due Mar. 17, 2016 964,550 1,013,086

5,879,790 5,897,803

European Euro – 31.9%2,000,000 Bank Nederlandse Gemeenten NV

3.88% due Nov. 4, 2019 3,159,085 3,017,2903,500,000 Deutschland Bundersrepublik

4.25% due Jul. 4, 2018 5,887,218 5,651,5582,000,000 European Community

3.63% due Apr. 6, 2016 3,228,241 3,086,9623,000,000 European Investment Bank

3.63% due Oct. 15, 2013 4,914,738 4,705,0011,500,000 Government of France

4.00% due Oct. 25, 2014 2,347,585 2,401,2131,300,000 Government of France

4.00% due Oct. 25, 2038 1,777,739 1,880,9463,000,000 International Bank for Reconstruction and Development

3.88% due May 20, 2019 4,820,102 4,580,286


AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES (cont’d)European Euro (cont’d)

1,500,000 Netherlands Government4.00% due Jul. 15, 2019 2,439,480 2,335,631

1,060,000 Province of Ontario4.13% due May 14, 2013 1,675,600 1,665,334

30,249,788 29,324,221

United States Dollar – 41.1%500,000 European Investment Bank

5.25% due Jun. 15, 2011 521,305 550,7463,000,000 Export Development Canada

1.75% due Sep. 24, 2012 3,198,313 3,138,8231,000,000 Fannie Mae

6.63% due Nov. 15, 2030 1,376,060 1,268,0782,500,000 Government of Canada

2.38% due Sep. 10, 2014 2,702,717 2,576,4431,300,000 HSBC USA Inc.

3.13% due Dec. 16, 2011 1,505,308 1,403,424900,000 Kreditanstalt fuer Wiederaufbau

4.50% due Jul. 16, 2018 905,808 976,6111,500,000 Oesterreichische Kontrollbank AG

5.00% due Apr. 25, 2017 1,633,650 1,658,3022,280,000 Province of British Columbia

4.30% due May 30, 2013 2,684,358 2,551,3231,340,000 Province of Nova Scotia

8.88% due Jul. 1, 2019 2,080,860 1,822,388900,000 Province of Saskatchewan

7.38% due Jul. 15, 2013 1,286,994 1,067,6397,000,000 U.S. Treasury Note

1.38% due Oct. 15, 2012 7,422,312 7,312,1495,000,000 U.S. Treasury Note

3.63% due Aug. 15, 2019 5,536,144 5,165,9404,000,000 U.S. Treasury Note

4.50% due Feb. 15, 2036 4,562,910 4,146,5364,000,000 US Treasury Note

2.13% due Nov. 30, 2014 4,204,522 4,101,572

39,621,261 37,739,974


MONEY MARKET INSTRUMENTS – 4.9%160,000 Canadian Wheat Board, The Commerical Paper

(U.S.) 0.06% due Feb. 1, 2010 168,362 168,0324,155,000 Export Development Canada Commercial Paper

(U.S.) 0.06% to 0.15% due fromFeb. 11, 2010 to Apr. 19, 2010 4,379,708 4,363,160

4,548,070 4,531,192


Currency Forward Contracts – (2.1)% (1,944,686)OTHER ASSETS, LESS LIABILITIES – 1.3% 1,222,838

NET ASSETS – 100.0% 91,928,236

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Scotia Global Bond Fund (Continued)

S T AT E M E N T O F I N V E S T M E N T P O R T F O L I OC U R R E N C Y F O R W A R D C O N T R A C T S

Settlement Date Currency To Be ReceivedContractual

Amount Currency To Be DeliveredContractual

AmountCanadian Value as at

December 31, 2009 ($)


(Depreciation)Jan. 6, 2010 Australian Dollar 2,817,731 Japanese Yen 226,525,811 2,557,599 100,462Jan. 6, 2010 Australian Dollar 999,229 U.S. Dollar 923,887 970,982 (28,375)Jan. 6, 2010 British Pound 1,060,530 European Euro 1,187,271 1,785,190 14,515Jan. 6, 2010 British Pound 1,634,104 U.S. Dollar 2,607,867 2,738,985 34,068Jan. 6, 2010 Canadian Dollar 3,013,655 Japanese Yen 261,874,540 2,955,526 58,128Jan. 6, 2010 Canadian Dollar 190,463 U.S. Dollar 181,308 190,472 (9)Jan. 6, 2010 European Euro 1,171,727 British Pound 1,060,530 1,799,777 (38,099)Jan. 6, 2010 European Euro 3,158,673 Japanese Yen 413,128,505 4,661,343 87,684Jan. 6, 2010 European Euro 252,443 Swiss Franc 377,370 382,800 (3,255)Jan. 6, 2010 European Euro 3,834,216 U.S. Dollar 5,780,924 6,071,596 (306,898)Jan. 6, 2010 European Euro 15,544 U.S. Dollar 22,151 23,264 106Jan. 6, 2010 Japanese Yen 226,525,811 Australian Dollar 2,795,235 2,634,594 (78,909)Jan. 6, 2010 Japanese Yen 261,874,540 Canadian Dollar 3,138,552 3,139,135 (184,642)Jan. 6, 2010 Japanese Yen 413,128,505 European Euro 3,126,091 4,702,512 (41,558)Jan. 6, 2010 Japanese Yen 1,712,191,821 U.S. Dollar 19,537,540 20,523,681 (1,206,576)Jan. 6, 2010 Mexican Peso 10,985,320 U.S. Dollar 850,566 894,156 (12,097)Jan. 6, 2010 Norwegian Krone 11,410,573 U.S. Dollar 2,042,801 2,146,227 (78,727)Jan. 6, 2010 Singapore Dollar 2,406,102 U.S. Dollar 1,742,895 1,830,872 (32,415)Jan. 6, 2010 Swiss Franc 377,370 European Euro 250,179 376,170 6,574Jan. 6, 2010 Swiss Franc 133,819 U.S. Dollar 133,714 140,443 (4,718)Jan. 6, 2010 U.S. Dollar 873,027 Australian Dollar 999,229 942,085 (25,185)Jan. 6, 2010 U.S. Dollar 19,713 Australian Dollar 22,496 21,209 (506)Jan. 6, 2010 U.S. Dollar 2,722,500 British Pound 1,634,104 2,773,160 86,158Jan. 6, 2010 U.S. Dollar 181,308 Canadian Dollar 191,551 191,517 (1,097)Jan. 6, 2010 U.S. Dollar 3,533,291 European Euro 2,478,633 3,726,624 (15,768)Jan. 6, 2010 U.S. Dollar 2,000,000 European Euro 1,355,583 2,038,119 62,391Jan. 6, 2010 U.S. Dollar 46,430 European Euro 32,582 48,987 (224)Jan. 6, 2010 U.S. Dollar 3,244 European Euro 2,264 3,404 2Jan. 6, 2010 U.S. Dollar 17,683,507 Japanese Yen 1,621,453,821 18,294,390 277,797Jan. 6, 2010 U.S. Dollar 1,000,000 Japanese Yen 90,738,000 1,023,770 26,484Jan. 6, 2010 U.S. Dollar 846,327 Mexican Peso 10,985,320 881,762 7,097Jan. 6, 2010 U.S. Dollar 1,935,636 Norwegian Krone 11,410,573 2,067,192 (34,281)Jan. 6, 2010 U.S. Dollar 1,709,000 Singapore Dollar 2,406,102 1,798,360 (3,474)Jan. 6, 2010 U.S. Dollar 127,337 Swiss Franc 133,819 135,737 (2,001)Jan. 29, 2010 Canadian Dollar 1,800,000 U.S. Dollar 1,699,099 1,786,870 13,130Jan. 29, 2010 Canadian Dollar 191,558 U.S. Dollar 181,308 190,674 883Jan. 29, 2010 European Euro 1,187,098 British Pound 1,060,530 1,800,061 (15,273)Jan. 29, 2010 European Euro 2,478,633 U.S. Dollar 3,533,291 3,711,364 15,231Jan. 29, 2010 Japanese Yen 226,525,811 Australian Dollar 2,825,498 2,658,676 (102,991)Jan. 29, 2010 Japanese Yen 261,874,540 Canadian Dollar 3,014,383 3,012,272 (57,779)Jan. 29, 2010 Japanese Yen 413,128,505 European Euro 3,159,542 4,752,833 (91,879)Jan. 29, 2010 Japanese Yen 1,621,453,822 U.S. Dollar 17,686,786 18,579,512 (286,120)Jan. 29, 2010 U.S. Dollar 1,692,844 Australian Dollar 1,940,000 1,825,172 (47,255)Jan. 29, 2010 U.S. Dollar 2,607,295 British Pound 1,634,104 2,773,609 (35,285)

(1,944,686)

The currency forward contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of AA- by Standard & Poor’s.




Australian Dollar Bonds 5.9 4.9Brazilian Real Bonds 1.9 1.7British Pound Bonds 8.7 6.0Canadian Dollar Bonds 6.4 8.5European Euro Bonds 31.9 41.7United States Dollar Bonds 41.1 31.8Money Market Instruments 4.9 3.2Currency Forward Contracts (2.1) (0.2)




(Level 2) ($)







(Level 2) ($)



Currency Forward Contracts – 1,944,686 – 1,944,686


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A. Risk managementThe investment objective of the Scotia Global Bond Fund (the “Fund”) is toprovide a high level of regular interest income. It invests primarily in foreigncurrency-denominated bonds and money market instruments issued by Cana-dian federal, provincial and municipal governments and Canadian corporations,and by foreign governments and corporations, and supranational entities, suchas the World Bank.



C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than Canadian dollars, which is the Fund’s reporting currency,will fluctuate due to changes in exchange rates. The Fund’s financialinstruments were exposed to the following currencies:December 31, 2009

CurrencyFinancial

Instruments ($)Currency Forward

Contracts ($)Net CurrencyExposure ($)


Japanese Yen – 30,510,587 30,510,587 33.2European Euro 29,324,222 1,016,366 30,340,588 33.0U.S. Dollar 42,276,849 (21,254,001) 21,022,848 22.9British Pound 7,949,420 (4,622,432) 3,326,988 3.6Brazilian Real 1,773,850 – 1,773,850 1.9Australian Dollar 5,433,624 (4,553,155) 880,469 1.0Norwegian Krone – 79,035 79,035 0.1Mexican Peso – 12,394 12,394 0.0Singapore Dollar – 32,512 32,512 0.0Swiss Franc – (1,924) (1,924) 0.0

Total 86,757,965 1,219,382 87,977,347 95.7

December 31, 2008

CurrencyFinancial




Japanese Yen – 18,035,571 18,035,571 36.7European Euro 20,516,057 (6,564,668) 13,951,389 28.4U.S. Dollar 16,559,741 (5,597,730) 10,962,011 22.3Swiss Franc – 1,291,524 1,291,524 2.6Singapore Dollar – 1,010,862 1,010,862 2.0Brazilian Real 823,982 – 823,982 1.7British Pound 2,936,572 (2,463,689) 472,883 1.0Norwegian Krone – 317,934 317,934 0.6Australian Dollar 2,398,290 (2,264,361) 133,929 0.3

Total 43,234,642 3,765,443 47,000,085 95.6

The amounts in the above tables are based on the fair value of the Fund’sfinancial instruments. Other financial assets (including dividends and interestreceivable and receivable for investments sold) and financial liabilities that aredenominated in foreign currencies do not expose the Fund to significantcurrency risk.

As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $8,797,735, 9.6% of the Fund’s Net Assets (December 31, 2008-

$4,700,009, 9.6% of the Fund’s Net Assets). In practice, actual results maydiffer from this sensitivity analysis and the difference could be material.

D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $1,415,276, 1.5% of the Fund’s Net Assets(December 31, 2008-$698,910, 1.4% of the Fund’s Net Assets). The Fund’ssensitivity to interest rate fluctuations was estimated using the weightedaverage duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.






Total 88,118,892 46,516,487



Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. The market value of debt instruments includesconsideration of the creditworthiness of the issuer, and accordingly, representsthe maximum credit risk exposure to the Fund. Credit risk may also exist inrelation to counterparties of currency forward contracts.









AAA 86.8 83.3 75.7 71.6AA 11.1 10.6 17.3 16.4A 2.1 2.0 7.0 6.6

Total 100.0 95.9 100.0 94.6



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Scotia Advantaged Income Fund(formerly, Scotia Cassels Advantaged Income Fund)


2009 2008ASSETSInvestments at fair value $50,821,769 $35,361,304Cash 114,399 112,265Accrued investment income 191,119 203,307Receivable for currency forward contracts 71,297 107,981

51,198,584 35,784,857

LIABILITIESDistributions payable 352,199 275,789Accrued expenses – 12,347

352,199 288,136

Net Assets $50,846,385 $35,496,721

NET ASSETS PER CLASSManager Class Units* $50,846,385 $35,496,721

UNITS OUTSTANDINGManager Class Units* 5,869,987 4,596,487

NET ASSETS PER UNITManager Class Units* $ 8.66 $ 7.72


2009 2008INVESTMENT INCOMEDividends $ 795,429 $ 437,828Interest 973,824 722,926Foreign withholding taxes/Tax reclaims (28,358) (22,581)

1,740,895 1,138,173


123,165 124,798Absorbed expenses – (13,510)

123,165 111,288


Net realized gain (loss) on investments sold (2,237,841) (2,276,814)Net realized gain (loss) on currency forwards 377,718 (1,883,756)Net realized gain (loss) on foreign exchange (60,574) (63,260)Transaction costs (146,731) (65,360)Change in unrealized appreciation (depreciation) of investments 8,874,716 (6,156,434)Change in unrealized appreciation (depreciation) of currency forwards (36,684) 107,981


Increase (decrease) in Net Assets from operations $ 8,388,334 $ (9,310,758)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* $ 8,388,334 $ (9,310,758)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITManager Class Units* $ 1.67 $ (2.18)


2009 2008NET ASSETS – BEGINNING OF PERIODManager Class Units* $35,496,721 $ 150,000

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* 8,388,334 (9,310,758)


Manager Class Units* (3,656,137) (2,855,745)


Manager Class Units* 19,463,238 59,397,018Payments on redemption


10,617,467 47,513,224

INCREASE (DECREASE) IN NET ASSETSManager Class Units* 15,349,664 35,346,721

NET ASSETS – END OF PERIODManager Class Units* $50,846,385 $ 35,496,721




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Numberof Shares/Number ofContracts Issuer

AverageCost ($)

FairValue ($)

EQUTIIES – 59.9%CANADIAN EQUITIES – 45.7%Energy – 11.1%

3,842 Bonavista Energy Trust 83,436 85,5619,495 Canadian Natural Resources Limited 664,716 718,4878,196 Canadian Oil Sands Trust 249,050 244,077

17,113 Cenovus Energy Inc. 523,406 452,9815,481 Enbridge Inc. 235,883 266,1037,613 EnCana Corporation 263,216 259,223

12,274 Husky Energy Inc. 351,711 368,4658,338 Imperial Oil Ltd. 334,115 338,6068,501 NAL Oil & Gas Trust 115,769 116,1249,637 Nexen Inc. 243,399 242,2741,755 Petrobank Energy and Resources Ltd. 85,965 89,5585,745 Precision Drilling Trust 41,956 43,662

31,047 Suncor Energy, Inc. 1,129,043 1,152,15526,215 Talisman Energy Inc. 417,561 512,50316,794 TransCanada Corporation 530,984 607,103

4,248 Vermilion Energy Trust 125,983 137,635

5,396,193 5,634,517

Materials – 8.8%6,701 Agnico-Eagle Mines Limited 417,924 380,550

(17) Agnico-Eagle Mines Limited, Written Call Options $60.00Jan. 15, 2010 (1,424) (536)

3,591 Agrium Inc. 200,621 232,37423,548 Barrick Gold Corporation 1,057,388 974,887

6,696 Cameco Corporation 210,185 226,39213,300 Canfor Corporation 102,391 107,730

5,975 Centerra Gold Inc. 61,244 63,81312,410 Gerdau Ameristeel Corporation 105,099 107,96716,850 Goldcorp, Inc. 752,286 696,074

1,946 Inmet Mining Corporation 118,261 123,6886,550 Potash Corporation of Saskatchewan Inc. 679,568 747,4218,295 Quadra Mining Ltd. 112,601 120,278

18,606 Teck Resources Limited, Class B 626,504 682,840

4,442,648 4,463,478

Industrials – 2.6%31,281 Bombardier Inc., Class B 167,928 149,83610,847 Canadian National Railway Company 560,600 619,906

3,644 Canadian Pacific Railway Limited 184,029 206,6156,771 SNC-Lavalin Group Inc. 322,301 365,092

1,234,858 1,341,449

Consumer Discretionary – 2.5%1,484 Canadian Tire Corporation, Limited 84,335 85,1074,331 Magna International Inc. 233,134 230,3235,285 Shaw Communications, Inc., Class B 108,569 114,1567,613 Shoppers Drug Mart Corporation 331,267 345,554

10,669 Thomson Reuters Corporation 368,293 361,67911,000 WestJet Airlines Ltd. 129,299 135,740

1,254,897 1,272,559

Consumer Staples – 0.4%6,478 Saputo Inc. 187,428 199,199

Financials – 12.8%9,679 Bank of Montreal 490,941 539,991

22,341 Bank of Nova Scotia, The 909,950 1,098,9547,250 Brookfield Asset Management Inc. 164,488 169,2157,541 Canadian Imperial Bank of Commerce 453,443 512,4116,973 Great-West Lifeco Inc. 156,722 187,0164,765 Intact Financial Corporation 164,590 175,733

17,018 Manulife Financial Corporation 353,609 328,447


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Financials (cont’d)

(60) Manulife Financial Corporation, Written Call Options $19.00Jan. 15, 2010 (2,820) (3,000)

2,061 National Bank of Canada 105,649 123,99011,072 Power Corporation of Canada 298,025 322,41729,126 Royal Bank of Canada 1,412,193 1,641,5416,698 Sun Life Financial Inc. 190,265 202,079

18,442 Toronto-Dominion Bank, The 874,843 1,216,065

5,571,898 6,514,859

Information Technology – 1.6%11,483 Research In Motion Limited 977,788 814,834

Telecommunication Services – 1.6%13,053 Rogers Communications, Inc., Class B 466,010 425,00611,226 TELUS Corporation 391,089 382,133

857,099 807,139

Utilities – 0.4%3,685 Emera Inc. 85,483 92,3834,247 Fortis, Inc. 109,656 121,804

195,139 214,187

Index Units – 3.9%115,000 iShares CDN S&P/TSX 60 Index Fund 2,001,805 1,997,550

TOTAL CANADIAN EQUITIES 22,119,753 23,259,771

FOREIGN EQUITIES – 14.2%United States – 14.2%

1,543 3M Company 114,672 133,8413,561 Aflac Incorporated 171,993 172,9734,575 Altera Corporation 109,728 108,7353,955 American Express Company 164,084 168,1864,304 Ameriprise Financial, Inc. 172,637 175,4782,030 AmerisourceBergen Corporation 53,332 55,518

878 Apple Inc. 187,484 194,16210,124 Applied Materials, Inc. 140,489 147,3702,194 AT&T Inc. 60,733 64,5886,387 BB&T Corporation 171,286 170,1812,400 Bed Bath & Beyond Inc. 99,204 97,3712,193 Broadcom Corporation 72,148 71,6991,900 Campbell Soup Company 68,145 67,4474,180 Capital One Financial Corporation 171,502 168,3152,253 Chevron Corporation 173,729 182,1057,377 Cisco Systems, Inc. 183,943 185,4811,228 Colgate-Palmolive Company 94,281 105,9242,618 DIRECTV Group Inc., The 80,319 91,6711,911 Dow Chemical Company, The 56,865 55,4541,534 E.I.duPont de Nemours and Company 55,069 54,229

485 Eastman Chemical Company 30,280 30,6492,824 Exxon Mobil Corporation 223,150 202,038

11,107 Ford Motor Company 94,994 116,418634 Freeport-McMoRan Copper & Gold Inc., Class B 47,144 53,462

8,476 General Electric Company 141,148 134,687314 Google Inc. 187,724 204,457

1,729 Hess Corporation 105,734 109,7892,712 Honeywell International Inc. 110,755 111,5962,022 Illinois Tool Works Inc. 106,488 101,8911,510 Integrys Energy Group, Inc. 59,346 66,5751,404 International Business Machines Corporation 164,101 192,916

979 International Flavors & Fragrances Inc. 42,266 42,3001,965 Johnson & Johnson 130,937 132,7611,600 Kellogg Company 85,143 89,381

S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9B

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Scotia Advantaged Income Fund (Continued)(formerly, Scotia Cassels Advantaged Income Fund)


For equities, all common shares unless otherwise noted.The accompanying notes are an integral part of the financial statements.

40

Numberof Shares/FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United States (cont’d)

1,450 Kimberly-Clark Corporation 99,664 97,0222,326 Masco Corporation 35,260 33,7361,958 McDonald’s Corporation 129,963 128,319

820 McKesson Corporation 55,077 53,8172,450 Medtronic, Inc. 111,466 113,0893,768 Merck & Co., Inc. 147,792 144,4446,093 Microsoft Corporation 177,782 195,112

692 Monsanto Company 58,243 59,414395 Mosaic Company, The 22,765 24,779

1,290 Northrop Grumman Corporation 74,752 75,5993,046 Peabody Energy Corporation 143,011 144,3741,330 PepsiCo, Inc. 85,955 84,8869,596 Pfizer Inc. 164,682 183,3231,719 PG&E Corporation 76,077 80,611

297 priceline.com Incorporated 55,703 67,965949 Procter & Gamble Company, The 61,417 60,400

3,201 QUALCOMM Incorporated 150,273 155,5201,492 Questar Corporation 66,958 65,0611,500 Reynolds American Inc. 84,659 83,4481,914 TJX Companies Inc., The 66,017 73,4523,039 Travelers Companies, Inc., The 167,831 159,1071,982 United Technologies Corporation 142,743 144,3382,460 UnitedHealth Group Incorporated 77,678 78,7233,079 Verizon Communications Inc. 102,508 107,1342,702 Wal-Mart Stores, Inc. 147,481 151,6232,659 Walgreen Co. 113,044 102,4343,186 Walt Disney Company, The 98,286 107,9127,580 Weatherford International Ltd. 135,986 142,5802,530 WellPoint Inc. 152,398 154,6462,700 Wells Fargo & Company 74,712 76,393

7,011,036 7,208,909

TOTAL EQUITIES 29,130,789 30,468,680

BONDS AND DEBENTURES – 37.4%Mortgage-Backed Securities – 3.9%

400,000 Merrill Lynch Financial Assets Inc.4.83% due Feb. 12, 2039 367,669 367,024

200,000 Merrill Lynch Financial Assets Inc.4.98% due Jun. 12, 2039 193,173 179,093

400,000 Merrill Lynch Financial Assets Inc.4.81% due Oct. 12, 2039 360,941 349,214

400,000 Real Estate Asset Liquidity Trust4.78% due Apr. 12, 2023 357,099 363,871

400,000 Schooner Trust4.36% due Sep. 12, 2020 355,512 371,686

400,000 Schooner Trust5.19% due Jun. 12, 2022 359,072 366,058

1,993,466 1,996,946

Corporate Bonds – 33.5%350,000 American Express Canada Credit Corporation

5.90% due Apr. 2, 2013 349,401 374,150300,000 Bank of America Corporation

5.45% due Sep. 17, 2014 296,149 312,968300,000 Bank of Ireland (callable)

3.80% due Sep. 22, 2015-(2010) 292,834 234,580400,000 Bank of Montreal (callable)

6.17% due Mar. 28, 2023-(2018) 411,375 440,561450,000 Bank of Montreal Capital Trust (callable)

4.63% due Dec. 31, 2049-(2015) 369,405 453,857


AverageCost ($)

FairValue ($)


350,000 Bank of Nova Scotia, The (callable)4.94% due Apr. 15, 2019-(2014) 359,342 370,290

350,000 Brookfield Renewable Power Inc.*8.75% due Feb. 3, 2012 351,688 382,171

200,000 Cameco Corporation4.70% due Sep. 16, 2015 190,565 202,523

400,000 Canadian Imperial Bank of Commerce (callable)6.00% due Jun. 6, 2023-(2018) 372,828 438,077

400,000 Canadian Natural Resources Limited4.95% due Jun. 1, 2015 376,179 416,455

400,000 Canadian Pacific Railway Company6.25% due Jun. 1, 2018 397,356 426,892

500,000 Caterpillar Financial Services Limited5.20% due Jun. 3, 2013 499,960 530,782

700,000 CIBC Capital Trust (callable)9.98% due Jun. 30, 2108-(2019) 743,470 906,787

500,000 Citigroup Inc.* (callable)4.65% due Oct. 11, 2022-(2017) 387,450 422,094

500,000 EnCana Corporation5.80% due Jan. 18, 2018 500,040 532,487

300,000 EPCOR Utilities Inc.6.60% due Nov. 1, 2011 319,419 323,332

300,000 Finning International Inc.6.02% due Jun. 1, 2018 299,808 315,916

500,000 GE Capital Canada Funding Company5.53% due Aug. 17, 2017 492,845 516,604

200,000 Goldman Sachs Group Inc., The4.80% due Jun. 1, 2011 198,379 206,805

450,000 Great-West Lifeco Finance (Delaware) LP5.69% due Jun. 21, 2017 347,400 448,882

400,000 Greater Toronto Airports Authority5.26% due Apr. 17, 2018 384,960 419,526

400,000 Honda Canada Finance Inc.5.68% due Sep. 26, 2012 410,260 427,008

350,000 ING Bank of Canada (callable)4.30% due Dec. 5, 2016-(2011) 328,958 351,062

400,000 John Deere Credit Inc.5.45% due Sep. 16, 2015 399,816 429,824

400,000 Manulife Financial Corporation4.90% due Jun. 2, 2014 400,000 423,564

100,000 Morgan Stanley4.50% due Feb. 23, 2012 95,802 102,820


200,000 National Australia Bank Limited (callable)4.55% due Sep. 21, 2016-(2011) 199,531 202,732

200,000 National Bank of Canada (callable)4.46% due Nov. 2, 2016-(2011) 195,284 207,564

450,000 NBC Capital Trust5.33% due Jun. 30, 2016 355,725 449,105

400,000 RBC Capital Trust (callable)6.82% due Jun. 30, 2049-(2018) 355,200 441,744

400,000 Royal Bank of Canada5.95% due Jun. 18, 2014 379,739 430,429

200,000 Royal Bank of Scotland PLC, The (callable)4.25% due Mar. 30, 2015-(2010) 197,655 160,000

450,000 Scotiabank Tier I Trust (callable)7.80% due Jun. 30, 2108-(2019) 480,321 529,958

500,000 Shaw Communications Inc.5.65% due Oct. 1, 2019 498,415 502,733

500,000 Sun Life Financial Inc. (callable)4.95% due Jun. 1, 2036-(2016) 466,687 515,477


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AverageCost ($)

FairValue ($)


500,000 Suncor Energy, Inc.5.80% due May 22, 2018 505,130 523,221

400,000 TD Capital Trust III (callable)7.24% due Dec. 31, 2049-(2018) 400,000 452,017

350,000 TELUS Corporation4.95% due Mar. 15, 2017 323,820 355,032

350,000 Thomson Reuters Corporation6.00% due Mar. 31, 2016 359,065 387,810

450,000 Toronto-Dominion Bank, The (callable)4.78% due Dec. 14, 2105-(2016) 405,974 449,589

300,000 TransCanada PipeLines Limited9.80% due Dec. 20, 2017 379,170 403,750

400,000 Wells Fargo Financial Corporation Canada4.38% due Jun. 30, 2015 365,960 406,476

15,597,476 17,009,494



AverageCost ($)

FairValue ($)


0.10% to 0.18% due fromMar. 4, 2010 to Apr. 1, 2010 1,094,595 1,094,630

150,000 Government of Canada Treasury Bills(U.S.) 0.10% due Mar. 11, 2010 158,684 157,508

90,000 Export Development Canada Commercial Paper(U.S.) 0.06% due Mar. 16, 2010 95,183 94,511

1,348,462 1,346,649


Currency Forward Contracts – 0.1% 71,297OTHER ASSETS, LESS LIABILITIES – (0.1)% (46,681)

NET ASSETS – 100.0% 50,846,385


C U R R E N C Y F O R W A R D C O N T R A C T S




December 31, 2009 ($)


(Depreciation)Jan. 6, 2010 Canadian Dollar 4,173,000 U.S. Dollar 3,924,630 4,122,380 50,619Jan. 6, 2010 Canadian Dollar 1,742,700 U.S. Dollar 1,639,417 1,722,022 20,678

71,297





Canadian Equities 45.7 34.4Foreign Equities 14.2 23.0Currency Options 0.0 0.0Bonds and Debentures 37.4 39.8Money Market Instruments 2.7 2.4Currency Forward Contracts 0.1 (0.3)




(Level 2) ($)



Equities 30,472,216 – – 30,472,216Bonds and Debentures – 19,006,440 – 19,006,440Money Market Instruments – 1,346,649 – 1,346,649Currency Forward Contracts – 71,297 – 71,297

Total Investments 30,472,216 20,424,386 – 50,896,602



(Level 2) ($)



Options (Written Call) 3,536 – – 3,536

Total Investments 3,536 – – 3,536


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A. Risk managementThe investment objective of the Scotia Advantaged Income Fund (the “Fund”)is to provide regular high monthly distributions from dividends, realized capitalgains, other income and a return of capital, as well as some capital appreciation.It invests primarily in a broad range of Canadian equity and fixed incomesecurities.



C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than Canadian dollars, which is the Fund’s reporting currency,will fluctuate due to changes in exchange rates. The Fund’s financialinstruments were exposed to the following currency:December 31, 2009

CurrencyFinancial




U.S. Dollar 7,466,264 (5,844,403) 1,621,861 3.2

Total 7,466,264 (5,844,403) 1,621,861 3.2

December 31, 2008

CurrencyFinancial




U.S. Dollar 8,172,908 (8,775,244) (602,336) (1.7)

Total 8,172,908 (8,775,244) (602,336) (1.7)


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $162,186, 0.3% of the Fund’s Net Assets (December 31, 2008-$60,234, 0.2% of the Fund’s Net Assets). In practice, actual results may differfrom this sensitivity analysis and the difference could be material.

D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $243,585, 0.5% of the Fund’s Net Assets(December 31, 2008-$150,283, 0.4% of the Fund’s Net Assets). The Fund’ssensitivity to interest rate fluctuations was estimated using the weighted

average duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.





Less than 1 year 394,580 353,5231-3 years 2,203,494 4,372,7083-5 years 2,442,183 3,372,2035-10 years 13,966,183 5,697,781H 10 years – 348,028

Total 19,006,440 14,144,243












AAA 10.5 3.9 24.4 9.7AA 23.3 8.7 29.9 11.9A 54.7 20.5 35.7 14.3BBB 11.5 4.3 9.9 3.9Unrated – – 0.1 –

Total 100.0 37.4 100.0 39.8


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark stock indices of, 40% DEX Universe BondIndex, 35% S&P/TSX Composite Index, and 25% S&P 500 Index, as ofDecember 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $11,491,283, 22.6% of the Fund’s NetAssets (December 31, 2008-$2,124,731, 6.0% of the Fund’s Net Assets). TheFund’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia Diversified Monthly Income FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $ 991,762,565 $547,462,273Cash 461,402 –Accrued investment income 4,414,458 2,301,995Receivable for securities sold 67,735 –Subscriptions receivable 3,519,838 1,015,080Receivable for futures contracts – 154,280Receivable for currency forward contracts 231,023 –

1,000,457,021 550,933,628

LIABILITIESBank indebtedness – 1,431,393Payable for securities purchased 10,977,760 –Distributions payable 272,000 662,293Redemptions payable 574,846 358,075Accrued expenses – 670,998Payable for futures contracts 1,080 –Payable for currency forward contracts – 178,283

11,825,686 3,301,042

Net Assets $ 988,631,335 $547,632,586

NET ASSETS PER CLASSClass A Units $ 984,146,052 $547,483,901Advisor Class Units $ 4,468,943 $ 138,381Class F Units $ 16,340 $ 10,304

UNITS OUTSTANDINGClass A Units 101,842,621 63,957,885Advisor Class Units 464,158 15,985Class F Units 1,660 1,189

NET ASSETS PER UNITClass A Units $ 9.66 $ 8.56Advisor Class Units $ 9.63 $ 8.66Class F Units $ 9.85 $ 8.67


2009 2008INVESTMENT INCOMEDividends $ 14,840,494 $ 8,619,178Interest 18,309,365 28,166,214Capital gains distributions received 148,933 17,626Securities lending 223,079 333,566Foreign withholding taxes/Tax reclaims (393,503) (210,524)

33,128,368 36,926,060



9,862,144 7,641,755


Net realized gain (loss) on investments sold (3,619,357) (16,402,280)Net realized gain (loss) on futures contracts 305,340 (655,837)Net realized gain (loss) on currency forwards 2,092,020 (2,795,029)Net realized gain (loss) on foreign exchange 363,226 462,259Transaction costs (1,066,082) (470,693)Change in unrealized appreciation (depreciation) of investments 98,788,597 (96,049,122)Change in unrealized appreciation (depreciation) of currency

forwards 409,306 (178,283)


Increase (decrease) in Net Assets from operations $120,539,274 $ (86,804,680)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $120,137,087 $ (86,778,437)Advisor Class Units $ 399,921 $ (24,588)Class F Units $ 2,266 $ (1,655)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PERUNIT

Class A Units $ 1.52 $ (1.56)Advisor Class Units $ 1.69 $ (2.72)Class F Units $ 1.55 $ (1.63)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $547,483,901 $ 453,620,909Advisor Class Units 138,381 –Class F Units 10,304 7,183

547,632,586 453,628,092

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 120,137,087 (86,778,437)Advisor Class Units 399,921 (24,588)Class F Units 2,266 (1,655)

120,539,274 (86,804,680)


Class A Units (28,860,713) (28,982,695)Advisor Class Units (90,934) (5,370)Class F Units (530) (539)

(28,952,177) (28,988,604)


Class A Units 416,199,686 309,586,106Advisor Class Units 4,035,737 201,578Class F Units 5,988 7,023

Reinvested distributionsClass A Units 26,778,027 27,210,832Advisor Class Units 76,129 1,917Class F Units 530 539

Payments on redemptionClass A Units (97,591,936) (127,172,814)Advisor Class Units (90,291) (35,156)Class F Units (2,218) (2,247)

349,411,652 209,797,778

INCREASE (DECREASE) IN NET ASSETSClass A Units 436,662,151 93,862,992Advisor Class Units 4,330,562 138,381Class F Units 6,036 3,121

440,998,749 94,004,494

NET ASSETS – END OF PERIODClass A Units 984,146,052 547,483,901Advisor Class Units 4,468,943 138,381Class F Units 16,340 10,304

$988,631,335 $ 547,632,586


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Numberof Shares Issuer

AverageCost ($)

FairValue ($)

EQUITIES – 58.0%CANADIAN EQUITIES – 56.8%Energy – 14.0%

199,902 AltaGas Income Trust 4,592,377 3,752,161473,300 ARC Energy Trust 9,647,863 9,437,602260,000 Baytex Energy Trust 7,004,400 7,677,800335,650 Bonavista Energy Trust 7,306,563 7,474,926176,000 Canadian Oil Sands Trust 6,112,480 5,241,280294,000 Cenovus Energy Inc. 8,862,512 7,782,180650,000 Daylight Resources Trust 5,710,500 6,610,500133,000 Enbridge Inc. 5,688,576 6,457,150594,000 EnCana Corporation 19,372,330 20,225,69950,000 Enerplus Resources Fund 2,249,705 1,205,000

600,000 Fort Chicago Energy Partners LP 5,282,547 5,982,000100,000 Husky Energy Inc. 2,826,984 3,002,00092,101 Keyera Facilities Income Fund 1,626,876 2,241,738

310,000 Mullen Group Ltd. 5,070,745 5,040,600425,000 Pengrowth Energy Trust 4,401,620 4,301,000275,000 Progress Energy Resources Corp. 3,337,134 3,877,500270,000 Talisman Energy Inc. 5,061,533 5,278,500635,000 TransCanada Corporation 21,189,379 22,955,250550,000 Trinidad Drilling Ltd. 5,864,027 3,855,500185,500 Vermilion Energy Trust 6,095,321 6,010,200

137,303,472 138,408,586

Materials – 5.9%670,000 Barrick Gold Corporation 28,008,746 27,737,99986,000 Cameco Corporation 2,689,842 2,907,660

450,000 Gerdau Ameristeel Corporation 3,865,500 3,915,000281,000 Norbord Inc. 5,280,544 4,096,980905,000 Norbord Inc. Warrants $13.60 Dec. 24, 2013* – 814,500141,600 Potash Corporation of Saskatchewan Inc. 16,224,397 16,157,976160,000 Russel Metals Inc. 2,808,362 2,824,000

58,877,391 58,454,115

Industrials – 3.2%250,000 Aecon Group Inc. 2,875,000 3,742,500970,000 Bombardier Inc., Class B 4,755,222 4,646,300300,000 Brookfield Infrastructure Partners LP 4,665,000 5,220,00035,000 Canadian National Railway Company 1,664,026 2,000,250

100,000 Finning International Inc. 2,729,128 1,659,000128,700 IESI-BFC Ltd. 2,862,064 2,158,29958,220 Student Transportation of America Ltd. 407,540 275,381

250,000 Toromont Industries Ltd. 5,961,683 6,935,000350,000 Westshore Terminals Income Fund 4,630,000 4,984,000

30,549,663 31,620,730

Consumer Discretionary – 3.3%70,000 Loblaw Companies Limited 2,089,500 2,367,400

405,000 Shaw Communications, Inc., Class B 8,662,378 8,748,000215,000 Shoppers Drug Mart Corporation 9,824,900 9,758,850339,500 Thomson Reuters Corporation 12,470,667 11,509,050

33,047,445 32,383,300

Consumer Staples – 0.4%200,000 Premium Brands Holdings Corp. 2,110,000 2,720,00075,000 Saputo Inc. 1,783,418 2,306,250

3,893,418 5,026,250

Financials – 23.5%310,500 Bank of Montreal 16,226,747 17,322,795648,500 Bank of Nova Scotia, The 31,194,588 31,899,715166,000 Brookfield Asset Management Inc. 4,377,612 3,874,440111,300 Canadian Apartment Properties Real Estate Investment Trust 1,825,491 1,560,426

Numberof Shares/Numberof Contracts/FaceValue ($) Issuer

AverageCost ($)

FairValue ($)


305,500 Canadian Imperial Bank of Commerce 20,247,349 20,758,724100,000 Cominar Real Estate Investment Trust 1,804,260 1,928,000277,500 First Capital Realty Inc. 5,403,528 5,969,02585,425 First Capital Realty Inc. Warrants $17.53 Oct. 29, 2010* – 314,364

150,000 Genivar Income Fund 3,937,500 4,057,500239,387 Genworth MI Canada Inc. 5,981,925 6,451,480220,100 Great-West Lifeco Inc. 6,518,065 5,903,082250,000 Intact Financial Corporation 8,196,056 9,220,000480,000 Manulife Financial Corporation 14,483,825 9,264,000(1,440) Manulife Financial Corporation, Written Call Options $19.00

Jan. 15, 2010 (67,680) (72,000)396,000 Power Corporation of Canada 10,897,255 11,531,520100,000 Power Financial Corporation 6.00% Preferred, Series M 2,680,000 2,743,000770,000 Royal Bank of Canada 43,960,450 43,397,200200,000 Royal Bank of Canada 6.25% Preferred, Series AR 5,550,000 5,614,000245,000 Sun Life Financial Inc. 10,370,340 7,391,650570,000 Toronto-Dominion Bank, The 37,915,850 37,585,800200,000 Toronto-Dominion Bank, The 6.25%, Preferred, Series AG 5,233,000 5,626,000

236,736,161 232,340,721

Telecommunication Services – 3.5%354,000 BCE Inc. 11,372,850 10,248,300129,000 Manitoba Telecom Services Inc. 5,412,777 4,309,890385,000 Rogers Communications, Inc., Class B 13,753,442 12,535,600225,000 TELUS Corporation Non-Voting 9,420,805 7,346,250

39,959,874 34,440,040

Utilities – 3.0%500,000 Atlantic Power Corporation 5,300,000 5,735,000100,000 Brookfield Renewable Power Fund 1,772,221 1,910,000200,000 Capital Power Corporation 4,576,432 4,274,000306,500 Emera Inc. 6,276,244 7,683,955190,000 Fortis, Inc. 4,779,805 5,449,200183,000 TransAlta Corporation 4,449,632 4,291,350

27,154,334 29,343,505


FOREIGN EQUITIES – 1.2%United Kingdom – 0.2%

10,000 Rio Tinto PLC ADR 1,679,056 2,262,144

United States – 1.0%100,000 Enbridge Energy Partners, LP 4,816,098 5,632,516180,000 Spectra Energy Corp. 4,491,168 3,877,330

9,307,266 9,509,846

TOTAL FOREIGN EQUITIES 10,986,322 11,771,990

TOTAL EQUITIES 578,508,080 573,789,237




42,165,369 42,043,759


11.00% due Aug. 15, 2020 2,466,367 2,390,406


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AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES (cont’d)Provincial Bonds (cont’d)

1,755,000 Province of British Columbia5.70% due Jun. 18, 2029 1,920,678 1,949,028


2,605,000 Province of Ontario4.40% due Jun. 2, 2019 2,658,142 2,633,381


865,000 Province of Quebec4.50% due Dec. 1, 2018 866,691 883,876

9,445,000 Province of Quebec6.00% due Oct. 1, 2029 10,351,549 10,692,548

65,100,291 65,355,677


4.60% due Apr. 23, 2018 2,286,095 2,359,068





4.78% due Apr. 12, 2023 1,587,288 1,460,034710,000 Schooner Trust

4.36% due Sep. 12, 2020 672,400 659,7432,500,000 Schooner Trust

5.19% due Jun. 12, 2022 2,306,355 2,287,861

10,331,317 9,802,146


5.45% due Sep. 17, 2014 1,500,035 1,564,8412,000,000 Bell Canada

5.00% due Feb. 15, 2017 1,954,120 2,024,1642,225,000 Brookfield Renewable Power Inc.*




4.94% due Jun. 1, 2012 2,254,983 2,364,4001,700,000 Citigroup Inc.* (callable)

4.65% due Oct. 11, 2022-(2017) 1,637,805 1,435,1202,100,000 CU Inc.

4.80% due Nov. 22, 2021 2,070,324 2,048,077650,000 EnCana Corporation

4.30% due Mar. 12, 2012 650,815 678,4981,700,000 EnCana Corporation

5.80% due Jan. 18, 2018 1,727,480 1,810,4562,000,000 Finning International Inc.

6.02% due Jun. 1, 2018 2,003,095 2,106,106


AverageCost ($)

FairValue ($)



1,670,000 Golden Credit Card Trust4.25% due Feb. 15, 2011 1,638,926 1,719,276







3,000,000 Mullen Group Limited*10.00% due Jul. 1, 2018 4,260,000 4,546,150




1,000,000 TELUS Corporation5.05% due Dec. 4, 2019 994,190 974,931




55,044,667 56,971,905


FIXED INCOME FUNDS – 21.6%13,902,589 Scotia Canadian Corporate Bond Fund Class I 139,854,808 141,134,908

6,642,647 Scotia Mortgage Income Fund Class I 71,525,140 72,484,567

TOTAL FIXED INCOME FUNDS 211,379,948 213,619,475




Currency Forward Contracts – 0.0% 231,023Futures Contracts – 0.0% (1,080)OTHER ASSETS, LESS LIABILITIES – (0.3)% (3,361,173)

NET ASSETS – 100.0% 988,631,335



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Number of Contracts Contract IssuerContractual Value



(Depreciation) ($)

(54) Canada 10 Year Bond Futures – Mar. 2010 (6,473,520) (6,363,360) 110,160

110,160

The above futures contracts are financial agreements to purchase/sell the bonds at a contracted price on a specific future date. However, the Fund does not intend to purchase the bonds onsettlement. Rather, it intends to close out each futures contract before settlement by entering into equal, but offsetting futures contracts.With respect to the above futures contracts, $500,000 of the June 23, 2010 Government of Canada Treasury Bills are held on margin.The futures contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of AA- by Standard & Poor’s.





December 31, 2009 ($)


(Depreciation)Jan. 6, 2010 Canadian Dollar 38,814,000 U.S. Dollar 36,503,854 38,343,176 470,824Jan. 6, 2010 Canadian Dollar 20,837,050 U.S. Dollar 19,602,117 20,589,810 247,240Jan. 6, 2010 U.S. Dollar 35,885,285 Canadian Dollar 38,014,000 38,009,465 (320,776)Jan. 6, 2010 U.S. Dollar 19,674,299 Canadian Dollar 20,837,050 20,834,564 (171,539)Jan. 6, 2010 U.S. Dollar 766,651 Canadian Dollar 800,000 799,905 5,274

231,023





Canadian Equities 56.8 43.8Foreign Equities 1.2 6.2Bonds and Debentures 17.9 16.3Fixed Income Funds 21.6 26.7Money Market Instruments 2.8 6.8Currency Forward Contracts – –Futures Contracts – –




(Level 2) ($)



Equities 572,732,373 – – 572,732,373Warrants – 1,128,864 – 1,128,864Mutual Funds 213,619,475 – – 213,619,475Bonds and Debentures – 176,532,555 – 176,532,555Money Market Instruements – 27,821,298 – 27,821,298Currency Forward Contracts – 231,023 – 231,023




(Level 2)($)


inputs (Level 3)($) Total ($)

Options (Written Call) 72,000 – – 72,000Futures Contracts (Short) (110,160) – – (110,160)

Total Investments (38,160) – – (38,160)



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A. Risk managementThe investment objective of the Scotia Diversified Monthly Income Fund (the“Fund”) is to provide regular monthly income and some capital appreciation.The portfolio advisor determines the asset mix of debt and equity securitiesbased on its analysis of market conditions and performance expectations foreach asset class in a manner consistent with the Fund’s investment objectives.




CurrencyFinancial




U.S. Dollar 11,875,002 710,948 12,585,950 1.3

Total 11,875,002 710,948 12,585,950 1.3

December 31, 2008

CurrencyFinancial




U.S. Dollar 33,782,401 (12,689,344) 21,093,057 3.9

Total 33,782,401 (12,689,344) 21,093,057 3.9


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $1,258,595, 0.1% of the Fund’s Net Assets (December 31, 2008-$2,109,306, 0.4% of the Fund’s Net Assets). In practice, actual results maydiffer from this sensitivity analysis and the difference could be material.







Total 176,532,555 89,969,995

* Excludes cash, cash equivalents, holdings of the Scotia Mortgage IncomeFund, Scotia Canadian Corporate Bond Fund and preferred shares asapplicable


Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. The market value of debt instruments includesconsideration of the creditworthiness of the issuer, and accordingly, representsthe maximum credit risk exposure to the Fund. Credit risk may also exist inrelation to counterparties of futures and currency forward contracts.

Debt instruments, excluding cash, cash equivalents and holdings of the ScotiaMortgage Income Fund and Scotia Canadian Corporate Bond Fund but includingpreferred shares, held by the Fund have credit ratings as follows:








AAA 36.7 7.1 26.4 4.7AA 37.7 7.2 43.3 7.8A 20.7 4.0 25.8 4.6BBB 2.5 0.5 4.5 0.7Unrated 2.4 0.5 – –

Total 100.0 19.3 100.0 17.8


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark indices of, 55% DEX Universe Bond Index and45% S&P/TSX Composite Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $142,362,912, 14.4% of the Fund’s Net Assets (December 31, 2008-$39,429,546, 7.2% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia Canadian Balanced Fund


2009 2008ASSETSInvestments at fair value $2,265,383,055 $1,849,982,546Cash 1,558,068 1,548,418Accrued investment income 10,537,608 10,372,138Receivable for securities sold 98,846 15,922,914Subscriptions receivable 2,913,791 2,466,595Receivable for futures contracts – 1,472,857Receivable for currency forward contracts 3,379,641 –

2,283,871,009 1,881,765,468

LIABILITIESPayable for securities purchased 12,134,608 34,670,452Distributions payable 640 3,365Redemptions payable 1,104,110 1,192,154Accrued expenses 1,900,119 3,230,558Payable for futures contracts 118,291 –Payable for currency forward contracts – 1,466,836

15,257,768 40,563,365

Net Assets $2,268,613,241 $1,841,202,103

NET ASSETS PER CLASSClass A Units $2,268,573,529 $1,841,151,990Class F Units $ 39,712 $ 50,113

UNITS OUTSTANDINGClass A Units 117,596,164 107,408,497Class F Units 2,096 2,974



2009 2008INVESTMENT INCOMEDividends $ 30,977,898 $ 26,366,007Interest 40,753,294 51,030,880Capital gains distributions received – 4,663Securities lending 170,027 655,306Foreign withholding taxes/Tax reclaims (1,166,790) (1,271,547)

70,734,429 76,785,309



39,991,777 40,585,508


Net realized gain (loss) on investments sold (68,265,252) (58,536,083)Net realized gain (loss) on futures contracts 6,421,562 (21,488,038)Net realized gain (loss) on currency forwards 16,288,949 (34,429,371)Net realized gain (loss) on foreign exchange (781,376) (1,976,593)Transaction costs (6,964,280) (3,021,039)Change in unrealized appreciation (depreciation) of investments 298,058,476 (375,327,622)Change in unrealized appreciation (depreciation) of currency forwards 4,846,477 (1,722,555)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $280,339,587 $(460,289,371)Class F Units $ 7,621 $ (12,129)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 2.47 $ (4.52)Class F Units $ 2.70 $ (4.15)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $1,841,151,990 $2,049,096,661Class F Units 50,113 62,242

1,841,202,103 2,049,158,903

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 280,339,587 (460,289,371)Class F Units 7,621 (12,129)

280,347,208 (460,301,500)


Class A Units (31,052,673) (35,396,930)Class F Units (1,057) (1,507)

(31,053,730) (35,398,437)


Class A Units 355,610,549 519,541,831Class F Units 1,981 –

Reinvested distributionsClass A Units 30,988,027 35,315,563Class F Units 1,058 1,507

Payments on redemptionClass A Units (208,463,951) (267,115,764)Class F Units (20,004) –

178,117,660 287,743,137

INCREASE (DECREASE) IN NET ASSETSClass A Units 427,421,539 (207,944,671)Class F Units (10,401) (12,129)

427,411,138 (207,956,800)

NET ASSETS – END OF PERIODClass A Units 2,268,573,529 1,841,151,990Class F Units 39,712 50,113

$2,268,613,241 $1,841,202,103


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Numberof Shares/Numberof Contracts Issuer

AverageCost ($)

FairValue ($)


188,305 Bonavista Energy Trust 3,450,785 4,193,552453,067 Canadian Natural Resources Limited 23,733,155 34,283,580380,347 Canadian Oil Sands Trust 12,143,302 11,326,734791,768 Cenovus Energy Inc. 21,546,478 20,958,099259,299 Enbridge Inc. 10,917,412 12,588,965334,968 EnCana Corporation 10,303,147 11,405,660532,346 Husky Energy Inc. 14,871,512 15,981,027328,943 Imperial Oil Ltd. 12,912,086 13,358,375362,999 NAL Oil & Gas Trust 4,943,404 4,958,566458,691 Nexen Inc. 12,904,322 11,531,492

85,022 Petrobank Energy and Resources Ltd. 3,776,206 4,338,673257,000 Precision Drilling Trust 1,891,165 1,953,200

1,443,687 Suncor Energy, Inc. 50,578,725 53,575,2251,240,611 Talisman Energy Inc. 18,271,543 24,253,944

801,592 TransCanada Corporation 26,272,735 28,977,551200,000 Vermilion Energy Trust 6,180,000 6,480,000

234,695,977 260,164,643

Materials – 9.1%301,402 Agnico-Eagle Mines Limited 17,648,449 17,116,620

(920) Agnico-Eagle Mines Limited, Written Call Options $60.00Jan. 15, 2010 (77,040) (28,987)

165,829 Agrium Inc. 9,869,321 10,730,7951,095,097 Barrick Gold Corporation 38,888,221 45,337,015

289,861 Cameco Corporation 7,971,071 9,800,200622,000 Canfor Corporation 4,788,505 5,038,200291,000 Centerra Gold Inc. 2,982,750 3,107,880534,460 Gerdau Ameristeel Corporation 4,206,652 4,649,802779,843 Goldcorp, Inc. 28,931,914 32,215,314

90,000 Inmet Mining Corporation 5,374,808 5,720,400308,523 Potash Corporation of Saskatchewan Inc. 25,350,393 35,205,560368,000 Quadra Mining Ltd. 5,003,081 5,336,000880,562 Teck Resources Limited, Class B 20,574,854 32,316,625

171,512,979 206,545,424

Industrials – 2.8%1,988,871 Bombardier Inc., Class B 11,410,927 9,526,691

512,147 Canadian National Railway Company 21,754,332 29,269,201170,118 Canadian Pacific Railway Limited 7,157,990 9,645,691304,301 SNC-Lavalin Group Inc. 12,688,096 16,407,910

53,011,345 64,849,493

Consumer Discretionary – 2.6%67,900 Canadian Tire Corporation, Limited 3,634,526 3,894,065

206,400 Magna International Inc. 9,334,841 10,976,352250,421 Shaw Communications, Inc., Class B 5,255,682 5,409,094350,953 Shoppers Drug Mart Corporation 14,041,367 15,929,757503,673 Thomson Reuters Corporation 18,516,760 17,074,514515,000 WestJet Airlines Ltd. 6,053,518 6,355,100

56,836,694 59,638,882

Consumer Staples – 0.4%321,589 Saputo Inc. 7,499,332 9,888,862

Financials – 13.5%452,393 Bank of Montreal 22,883,590 25,239,005

1,043,549 Bank of Nova Scotia, The 48,594,885 51,332,175374,290 Brookfield Asset Management Inc. 8,480,636 8,735,929355,390 Canadian Imperial Bank of Commerce 21,177,910 24,148,751332,308 Great-West Lifeco Inc. 8,167,081 8,912,501229,492 Intact Financial Corporation 6,344,178 8,463,665796,407 Manulife Financial Corporation 20,296,293 15,370,655(2,500) Manulife Financial Corporation Written Call Options $19.00

Jan. 15, 2010 (117,500) (125,000)


AverageCost ($)

FairValue ($)


106,663 National Bank of Canada 5,923,449 6,416,846506,410 Power Corporation of Canada 14,250,446 14,746,658

1,358,210 Royal Bank of Canada 59,155,571 76,548,716307,523 Sun Life Financial Inc. 11,765,695 9,277,969855,970 Toronto-Dominion Bank, The 50,565,821 56,442,662

277,488,055 305,510,532

Information Technology – 1.6%516,491 Research In Motion Limited 38,988,258 36,650,201

Telecommunication Services – 1.7%609,414 Rogers Communications, Inc., Class B 19,022,033 19,842,520544,416 TELUS Corporation 18,966,235 18,531,921

37,988,268 38,374,441

Utilities – 0.5%180,565 Emera Inc. 4,188,228 4,526,765199,500 Fortis, Inc. 5,078,254 5,721,660

9,266,482 10,248,425


FOREIGN EQUITIES – 17.8%Australia – 0.2%

17,400 Australia and New Zealand Banking Group Limited 188,571 371,78515,900 Bendigo and Adelaide Bank Limited 137,391 146,3882,400 BHP Billiton Limited 77,750 96,518

11,400 Lend Lease Corporation Limited 113,286 109,09618,100 Macquarie Group Limited 569,899 813,816

136,820 Macquarie Infrastructure Group 200,045 171,22817,755 National Australia Bank Limited 259,533 453,72071,532 Qantas Airways Limited 244,859 199,6588,217 QBE Insurance Group Limited 165,390 196,962

71,800 Telstra Corporation Limited 224,832 231,08019,600 Westpac Banking Corporation 391,283 463,3246,200 WorleyParsons Limited 163,269 168,669

2,736,108 3,422,244

Belgium – 0.0%12,977 Anheuser-Busch InBev NV 485,584 703,15419,200 Fortis Rights Jul. 17, 2014 – –

485,584 703,154

Denmark – 0.1%2,450 Carlsberg A/S Series B 196,030 189,611

12,000 Danske Bank AS 326,167 286,5416,326 Novo Nordisk AS, Class B 418,643 424,4773,160 Vestas Wind Systems AS 241,488 202,773

1,182,328 1,103,402

Finland – 0.0%38,400 Nokia Oyj 837,960 517,024

France – 0.3%10,734 BNP Paribas 834,054 888,3841,600 Bouygues Guyancourt 87,561 87,5132,500 Casino Guichard-Perrachon SA 196,056 234,9815,100 Compagnie de Saint-Gobain 282,863 287,112

20,890 Credit Agricole SA 706,680 381,9575,400 Electricite de France SA 307,038 337,006

15,200 France Telecom SA 423,185 398,0193,800 Klepierre 177,980 162,1232,800 L’Oreal SA 272,748 326,0367,100 Lagardere SCA 619,979 300,4672,300 LVMH Moet Hennessy Louis Vuitton SA 234,666 270,848

16,170 Sanofi-Aventis 1,337,801 1,329,351


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50


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)France (cont’d)

12,980 SES Global SA FDR 318,743 305,2546,865 Societe Generale 873,564 498,1804,500 Technip 342,309 330,7161,400 Unibail-Rodamco 320,810 323,2291,484 Vallourec SA 318,494 283,087

13,860 Vivendi 439,804 429,133

8,094,335 7,173,396

Germany – 0.3%4,300 Allianz SE 961,970 564,4374,400 BASF SE 238,275 288,075

12,827 Bayer AG 906,859 1,079,63413,200 Bayerische Motoren Werke AG 631,068 633,3282,400 Celesio AG 64,768 64,3137,400 Deutsche Bank AG 659,494 548,789

19,090 Deutsche Post AG 287,364 385,23522,700 Deutsche Telekom AG 364,681 353,32112,613 E.ON AG 622,544 549,9856,986 Fresenius Medical Care AG & Co. KGaA 390,605 387,9421,264 MAN SE 82,062 103,1143,700 METRO AG 211,090 238,3632,000 Muenchener Rueckversicherungs-Gesellschaft AG 337,213 327,5861,740 RWE AG 162,323 178,0435,620 SAP AG 279,178 278,6676,375 Siemens AG 563,527 614,7892,353 Volkswagen AG Non-voting 233,249 229,749

6,996,270 6,825,370

Hong Kong – 0.1%45,394 Esprit Holdings Limited 319,577 313,76120,000 Guoco Group Limited 230,793 223,57423,100 Hong Kong Exchanges & Clearing Limited 373,486 431,88357,600 HSBC Holdings PLC 702,036 688,66260,000 Li & Fung Limited 186,355 259,327

118,000 New World Development Company Limited 211,048 252,92519,000 Sun Hung Kai Properties Limited 251,947 296,08624,500 Yue Yuen Industrial (Holdings) Limited 61,478 74,312

2,336,720 2,540,530

Ireland – 0.0%12,300 CRH PLC 365,425 349,433

Italy – 0.2%26,000 Banca Popolare di Milano Scarl 220,301 193,44429,400 Enel SpA 168,427 179,05220,000 Eni SpA 611,383 534,02328,600 Saipem SpA 807,541 1,030,421

189,700 Telecom Italia SpA 361,292 308,566155,700 Telecom Italia SpA, di Risp Non Conv. 229,063 180,220

26,699 Tenaris SA 425,078 598,692128,200 UniCredit SpA 493,618 447,247

3,316,703 3,471,665

Japan – 0.4%21,000 AEON Co., Ltd. 260,322 178,41711,700 Asahi Breweries Ltd. 226,223 225,4587,550 Canon Inc. 320,479 335,3773,400 East Japan Railway Company 227,909 225,4299,800 Honda Motor Co., Ltd. 306,103 348,177

32,000 ITOCHU Corporation 221,743 247,2537,600 JFE Holdings, Inc. 266,326 314,479

37 KDDI Corporation 250,688 205,01910,500 Konica Minolta Holdings Inc. 105,205 113,1552,500 Kyocera Corporation 197,186 231,675

41,400 Mitsubishi Corporation 1,003,437 1,081,567


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Japan (cont’d)

9,000 Mitsubishi Tanabe Pharma Corporation 107,218 117,60923,600 Mitsubishi UFJ Financial Group Inc. 138,758 121,41542,900 Mitsui & Co., Ltd. 706,401 638,16721,000 Mitsui Fudosan Co., Ltd. 325,103 370,5494,800 Murata Manufacturing Co. Ltd. 251,314 249,0358,100 NAMCO BANDAI Holdings Inc. 131,629 80,983

14,000 NGK Insulators, Ltd. 277,779 320,08936,000 Nippon Electric Glass Co., Ltd. 399,411 516,03610,000 Nippon Shokubai Co., Ltd. 91,616 90,34810,100 Nippon Telegraph and Telephone Corporation 505,661 417,44927,000 Nippon Yusen Kabushiki Kaisha 124,106 86,80352,600 Nissan Motor Co., Ltd. 495,003 483,0584,800 Orix Corporation 311,029 342,995

19,000 Sharp Corporation 371,070 251,21511,500 Softbank Corporation 286,641 282,4308,700 Sumitomo Mitsui Financial Group Inc. 656,101 260,623

12,000 Sumitomo Realty And Development Co., Ltd. 218,928 236,49014,000 Suzuki Motor Corporation 366,968 361,2218,000 Takashimaya Co., Ltd. 63,456 53,1656,900 Tokyo Electric Power Co., Inc. 194,013 181,732

58,000 Tokyo Gas Co. Ltd. 245,337 242,950148,000 Toshiba Corporation 1,055,261 857,644

10,708,424 10,068,012

Netherlands – 0.2%17,238 ArcelorMittal 668,510 819,97117,300 ASML Holding NV 446,182 617,13221,820 Koninklijke Ahold NV 305,954 303,6086,000 Koninklijke DSM NV 306,585 308,5419,816 Qiagen NV 219,452 229,9708,500 Randstand Holding NV 279,821 440,779

31,905 Royal Dutch Shell PLC 1,164,910 1,012,14122,500 Unilever NV 680,501 768,937

4,071,915 4,501,079

New Zealand – 0.0%15,400 Fletcher Building Limited 72,970 93,01225,994 Telecom Corporation of New Zealand Limited 80,227 49,287

153,197 142,299

Norway – 0.0%15,900 Statoil ASA 531,779 416,065

Singapore – 0.0%40,000 Noble Group Limited 86,827 96,23223,000 United Overseas Bank Limited 272,859 336,105

359,686 432,337

Spain – 0.1%96,590 Banco Santander Central Hispano SA 1,679,480 1,664,3867,410 Gamesa Corporation Tecnologica SA 177,205 130,279

43,745 Telefonica SA 1,087,670 1,278,724

2,944,355 3,073,389

Sweden – 0.0%24,142 Atlas Copco AB 324,293 370,31020,600 Volvo AB, Class B 265,113 184,213

589,406 554,523

Switzerland – 0.2%14,800 ABB Limited 318,310 296,9765,500 Adecco SA 274,480 318,5831,970 Alcon, Inc. 262,641 340,040

17,364 Credit Suisse Group AG 845,933 897,2569,678 Julius Baer Group Ltd. 560,127 354,633


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AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Switzerland (cont’d)

15,920 Nestle SA 715,109 811,4768,700 Novartis AG 510,521 497,3074,857 Roche Holdings AG 795,782 866,8901,860 Syngenta AG 478,045 546,837

4,760,948 4,929,998

United Kingdom – 0.7%8,100 Anglo American PLC 264,374 368,3096,300 Associated British Foods PLC 104,901 87,838

10,700 AstraZeneca PLC 521,230 528,21921,900 Aviva PLC 302,280 145,722

104,356 BAE Systems PLC 729,977 631,83755,197 Barclays PLC 380,312 255,55241,336 BG Group PLC 849,273 777,71817,814 BHP Billiton PLC 511,690 597,84089,600 BP PLC 998,415 910,41518,446 British American Tobacco PLC 653,904 628,69971,450 BT Group PLC 113,561 162,53915,179 Carnival PLC 412,250 544,58738,781 Centrica PLC 190,680 184,01730,900 GlaxoSmithKline PLC 834,117 687,7034,000 Kazakhmys PLC 88,524 87,930

74,006 Kingfisher PLC 216,747 285,01963,666 Man Group PLC 530,162 329,03542,500 Marks & Spencer Group PLC 292,670 289,6738,462 NEXT PLC 239,378 296,407

156,700 Old Mutual PLC 265,233 287,480134,500 Premier Foods PLC 85,885 80,864

23,160 Rio Tinto PLC 1,189,140 1,311,44441,300 Rolls-Royce Group PLC 262,152 338,619

2,478,000 Rolls-Royce Group PLC, C Shares – 4,20542,661 Standard Chartered PLC 1,025,768 1,122,436

101,908 Tesco PLC 816,319 735,64526,000 Thomas Cook Group PLC 104,468 101,4485,600 Travis Perkins PLC 84,756 80,252

27,700 Tui Travel PLC 116,567 119,78135,210 Tullow Oil PLC 644,598 771,446

364,212 Vodafone Group PLC 1,056,039 886,11213,400 Wolseley PLC 277,744 281,64135,700 WPP Group PLC 312,120 366,25756,330 Xstrata PLC 791,999 1,042,419

15,267,233 15,329,108

United States – 15.0%72,627 3M Company 5,040,413 6,299,705

167,566 Aflac Incorporated 8,093,268 8,139,398215,335 Altera Corporation 5,164,668 5,117,924186,133 American Express Company 7,454,196 7,915,271202,525 Ameriprise Financial, Inc. 8,126,078 8,257,124

95,670 AmerisourceBergen Corporation 2,513,440 2,616,44441,324 Apple Inc. 6,900,433 9,138,457

476,427 Applied Materials, Inc. 6,686,983 6,935,124114,699 AT&T Inc. 3,384,200 3,376,582300,589 BB&T Corporation 8,061,179 8,009,182113,400 Bed Bath & Beyond Inc. 4,687,411 4,600,790103,236 Broadcom Corporation 3,396,403 3,375,242

89,900 Campbell Soup Company 3,224,323 3,191,325196,713 Capital One Financial Corporation 8,046,074 7,920,996106,045 Chevron Corporation 8,138,635 8,571,363347,162 Cisco Systems, Inc. 8,422,707 8,728,728

57,777 Colgate-Palmolive Company 4,373,085 4,983,695123,203 DIRECTV Group Inc., The 3,613,618 4,314,014

89,934 Dow Chemical Company, The 2,677,823 2,609,753


AverageCost ($)

FairValue ($)


72,176 E.I.duPont de Nemours and Company 2,576,439 2,551,53522,821 Eastman Chemical Company 1,425,380 1,442,146

132,908 Exxon Mobil Corporation 10,621,090 9,508,683522,694 Ford Motor Company 4,348,836 5,478,639

29,836 Freeport-McMoRan Copper & Gold Inc., Class B 1,698,749 2,515,919398,871 General Electric Company 5,678,461 6,338,201

14,786 Google Inc. 7,556,837 9,627,71081,348 Hess Corporation 4,985,064 5,165,468

127,645 Honeywell International Inc. 4,767,908 5,252,46195,156 Illinois Tool Works Inc. 5,011,084 4,795,02771,070 Integrys Energy Group, Inc. 2,781,730 3,133,45466,055 International Business Machines Corporation 8,319,823 9,076,27546,056 International Flavors & Fragrances Inc. 1,987,412 1,989,96492,272 Johnson & Johnson 5,932,821 6,234,16275,310 Kellogg Company 3,804,034 4,207,04667,900 Kimberly-Clark Corporation 4,667,002 4,543,306

109,439 Masco Corporation 1,658,779 1,587,30592,139 McDonald’s Corporation 5,922,291 6,038,41238,510 McKesson Corporation 2,480,603 2,527,427

115,550 Medtronic, Inc. 5,257,097 5,333,637177,668 Merck & Co., Inc. 6,496,759 6,810,778286,749 Microsoft Corporation 7,756,992 9,182,353

32,571 Monsanto Company 2,741,243 2,796,49118,568 Mosaic Company, The 1,071,694 1,164,80260,685 Northrop Grumman Corporation 3,499,430 3,556,397

143,323 Peabody Energy Corporation 6,709,627 6,793,22362,300 PepsiCo, Inc. 4,026,305 3,976,234

452,316 Pfizer Inc. 8,112,409 8,641,10580,884 PG&E Corporation 3,576,408 3,792,96413,977 priceline.com Incorporated 1,859,401 3,198,49744,500 Procter & Gamble Company, The 2,771,280 2,832,222

150,658 QUALCOMM Incorporated 7,057,302 7,319,68670,207 Questar Corporation 3,140,140 3,061,48770,100 Reynolds American Inc. 3,956,375 3,899,80390,069 TJX Companies Inc., The 3,545,053 3,456,516

143,019 Travelers Companies, Inc., The 7,729,317 7,487,78893,285 United Technologies Corporation 6,289,743 6,793,448

115,790 UnitedHealth Group Incorporated 3,656,240 3,705,426144,912 Verizon Communications Inc. 4,947,337 5,042,204127,139 Wal-Mart Stores, Inc. 7,076,807 7,134,419125,124 Walgreen Co. 4,413,281 4,820,195149,941 Walt Disney Company, The 4,386,251 5,078,608356,500 Weatherford International Ltd. 6,395,640 6,705,787119,290 WellPoint Inc. 7,185,617 7,291,580127,000 Wells Fargo & Company 3,514,217 3,593,320

321,401,245 339,583,227


TOTAL EQUITIES 1,274,427,011 1,397,007,158




163,169,502 162,250,434



4.70% due Dec. 1, 2017 18,584,220 19,336,209


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AverageCost ($)

FairValue ($)


12,690,000 Province of British Columbia5.70% due Jun. 18, 2029 13,887,963 14,092,969




8,455,000 Province of Quebec4.50% due Dec. 1, 2018 8,443,308 8,639,508


275,098,896 277,289,028


4.60% due Apr. 23, 2018 20,530,033 21,185,358







5.19% due Jun. 12, 2022 10,312,095 9,609,018

73,586,424 67,182,647


5.45% due Sep. 17, 2014 9,195,531 9,389,04710,000,000 Brookfield Renewable Power Inc.*

8.75% due Feb. 3, 2012 10,000,000 10,919,18610,000,000 Canadian Natural Resources Limited


4.94% due Jun. 1, 2012 13,971,228 14,711,8228,000,000 CIBC Capital Trust (callable)

9.98% due Jun. 30, 2108-(2019) 10,551,730 10,363,27910,100,000 Citigroup Inc.* (callable)

4.65% due Oct. 11, 2022-(2017) 9,870,698 8,526,3038,000,000 CU Inc.

4.80% due Nov. 22, 2021 8,021,547 7,802,19711,000,000 EnCana Corporation

4.30% due Mar. 12, 2012 10,945,830 11,482,2665,000,000 EnCana Corporation

5.80% due Jan. 18, 2018 4,986,900 5,324,871


AverageCost ($)

FairValue ($)


8,000,000 Finning International Inc.6.02% due Jun. 1, 2018 8,019,380 8,424,422














254,726,203 262,053,579




3,990,000 Government of Canada Treasury Bills(U.S.) 0.04% due Jan. 19, 2010 4,201,995 4,190,440

8,936,000 Export Development Canada Commercial Paper(U.S.) 0.10% to 0.15% due from

Feb. 11, 2010 to Apr. 19, 2010 9,462,738 9,381,432

78,490,667 78,414,851


Currency Forward Contracts – 0.1% 3,379,641Futures Contracts – 0.0% (118,291)OTHER ASSETS, LESS LIABILITIES – 0.0% (31,164)

NET ASSETS – 100.0% 2,268,613,241



Number of Contracts Contract IssuerContractual

Value Canadian ($)Fair Value


(Depreciation) ($)

155 U.S. S&P 500 Futures – Mar. 2010 45,283,464 45,202,568 (80,896)(386) Canada 10 Year Bond Futures – Mar. 2010 (46,273,680) (45,486,240) 787,440

706,544

The above futures contracts are financial agreements to purchase/sell the bonds at a contracted price on a specific future date. However, the Fund does not intend to purchase the bonds onsettlement. Rather, it intends to close out each futures contract before settlement by entering into equal, but offsetting futures contracts.With respect to the above futures contracts, $600,000 of the June 10, 2010 Government of Canada Treasury Bill and $200,000 of the June 23, 2010 Government of Canada Treasury Bills areheld on margin.The futures contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of A+ by Standard & Poor’s.


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AmountCanadian Value as

at December 31, 2009 ($)

Canadian ($)Appreciation /(Depreciation)

Jan. 6, 2010 Canadian Dollar 198,550,000 U.S. Dollar 186,732,626 196,141,535 2,408,465Jan. 6, 2010 Canadian Dollar 76,219,900 U.S. Dollar 71,702,634 75,315,520 904,380Jan. 6, 2010 Canadian Dollar 3,400,000 U.S. Dollar 3,258,265 3,422,440 (22,440)Feb. 17, 2010 British Pound 531,000 Canadian Dollar 928,898 928,846 (27,747)Feb. 17, 2010 Canadian Dollar 1,504,915 British Pound 853,000 1,447,603 57,312Feb. 17, 2010 Canadian Dollar 740,610 British Pound 453,000 768,774 (28,164)Feb. 17, 2010 Canadian Dollar 1,100,047 European Euro 695,000 1,045,616 54,431Feb. 17, 2010 Canadian Dollar 921,049 European Euro 590,000 887,645 33,404

3,379,641





Canadian Equities 43.7 34.8Foreign Equities 17.8 19.6Bonds and Debentures 34.9 39.0Money Market Instruments 3.5 7.1Currency Forward Contracts 0.1 (0.1)Futures Contracts – 0.1




(Level 2) ($)



Equities 1,331,948,157 65,212,988 – 1,397,161,145Rights – – – –Bonds and Debentures – 789,961,046 – 789,961,046Money Market Instruments – 78,414,851 – 78,414,851Currency Forward Contracts – 3,379,641 – 3,379,641Futures Contracts (Long) (80,896) – – (80,896)

Total Investments 1,331,867,261 936,968,526 – 2,268,835,787



(Level 2) ($)



Options (Written Call) 153,987 – – 153,987Futures Contracts (Short) (787,440) – – (787,440)

Total Investments (633,453) – – (633,453)



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A. Risk managementThe investment objective of the Scotia Canadian Balanced Fund (the “Fund”) isto provide a balance between earning income and obtaining capital growth overthe long term. It invests primarily in a broad range of Canadian equity and fixedincome securities. The Fund’s asset mix will generally vary within the followingranges: 30-70% in equity securities and 30-70% in cash equivalent and fixedincome securities. The portfolio advisor determines the asset mix based on itsanalysis of market conditions and how it expects each asset class to performover the long term. The Fund can invest up to 30% of its assets in foreignsecurities anywhere in the world.


B. Liquidity riskThe Fund’s exposure to liquidity risk arises primarily from the daily cash redemptionof units. The Fund primarily invests in securities that are traded in active marketsand can be readily disposed. In addition, the Fund aims to retain sufficient cash andcash equivalent positions to maintain liquidity, and has the ability to borrow up to5% of its Net Asset Value for the purpose of funding redemptions. The Fund may,from time to time, enter into over-the-counter derivative contracts or invest insecurities that are not traded in an active market and may be illiquid. Illiquidsecurities are identified in the Statement of Investment Portfolio.


CurrencyFinancial




U.S. Dollar 398,304,572 (274,879,495) 123,425,077 5.4European Euro 26,811,196 (1,933,261) 24,877,935 1.1British Pound 15,366,300 (1,287,530) 14,078,770 0.6Japanese Yen 10,099,097 – 10,099,097 0.4Swiss Franc 4,608,419 – 4,608,419 0.2Australian Dollar 3,673,489 – 3,673,489 0.2Hong Kong Dollar 2,565,759 – 2,565,759 0.1Danish Krone 1,146,121 – 1,146,121 0.1Swedish Krona 682,812 – 682,812 0.0Singapore Dollar 438,951 – 438,951 0.0Norwegian Krone 429,981 – 429,981 0.0

Total 464,126,697 (278,100,286) 186,026,411 8.1

December 31, 2008

CurrencyFinancial




U.S. Dollar 304,183,501 (115,785,147) 188,398,354 10.2European Euro 20,901,025 – 20,901,025 1.1British Pound 15,167,070 (1,112,098) 14,054,972 0.8Japanese Yen 9,711,898 – 9,711,898 0.5Swiss Franc 6,539,588 – 6,539,588 0.4Australian Dollar 2,796,436 – 2,796,436 0.1Swedish Krona 1,201,018 – 1,201,018 0.1Norwegian Krone 940,155 – 940,155 0.1

Total 361,440,691 (116,897,245) 244,543,446 13.3



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $12,549,891, 0.6% of the Fund’s Net Assets(December 31, 2008- $12,084,026, 0.7% of the Fund’s Net Assets). The Fund’ssensitivity to interest rate fluctuations was estimated using the weightedaverage duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.






Total 789,961,046 717,152,879












AAA 31.7 11.1 20.5 8.0AA 35.4 12.3 46.6 18.2A 30.2 10.5 28.8 11.2BBB 2.7 1.0 4.1 1.6

Total 100.0 34.9 100.0 39.0


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark stock indices of, 55% S&P/TSX CompositeIndex and 45% DEX Universe Bond Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $435,573,742, 19.2% of the Fund’s Net Assets (December 31,2008- $165,708,189, 9.0% of the Fund’s Net Assets). The Fund’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.


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Scotia Canadian Tactical Asset Allocation FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $446,449,702 $355,655,020Cash 1,528,166 999,012Accrued investment income 1,517,385 1,667,655Receivable for securities sold 1,825,520 6,884,943Subscriptions receivable 285,292 194,828Receivable for bond futures contracts 562,662 5,026Receivable for currency forward contracts – 574,829

452,168,727 365,981,313

LIABILITIESPayable for securities purchased 3,714,273 6,010,102Distributions payable 341 669Redemptions payable 169,658 97,401Accrued expenses 386,127 643,960Payable for currency futures contracts 312,570 739,219Payable for currency forward contracts 283,579 –

4,866,548 7,491,351

Net Assets $447,302,179 $358,489,962

NET ASSETS PER CLASSClass A Units $446,701,590 $358,070,624Advisor Class Units $ 578,575 $ 401,975Class F Units $ 22,014 $ 17,363


NET ASSET PER UNITClass A Units $ 16.75 $ 13.92Advisor Class Units $ 16.54 $ 13.75Class F Units $ 16.95 $ 14.12



13,738,917 14,637,066

EXPENSESManagement fees (note 4) 6,911,967 7,489,728Audit fees 24,160 19,848Independent Review Committee fees 2,532 2,497Custodian fees 169,615 136,168Filing fees 46,113 32,560Legal fees 15,558 14,679Unitholder reporting 68,125 71,313Unitholder administration, service fees and GST 827,876 868,712


8,044,986 8,584,489


Net realized gain (loss) on investments sold (25,055,262) (7,810,603)Net realized gain (loss) on currency futures 212,284 (943,166)Net realized gain (loss) on currency forwards 1,520,682 (2,102,283)Net realized gain (loss) on foreign exchange (45,415) (565,829)Transaction costs (609,157) (755,783)Change in unrealized appreciation (depreciation) of investments 99,506,918 (88,779,089)Change in unrealized appreciation (depreciation) of currency forwards (858,408) 297,827Change in unrealized appreciation (depreciation) of currency futures 372,015 (112,502)


Increase (decrease) in Net Assets from operations $ 80,737,588 $ (94,718,851)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 80,625,810 $ (94,668,172)Advisor Class Units $ 107,727 $ (46,360)Class F Units $ 4,051 $ (4,319)

INCREASE (DECREASE) FROM OPERATIONS PER UNITClass A Units $ 3.07 $ (3.69)Advisor Class Units $ 3.21 $ (4.85)Class F Units $ 3.20 $ (3.62)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $358,070,624 $455,720,046Advisor Class Units 401,975 –Class F Units 17,363 21,142

358,489,962 455,741,188


80,737,588 (94,718,851)


Class A Units (5,591,512) (5,688,843)Advisor Class Units (6,433) (4,485)Class F Units (445) (459)

(5,598,390) (5,693,787)


Class A Units 46,672,964 50,272,609Advisor Class Units 76,117 449,107Class F Units 600 600

Reinvested distributionsClass A Units 5,571,252 5,669,033Advisor Class Units 5,389 3,713Class F Units 445 459

Payments on redemptionClass A Units (38,647,548) (53,234,049)Advisor Class Units (6,200) –Class F Units – (60)

13,673,019 3,161,412

INCREASE (DECREASE) IN NET ASSETSClass A Units 88,630,966 (97,649,422)Advisor Class Units 176,600 401,975Class F Units 4,651 (3,779)

88,812,217 (97,251,226)

TOTAL NET ASSETS – END OF PERIODClass A Units 446,701,590 358,070,624Advisor Class Units 578,575 401,975Class F Units 22,014 17,363

$447,302,179 $358,489,962


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AverageCost ($)

FairValue ($)


25,000 Angle Energy Inc. 127,790 167,50022,500 ARC Energy Trust 385,285 448,65091,200 Birchcliff Energy Ltd. 609,612 857,28099,900 BlackWatch Energy Services Corporation 74,658 106,89316,250 Bonterra Oil & Gas Ltd. 417,788 563,22515,150 Calfrac Well Services Ltd. 304,984 313,151

124,140 Canadian Natural Resources Limited 6,669,674 9,393,67442,600 Canadian Oil Sands Trust 1,377,978 1,268,62828,113 Celtic Exploration Ltd. 363,077 584,469

192,400 Cenovus Energy Inc. 4,982,006 5,092,82838,650 Cirrus Energy Corporation 90,561 98,55848,700 Crescent Point Energy Corp. 1,656,016 1,921,21514,100 Enbridge Inc. 585,564 684,555

177,500 EnCana Corporation 5,205,368 6,043,87574,200 Husky Energy Inc. 2,327,836 2,227,48420,614 Keyera Facilities Income Fund 347,923 501,74511,450 Major Drilling Group International Inc. 198,772 326,32537,700 Mullen Group Ltd. 613,634 613,002

156,470 Nexen Inc. 3,733,975 3,933,6566,300 Niko Resources Ltd. 506,956 618,849

22,800 NuVista Energy Ltd. 260,640 283,17629,000 Orleans Energy Ltd. 93,687 68,150

5,000 Pacific Northern Gas Ltd. 83,328 93,55012,950 Pacific Rubiales Energy Corp. 81,065 199,43063,200 Paladin Energy Limited 245,161 247,11211,250 Pason Systems Inc. 122,268 130,72543,900 Penn West Energy Trust 842,385 813,028

210,175 Precision Drilling Trust 1,260,784 1,597,33041,456 Progress Energy Resources Corp. 538,251 584,53013,500 ShawCor Ltd. 372,228 395,28034,100 Storm Exploration Inc. 386,371 443,641

316,936 Suncor Energy, Inc. 9,974,094 11,761,495327,600 Talisman Energy Inc. 4,957,063 6,404,58039,500 TransCanada Corporation 1,309,993 1,427,925

5,350 Trican Well Service Ltd. 80,624 74,79323,700 Trinidad Drilling Ltd. 134,593 166,13739,400 Vermilion Energy Trust 1,175,074 1,276,560

52,497,066 61,733,004

Materials – 11.2%102,600 Agrium Inc. 4,815,728 6,639,246111,800 Anvil Mining Limited 266,535 356,64212,600 Athabasca Potash Inc. 76,539 73,206

226,132 Barrick Gold Corporation 8,674,608 9,361,865306,200 Breakwater Resources, Ltd. 78,443 125,54279,300 Cameco Corporation 2,108,919 2,681,13376,580 Cascades Inc. 623,779 684,625

265,442 Cathay Forest Products Corp. 238,983 156,61111,100 Centerra Gold Inc. 83,220 118,54818,800 Colossus Minerals Inc. 108,100 108,28844,719 Consolidated Thompson Iron Mines Limited 152,999 300,959

8,550 Consolidated Thompson Iron Mines Limited (Restricted)* 37,620 57,54216,300 Detour Gold Corporation 210,191 290,303


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Materials (cont’d)

20,739 Domtar Corporation 1,417,749 1,205,97323,200 Eldorado Gold Corporation 170,327 344,984

110,600 Equinox Minerals Limited 212,751 446,824104,600 FNX Mining Company Inc. 953,550 1,203,946244,600 Gerdau Ameristeel Corporation 1,887,139 2,128,02051,900 Goldcorp, Inc. 1,779,264 2,143,989

5,500 IAMGOLD Corporation 52,960 90,69520,200 Inmet Mining Corporation 1,274,245 1,283,91290,047 Kinross Gold Corporation 1,762,414 1,740,60916,574 Labrador Iron Ore Royalty Income Fund 493,646 721,63271,000 Lundin Mining Corporation 175,136 303,17080,450 Mercator Minerals Ltd. 206,134 199,51665,900 Methanex Corporation 1,044,278 1,346,33717,000 Migao Corporation 111,108 118,15017,500 Minefinders Corporation Ltd. 172,772 189,70058,400 New Gold Inc. 216,835 220,75243,750 Osisko Mining Corporation 280,872 368,81340,200 Potash Corporation of Saskatchewan Inc. 4,234,616 4,587,22220,200 Potash One Inc. 46,950 51,10641,700 Red Back Mining Inc. 287,958 620,49666,600 Russel Metals Inc. 1,225,887 1,175,49039,500 SEMFAFO Inc. 184,702 173,010

372,120 Sherritt International Corporation 2,550,042 2,429,94451,650 Silver Wheaton Corp. 792,173 815,55423,579 Sino-Forest Corporation 376,082 455,54622,328 Taseko Mines Ltd. 63,785 98,24376,300 Teck Resources Limited, Class B 1,637,881 2,800,21013,800 Thompson Creek Metals Company, Inc. 206,515 169,740

136,000 Yamana Gold Inc. 1,644,188 1,626,560

42,937,623 50,014,653

Industrials – 2.9%18,900 Aecon Group Inc. 234,111 282,933

4,100 AG Growth International, Inc. 117,338 142,680525,900 Azure Dynamics Corporation 89,998 94,66249,600 Brookfield Infrastructure Partners LP 772,020 863,04095,000 Canadian National Railway Company 4,459,188 5,429,25032,900 Canadian Pacific Railway Limited 1,583,003 1,865,430

3,500 CCL Industries Inc., Class B 77,533 97,9658,400 Celestica Inc. 73,646 83,076

18,531 Contrans Group Inc. 91,428 128,42029,150 Fortress Paper Limited 182,187 276,92531,700 IESI-BFC Ltd. 487,107 531,609

4,900 MacDonald, Dettwiler and Associates Ltd. 175,111 208,64237,700 Martinrea International Inc. 273,416 317,057

7,100 Quebecor Inc., Class B 140,045 192,4818,350 Rocky Mountain Dealerships Inc. 62,902 75,317

13,800 Seacliff Construction Corp. 174,750 152,35223,600 SNC-Lavalin Group Inc. 747,054 1,272,51233,690 Tonbridge Power, Inc. 77,185 69,40114,050 Tonbridge Power, Inc. Warrants $2.15 Jun. 17, 2011* – –

9,600 Toromont Industries Ltd. 235,257 266,304


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AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Industrials (cont’d)

40,500 Westshore Terminals Income Fund 605,441 576,72025,000 Xtreme Coil Drilling Corporation 102,970 104,250

10,761,690 13,031,026

Consumer Discretionary – 2.9%14,100 Canadian Tire Corporation, Limited 671,989 808,63512,000 Cervus Equipment Corp. 116,892 150,00020,500 Cineplex Galaxy Income Fund 318,539 373,510

6,250 Cogeco Cable Inc. 234,919 218,25022,264 Corus Entertainment Inc., Class B 387,027 439,714

8,000 Forzani Group Ltd., The 111,705 112,4808,000 Gamehost Income Fund 87,448 60,480

56,500 Great Canadian Gaming Corporation 322,353 444,09035,355 Linamar Corporation 157,908 486,13145,110 Magna International Inc. 2,135,448 2,398,95017,212 Metro Inc. 539,090 674,710

3,200 Reitmans (Canada) Limited 33,400 53,312154,100 RONA inc. 2,339,470 2,377,76370,400 Shaw Communications, Inc., Class B 1,461,261 1,520,64067,500 Thomson Reuters Corporation 2,476,980 2,288,25011,300 TVA Group Inc., Class B 115,259 149,72541,400 Yellow Pages Income Fund 386,722 221,90430,684 Zungui Haixi Cororation 99,723 96,655

11,996,133 12,875,199

Consumer Staples – 1.1%14,350 Alliance Grain Traders, Inc. 228,462 429,06519,246 Cott Corporation 123,129 165,90146,100 Gildan Activewear Inc. 600,029 1,178,77799,370 Maple Leaf Foods Inc. 1,133,942 1,152,69224,200 Saputo Inc. 618,749 744,150

140,700 Viterra, Inc. 1,327,994 1,387,302

4,032,305 5,057,887

Health Care – 0.1%42,300 CML Healthcare Income Fund 626,704 584,163

Financials – 15.5%24,800 Allied Properties Real Estate Investment Trust 336,623 477,40037,700 Altus Income Fund 292,153 447,122

6,800 Bank of Montreal 370,314 379,372247,800 Bank of Nova Scotia, The 10,431,794 12,189,282

2,700 Boardwalk Real Estate Investment Trust 95,785 99,30660,600 Brookfield Asset Management Inc. 1,552,259 1,414,40412,700 Canaccord Capital Inc. 107,135 130,42914,900 Canadian Apartment Properties Real Estate Investment Trust 193,119 208,898

134,750 Canadian Imperial Bank of Commerce 8,277,102 9,156,26212,700 Canadian Western Bank 280,243 278,13071,300 Chartwell Seniors Housing Real Estate Investment Trust 321,390 499,81334,800 CI Financial Corp. 692,003 761,07628,025 DundeeWealth Inc. 151,476 385,344

675 E-L Financial Corporation Limited 318,625 303,7578,950 Extendicare Real Estate Investment Trust 46,807 84,846

21,150 First Capital Realty Inc. 363,945 454,93727,300 Genivar Income Fund 625,849 738,46516,034 Gluskin Sheff + Associates Inc. 214,223 329,499


AverageCost ($)

FairValue ($)


46,700 Guardian Capital Group Ltd. 203,112 359,5906,600 H&R Real Estate Investment Trust 93,786 101,640

42,850 IBI Income Fund 554,004 715,59518,375 Industrial Alliance Insurance and Financial Services Inc. 576,297 590,205

7,700 Intact Financial Corporation 246,820 283,976348,110 Manulife Financial Corporation 8,173,446 6,718,52317,000 Power Corporation of Canada 484,638 495,040

266,600 Royal Bank of Canada 10,793,113 15,025,57597,600 Sun Life Financial Inc. 3,500,219 2,944,59214,700 TMX Group Inc. 598,278 486,717

201,380 Toronto-Dominion Bank, The 10,666,372 13,278,997

60,560,930 69,338,792

Information Technology – 1.4%19,100 Bridgewater Systems Corp. 159,153 160,631

5,350 CGI Group Inc. 52,792 75,9704,300 Constellation Software Inc. 105,096 156,950

13,850 DragonWave Inc. 132,957 166,2009,550 Exfo Electro-Optical Engineering Inc. 37,856 38,2967,800 Open Text Corporation 240,637 332,592

156,550 Peer 1 Network Enterprises, Inc. 180,890 161,24766,600 Research In Motion Limited 4,972,858 4,725,93620,400 Ruggedcom, Inc. 261,096 366,38463,750 Sandvine Corporation 88,696 82,238

6,232,031 6,266,444

Telecommunication Services – 2.4%112,541 BCE Inc. 3,054,851 3,258,06214,432 Evertz Technologies Limited 266,417 187,760

144,900 Rogers Communications, Inc., Class B 4,194,495 4,717,94471,600 TELUS Corporation Non-Voting 2,371,470 2,337,74010,529 TeraGo Inc. 50,013 52,645

9,937,246 10,554,151

Utilities – 0.3%132,100 Algonquin Power & Utilities Corp. 463,475 535,00528,550 Northland Power Income Fund 322,121 339,17413,200 TransAlta Corporation 360,202 309,540

1,145,798 1,183,719



66,700 Andean Resources Limited 125,427 160,08049,100 Centamin Egypt Limited 62,384 100,16453,600 Mirabela Nickel Limited 63,725 126,496

251,536 386,740

Belgium – 0.0%3,150 Agfa Gevaert NV 38,560 21,1521,895 Belgacom SA 79,482 71,6873,197 Umicore 118,719 111,654

236,761 204,493

Bermuda – 0.0%2,200 Endurance Specialty Holdings Ltd. 85,387 86,022


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AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Brazil – 0.0%

8,400 BM&F BOVESPA SA 58,971 62,003

Cayman Islands – 0.0%4,300 Fresh Del Monte Produce Inc. 86,513 99,715

Denmark – 0.0%1,407 H Lundbeck A/S 32,206 26,857

Finland – 0.0%3,478 Sampo Oyj, Series A 89,613 88,528

France – 0.8%17,222 AXA SA 380,279 427,175

5,516 BNP Paribas 454,879 456,5245,934 Compagnie Generale des Etablissements Michelin, Class B 492,897 477,376

12,488 Credit Agricole SA 286,877 228,33321,025 Sanofi-Aventis 1,531,212 1,728,48511,661 Valeo SA 217,548 425,240

3,363,692 3,743,133

Germany – 0.9%19,636 BASF SE 1,241,352 1,285,601

2,783 Heidelbergcement AG 202,774 198,7304,256 K+S AG 266,999 256,584

496 Linde AG 63,763 62,614830 METRO AG 52,962 53,471

5,479 Salzgitter AG 551,597 563,1795,812 Suedzucker AG 138,464 126,644

28,443 ThyssenKrupp AG 1,093,286 1,131,1401,017 Wacker Chemie AG 184,024 186,030

3,795,221 3,863,993

Hong Kong – 1.1%15,600 ASM Pacific Technology Limited 123,755 153,993

122,000 BOC Hong Kong (Holdings) Limited 279,709 288,16124,000 Cheung Kong (Holdings) Limited 324,926 323,222

110,000 Chinese Estates Holdings Limited 204,840 196,71622,552 Esprit Holdings Limited 171,123 155,87812,000 Hang Lung Group Limited 62,572 62,34683,000 Hang Lung Properties Limited 309,601 340,56015,800 Hang Seng Bank Limited 247,595 244,11151,900 Hong Kong Exchanges & Clearing Limited 1,007,549 970,33551,000 Hongkong Electric Holdings Limited 283,759 291,02150,500 Hopewell Holdings Limited 169,796 170,86884,500 Link Reit, The 206,302 225,828

185,000 New World Development Company Limited 423,869 396,5347,000 Orient Overseas International Ltd. 41,265 34,123

73,000 Pacific Basin Shipping Limited 43,905 54,8661,567,977 Solomon Systech International Limited 340,493 166,560

30,000 Sun Hung Kai Properties Limited 472,480 467,50410,500 Swire Pacific Limited 129,877 132,936

9,500 Yue Yuen Industrial (Holdings) Limited 29,976 28,815

4,873,392 4,704,377

Ireland – 0.0%44,974 Anglo Irish Bank Corporation Ltd. PLC 85,826 –64,675 Governor and Company of the Bank of Ireland, The 157,417 127,700

243,243 127,700


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Italy – 0.2%

1,800 Prysmian SpA 33,271 33,04630,312 Tenaris SA 658,389 679,709

691,660 712,755

Japan – 1.2%31,200 Alps Electric Co., Ltd. 170,942 192,40321,500 Astellas Pharma Inc. 953,354 841,496

1,600 Brother Industries, Ltd. 16,004 19,2066,000 Chugai Pharmaceutical Co., Ltd. 129,510 117,4566,000 Dowa Holdings Co. Ltd. 35,627 34,991

11,600 FUJIFILM Holdings Corporation 360,750 364,13896,000 Fujitsu Limited 551,977 648,712

1,000 Hitachi Cable, Ltd. 6,819 3,17363,000 Hitachi, Ltd. 179,884 202,75235,000 Mazda Motor Corporation 85,069 84,086

5,000 Mitsubishi Tanabe Pharma Corporation 63,642 65,33845,000 Mitsui Chemicals Inc. 129,638 121,59319,000 Mitsui Mining & Smelting Co. Ltd. 52,203 51,66819,100 Mitsumi Electric Co., Ltd. 344,611 353,149

2,000 Nissan Chemical Industries, Ltd. 30,025 29,92619,800 Nissan Motor Co., Ltd. 142,195 181,836

2,200 Ono Pharmaceutical Co., Ltd. 111,499 98,7737,100 Santen Pharmaceutical Co., Ltd. 224,706 238,544

36,400 Sojitz Corporation 82,185 71,84711,000 Sumitomo Metal Mining Co., Ltd. 182,015 170,38719,000 Sumitomo Trust & Banking Co., Ltd., The 110,649 97,05510,000 Taisho Pharmaceutical Company Ltd. 203,871 179,77823,000 Takeda Pharmaceutical Company Limited 1,082,244 992,210

3,000 Tokai Rika Co., Ltd. 31,378 70,94012,000 Tosoh Corporation 34,428 34,702

4,800 Toyota Tsusho Corporation 74,176 74,37624,000 Ube Industries Ltd. 66,352 69,050

5,455,753 5,409,585

Netherlands – 0.7%8,741 Akzo Nobel NV 593,321 604,2512,231 ASML Holding NV 73,931 79,585

28,432 Koninklijke (Royal) Philips Electronics NV 795,881 882,94545,366 Koninklijke Ahold NV 609,624 631,232

5,663 Koninklijke DSM NV 254,305 291,2114,355 Royal Dutch Shell PLC 124,808 138,1568,918 Unilever NV 281,586 304,772

2,733,456 2,932,152

Russia – 0.0%3,654 Mechel OAO, Sponsored ADR 70,374 72,1092,240 Open Joint Stock Company Mining and Metallurgical

Company Norilsk Nickel ADR 14,126 33,008

84,500 105,117

Singapore – 0.6%88,000 CapitaMall Trust 115,523 117,17129,000 City Developments Limited 220,979 248,40625,600 Flextronics International Ltd. 91,396 196,54018,000 Fraser & Neave Ltd. 55,976 56,168

154,800 Golden Agri-Resources Limited 37,203 58,526


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EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Singapore (cont’d)

4,000 Jardine Cycle & Carriage Limited 64,495 80,15154,000 Keppel Corporation Limited 285,451 329,94182,000 Noble Group Limited 99,838 197,27656,000 SembCorp Industries Limited 145,105 153,57373,000 SembCorp Marine Limited 163,797 199,75826,000 Singapore Exchange Limited 165,634 160,93621,000 Singapore Press Holdings Ltd. 50,475 57,30929,000 United Overseas Bank Limited 383,323 423,78434,000 Wilmar International Ltd. 137,098 162,027

2,016,293 2,441,566

South Africa – 0.0%10,885 Sanlam Limited 24,381 35,070

Spain – 0.1%39,857 Sacyr Vallehermoso SA 790,465 476,549

Sweden – 1.6%46,904 AB Electrolux, Class B 515,787 1,155,510

9,973 Alfa Laval AB 141,012 144,08920,258 Atlas Copco AB 299,066 310,73410,636 Atlas Copco AB, Class B 136,978 144,81515,405 Hennes & Mauritz AB, Class B 831,638 894,766

1,525 Holmen AB, B Shares 40,879 40,82837,776 Husqvarna AB, B Shares 237,528 292,722

128,427 Nordea Bank AB 1,168,167 1,365,54514,981 Scania AB, B Shares 204,642 201,676

6,539 Skanska AB, Class B 104,445 116,7926,476 SKF AB, Class B 113,396 116,7506,891 SSAB Svenskt Staal AB, Series A 121,681 122,2832,091 SSAB Svenskt Staal AB, Series B 33,612 33,925

35,980 Svenska Cellulosa AB SCA, Class B 511,051 504,4592,219 Svenska Handelsbanken AB 44,560 66,611

11,857 Swedish Match AB 209,537 272,05430,257 Tele2 AB, Class B 360,994 486,530

109,478 Telefonaktiebolaget LM Ericsson, Class B 1,094,667 1,056,917

6,169,640 7,327,006

Thailand – 0.0%235,600 CP All Public Company Limited 132,218 183,574

Turkey – 0.5%10,333 Akbank T.A.S. 62,923 68,48562,799 Arcelik A.S. 87,508 256,384

3,098 Bim Birlesik Magazalar AS 122,635 150,495138,659 Dogan Sirketler Grubu Holding AS 101,096 100,162

9,747 Ford Otomotiv Sanayi AS 37,174 61,89022,197 Haci Omer Sabanci Holding AS 68,345 89,483

7,187 Koc Holding AS 19,068 22,15521,379 Tupras-Turkiye Petrol Rafinerileri AS 233,528 443,57518,674 Turkiye Garanti Bankasi AS 58,312 83,11533,247 Turkiye Halk Bankasi AS 146,406 277,39453,722 Turkiye IS Bankasi, Class C 214,242 237,26076,364 Turkiye Vakiflar Bankasi T.A.O. 135,230 226,340

1,286,467 2,016,738


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United Kingdom – 2.6%

34,414 AstraZeneca PLC 1,698,589 1,698,89197,832 BAE Systems PLC 728,689 592,33743,238 Barratt Developments PLC 324,605 90,812

2,129 BG Group PLC 43,414 40,056687 BHP Billiton PLC 14,178 23,056

122,446 BP PLC 1,284,665 1,244,1591,984 British American Tobacco PLC 64,006 67,621

13,818 British Sky Broadcasting Group PLC 120,674 130,77897,436 BT Group PLC 259,065 221,65375,062 Compass Group PLC 454,844 563,257

6,846 CSR PLC 47,116 47,14836,929 Enterprise Inns PLC 127,182 58,50517,814 Eurasian Natural Resources Corporation 212,839 276,04866,301 GKN PLC 360,431 129,74983,019 GlaxoSmithKline PLC 1,867,584 1,847,65241,773 Home Retail Group PLC 155,312 200,060

7,513 IMI PLC 34,898 66,05412,577 InterContinental Hotels Group PLC 143,965 189,09255,685 Kingfisher PLC 200,247 214,46033,113 Ladbrokes PLC 137,458 76,55336,559 Melrose PLC 112,079 110,66730,183 Mondi PLC 287,987 171,344

3,262 NEXT PLC 64,496 114,2616,334 Pearson PLC 72,699 95,666

54,523 Punch Taverns PLC 308,737 62,77481,646 Rolls-Royce Group PLC 566,944 669,416

4,898,760 Rolls-Royce Group PLC, C Shares – 8,31322,295 Royal Dutch Shell PLC 788,939 707,230

2,664 Royal Dutch Shell PLC ADR 166,530 168,18028,531 Royal Dutch Shell PLC, Class B 1,081,184 873,495

1,909 Shire PLC 39,654 39,22247,507 Smith & Nephew PLC 515,687 512,507

102,294 Taylor Wimpey PLC 169,146 67,3943,234 Trinity Mirror PLC 20,256 8,137

56,226 Vodafone Group PLC 139,691 136,7951,055 Whitbread PLC 16,406 24,928

12,630,196 11,548,270

United States – 11.2%8,200 Aaron’s, Inc. 240,957 238,7271,700 ACE Ltd. 89,225 89,986

11,700 Acxiom Corporation 119,929 164,4131,400 Alliant Techsystems Inc. 115,443 129,6854,200 Allied World Assurance Company Holdings, Ltd. 208,809 203,130

200 Amazon.com, Inc. 28,263 28,2564,800 Ameren Corporation 130,517 140,9022,900 American Electric Power 93,724 105,9312,800 American Express Company 94,062 119,0696,600 American Financial Group, Inc. 173,096 172,9453,700 Ameriprise Financial, Inc. 144,660 150,852

11,700 Amgen Inc. 722,106 695,1319,200 Amkor Technology, Inc. 98,865 68,3131,100 Anadarko Petroleum Corporation 74,345 72,1131,421 AOL Inc. 31,707 34,743

600 Apple Inc. 124,959 132,685


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7,400 Archer Daniels Midland Company 233,888 243,3384,300 Assurant, Inc. 141,844 133,134

52,225 AT&T Inc. 1,580,136 1,537,43346,656 Bank of America Corporation 1,000,451 737,95015,000 Barnes & Noble, Inc. 343,146 299,323

3,900 Biogen Idec Inc. 220,075 219,13635,200 Boston Scientific Corporation 339,802 331,981

4,300 Bristol-Myers Squibb Company 111,822 113,98610,500 Cal Dive International, Inc. 86,064 83,259

1,200 Capital One Financial Corporation 38,602 48,3201,600 Cardinal Health, Inc. 46,887 54,1601,600 Carnival Corporation 53,602 53,2521,200 Caterpillar Inc. 71,718 71,825

11,200 Central Garden & Pet Company 114,351 115,98211,900 CentrePoint Energy, Inc. 153,271 181,096

2,700 Cephalon, Inc. 169,976 176,97511,370 Chevron Corporation 945,036 919,010

4,600 Chiquita Brands International, Inc. 48,065 87,10624,500 Cisco Systems, Inc. 546,726 616,00629,700 Citigroup Inc. 264,529 103,247

8,200 Coca-Cola Enterprises Inc. 171,341 182,49037,800 Comcast Corporation 624,490 669,336

1,800 CommScope Inc. 52,086 50,15411,200 Computer Sciences Corporation 543,584 676,71720,700 ConocoPhillips 1,134,035 1,109,18922,100 Conseco Inc. 125,537 116,053

9,300 Constellation Brands, Inc. 136,200 155,49723,900 Convergys Corporation 242,087 269,837

2,500 CVS Caremark Corporation 86,958 84,54612,000 Dean Foods Company 220,334 227,23321,500 Dell Inc. 269,203 324,256

8,600 DISH Network Corp. 157,597 187,5998,000 DTE Energy Company 298,799 366,245

49,900 EarthLink, Inc. 438,390 431,31511,100 eBay Inc. 226,264 274,425

5,000 Edison International 177,415 182,63917,300 Eli Lilly and Company 709,070 648,103

7,500 Emerson Electric Co. 318,263 335,5569,200 EnPro Industries, Inc. 213,764 255,182

17,200 Exxon Mobil Corporation 1,367,367 1,230,5463,600 Fairchild Semiconductor International, Inc 40,177 37,7712,200 FedEx Corporation 197,376 192,5395,100 Fidelity National Information Service, Inc. 121,471 125,5529,700 FirstEnergy Corp. 443,427 473,106

20,600 Ford Motor Company 175,734 215,9206,800 Forest Laboratories, Inc. 179,770 229,250

300 Freeport-McMoRan Copper & Gold Inc., Class B 26,232 25,2977,000 Gannett Co., Inc. 88,636 109,1741,300 General Dynamics Corporation 86,954 92,979

62,400 General Electric Company 1,437,990 991,5582,600 Genzyme Corporation 143,173 133,8307,300 Gilead Sciences, Inc. 357,416 331,8222,300 Goldman Sachs Group, Inc., The 388,390 407,219

300 Google Inc. 146,736 195,34129,400 Gran Tierra Energy, Inc. 107,475 176,400


AverageCost ($)

FairValue ($)


1,900 Harris Corporation 63,801 94,8859,000 Health Net Inc. 160,669 220,1446,100 Healthspring, Inc. 63,997 112,563

17,900 Hewlett-Packard Company 837,704 967,6136,000 Hill-Rom Holdings, Inc. 92,347 151,1749,400 Home Depot Inc., The 264,192 285,3124,700 Hospitality Properties Trust 97,898 117,0373,900 Humana Inc. 181,560 179,4453,100 Innophos Holdings Inc. 74,283 74,7533,300 Insight Enterprises, Inc. 28,894 39,407

47,500 Intel Corporation 994,028 1,017,6978,800 International Business Machines Corporation 1,065,470 1,209,162

24,000 iShares iBoxx $ High Yield Corporate Bond Fund ETF 2,110,373 2,208,05510,300 Investment Technology Group, Inc. 256,910 213,107

7,100 J.C. Penney Company, Inc. 229,296 198,2023,900 JDA Software Group, Inc. 50,114 104,120

10,900 Johnson & Johnson 715,315 736,43516,600 JPMorgan Chase & Co. 740,549 726,484

6,600 Kimberly-Clark Corporation 428,262 441,6175,100 Kindred Healthcare Inc. 84,253 98,6636,000 Kinetic Concepts, Inc. 197,941 237,2539,200 Knight Capital Group Inc. 176,424 148,220

12,200 Lexmark International, Inc. 318,529 332,8852,900 Lockheed Martin Corporation 227,563 229,314

12,100 Macy’s, Inc. 202,486 212,9877,700 Medtronic, Inc. 300,007 355,4227,700 MEMC Electronic Materials, Inc. 134,100 110,064

18,000 Merck & Co., Inc. 650,446 690,01740,100 Microsoft Corporation 1,100,309 1,284,093

7,900 Mirant Corporation 148,434 126,6952,200 Morgan Stanley 73,172 68,346

18,600 Motorola, Inc. 143,588 151,3943,800 NASDAQ OMX Group, Inc., The 84,281 79,1015,800 National-Oilwell Varco Inc. 273,382 268,573

13,800 NCI Building Systems Inc. 67,114 26,2331,600 Newmont Mining Corporation 74,321 79,500

12,300 NiSource Inc. 166,444 198,6816,000 Noble Corporation 260,175 256,472

14,800 Northrop Grumman Corporation 790,227 867,3422,800 NutriSystem, Inc. 50,660 90,8095,900 NYSE Euronext 173,552 156,5863,300 Oil States International, Inc. 62,916 136,1385,600 Olin Corporation 97,574 103,043

10,400 Omnicare, Inc. 248,028 264,11013,800 Oracle Corporation 315,457 355,671

5,700 Pantry, Inc. The 115,184 81,0577,000 PartnerRe Ltd. 542,095 548,8846,400 Patriot Coal Corp. 89,204 103,9167,000 Pepco Holdings, Inc. 108,044 123,8782,700 PepsiCo, Inc. 175,694 172,325

71,700 Pfizer Inc. 1,428,337 1,369,7668,300 PHH Corporation 138,592 140,2581,100 Philip Morris International Inc. 58,092 55,6049,900 Procter & Gamble Company, The 621,559 630,090

12,400 ProLogis 107,727 178,287


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4,100 Rayonier Inc. 171,329 181,15510,300 Raytheon Company 521,416 557,32411,500 Rent-A-Center, Inc. 246,997 213,538

6,400 Rowan Companies, Inc. 162,869 152,1783,900 Ryder System, Inc. 132,634 168,3453,700 Safety Insurance Group, Inc. 165,711 140,3218,300 Sara Lee Corporation 91,818 106,0872,100 Scotts Miracle-Gro Company, The 89,261 86,700

54,100 SPDR Barclays Capital High Yield Bond ETF 2,123,737 2,209,11410,700 Sprint Nextel Corporation 99,724 41,13025,600 SUPERVALU INC 435,179 341,45935,000 Symantec Corporation 602,880 657,61711,500 Texas Instruments Incorporated 276,742 314,388

3,600 Thermo Fisher Scientific, Inc. 164,930 180,1233,900 Tidewater Inc. 184,983 196,198

15,733 Time Warner Inc. 433,132 481,0046,500 Transocean Ltd. 586,415 564,8378,300 Travelers Companies, Inc., The 412,031 434,5485,600 Tutor Perini Corporation 118,642 106,3367,900 Tyco International Ltd. 261,544 296,037

24,800 United Online, Inc. 255,988 187,2737,200 USA Mobility, Inc. 83,301 82,651

19,300 Verizon Communications Inc. 658,512 671,5422,600 Viacom, Inc., Class B 80,918 81,073

15,300 Vishay Intertechnology, Inc. 106,741 134,1755,300 Wal-Mart Stores, Inc. 285,832 297,4104,200 Walgreen Co. 168,758 161,798

25,200 Wells Fargo & Company 754,133 713,0052,600 Western Digital Corporation 84,235 120,559

700 Whirlpool Corporation 32,940 59,2552,400 Wright Express Corp. 68,637 80,307

39,600 Xerox Corporation 401,659 351,020

48,979,600 49,985,472


TOTAL EQUITIES 294,838,690 327,206,453


714,000 Canada Housing Trust No. 14.10% due Dec. 15, 2018 727,280 726,933




13,482,786 13,338,005

Provincial Bonds – 5.0%1,705,000 Hydro-Quebec 1,368,112 1,388,552

Stripped Coupon due Aug. 15, 2015450,000 Ontario Electricity Financial Corporation

8.25% due Jun. 22, 2026 618,312 618,7281,376,000 Province of Alberta

4.00% due Dec. 1, 2019 1,365,316 1,356,184


AverageCost ($)

FairValue ($)


1,995,000 Province of British Columbia9.00% due Aug. 23, 2024 2,940,291 2,890,667

62,000 Province of New Brunswick4.65% due Sep. 26, 2035 63,164 59,350

227,000 Province of New Brunswick4.55% due Mar. 26, 2037 226,122 215,463

94,000 Province of Newfoundland and Labrador4.50% due Apr. 17, 2037 93,418 88,479


4,184,000 Province of OntarioStripped Coupon due Dec. 02, 2019 2,590,320 2,615,745

540,000 Province of OntarioStripped Coupon due Jun. 02, 2026 270,907 228,556

893,000 Province of Ontario6.50% due Mar. 8, 2029 1,105,088 1,074,832

6,906,000 Province of QuebecStripped Coupon due Dec. 01, 2015 5,442,996 5,515,415


22,417,686 22,414,927

Mortgage-Backed Securities – 1.2%1,660,000 Claregold Trust*

5.07% due May 15, 2044 1,492,733 1,632,7771,164,000 Mansfield Trust*

6.57% due Nov. 15, 2025 211,070 1,172,156418,000 Merrill Lynch Financial Assets Inc.*

4.68% due Mar. 12, 2039 410,083 415,208487,000 Merrill Lynch Financial Assets Inc.*

5.26% due May 12, 2044 486,983 477,199788,000 Real Estate Asset Liquidity Trust

5.20% due Mar. 12, 2046 702,460 777,834901,000 Schooner Trust*

3.97% due Sep. 12, 2020 701,367 893,078261,381 Solar Trust*

6.70% due Nov. 15, 2021 279,568 268,371

4,284,264 5,636,623

Corporate Bonds – 13.3%754,000 AltaLink LP*

5.02% due Nov. 21, 2012 754,662 782,867291,294 Arrow Lakes Power Corporation*

5.39% due Mar. 31, 2015 296,351 323,741159,000 Bank of Montreal Capital Trust II (callable)

10.22% due Dec. 31, 2107-(2018) 164,963 213,030269,000 Bell Aliant Regional Communications, Limited Partnership

6.17% due Feb. 26, 2037 221,348 237,336130,000 Bell Canada

7.85% due Apr. 2, 2031 121,043 144,67890,000 Bell Canada

7.30% due Feb. 23, 2032 80,253 94,808100,000 Bell Canada*

6.55% due May 1, 2029 83,350 97,885275,810 Brilliant Power Funding Corporation*

8.93% due May 31, 2026 357,898 342,722


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612,000 Brookfield Asset Management Inc.8.95% due Jun. 2, 2014 685,241 693,602

1,101,000 Brookfield Asset Management Inc.*5.29% due Apr. 25, 2017 964,143 1,008,575

802,000 Brookfield Asset Management Inc.*5.95% due Jun. 14, 2035 717,039 601,535

785,000 Brookfield Power Corporation*5.25% due Nov. 5, 2018 719,690 718,451

560,000 Brookfield Power Corporation*5.84% due Nov. 5, 2036 541,310 434,709

145,000 Brookfield Renewable Power Inc.6.13% due Nov. 30, 2016 145,000 148,323

770,000 Brookfield Renewable Power Inc.*8.75% due Feb. 3, 2012 787,158 840,777



1,378,000 Canadian Imperial Bank of Commerce (callable)5.15% due Jun. 6, 2023-(2018) 1,362,173 1,471,604

314,000 Canadian Pacific Railway Company6.45% due Nov. 17, 2039 317,202 312,820

340,000 Canadian Tire Corporation, Limited6.32% due Feb. 24, 2034 364,589 329,475

655,000 Canadian Tire Corporation, Limited5.61% due Sep. 4, 2035 581,595 575,703

584,000 CHIP Mortgage Trust*5.61% due May 2, 2011 584,000 611,261


181,000 Citigroup Inc.* (callable)4.65% due Oct. 11, 2022-(2017) 161,242 152,798

120,471 Data Centres Trust Series A*7.23% due Sep. 10, 2014 132,860 124,975

820,000 DundeeWealth Inc.5.10% due Sep. 25, 2014 819,967 819,269

830,000 ERAC Canada Finance Ltd.*5.38% due Feb. 26, 2016 803,601 793,967


102,000 GE Capital Canada Funding Company4.55% due Jan. 17, 2017 86,914 100,505

2,598,000 GE Capital Canada Funding Company5.53% due Aug. 17, 2017 2,523,991 2,684,276

1,054,000 GE Capital Canada Funding Company5.73% due Oct. 22, 2037 1,020,124 949,832

554,000 General Electric Capital Corporation (callable)6.38% due Nov. 15, 2067-(2017) 447,786 506,830

580,000 Golden Credit Card Trust5.42% due Apr. 15, 2013 580,000 624,761

1,244,000 Goldman Sachs Group, Inc., The5.25% due Jun. 1, 2016 1,277,675 1,260,405

419,000 Goldman Sachs Group Inc., The5.20% due Apr. 19, 2017 395,087 410,848



AverageCost ($)

FairValue ($)


567,000 Greater Toronto Airports Authority5.96% due Nov. 20, 2019 577,583 617,515

768,000 Greater Toronto Airports Authority7.05% due Jun. 12, 2030 796,394 881,545


206,000 Greater Toronto Airports Authority6.98% due Oct. 15, 2032 237,094 236,424

725,000 Greater Toronto Airports Authority6.47% due Feb. 2, 2034 778,831 787,538

611,000 HSBC Bank of Canada (callable)4.80% due Apr. 10, 2022-(2017) 599,554 605,508

1,792,000 HSBC Bank of Canada*4.94% due Mar. 16, 2021 1,716,296 1,821,422

138,000 Hydro One Inc.7.35% due Jun. 3, 2030 171,996 167,793

218,000 Hydro One Inc.5.49% due Jul. 16, 2040 216,428 215,919

540,000 Intact Financial Corporation5.41% due Sep. 3, 2019 538,450 541,280

173,000 Loblaw Companies Limited6.65% due Nov. 8, 2027 175,223 170,436

169,000 Loblaw Companies Limited6.50% due Jan. 22, 2029 168,174 162,315

125,000 Loblaw Companies Limited6.85% due Mar. 1, 2032 138,725 126,632

520,000 Manulife Financial (Delaware) LP (callable)4.45% due Dec. 15, 2026-(2016) 466,526 511,850



1,823,000 Manulife Financial Corporation7.77% due Apr. 8, 2019 1,870,082 2,164,796

754,000 Master Credit Card Trust5.30% due Aug. 21, 2012 758,707 807,499

580,000 Master Credit Card Trust5.24% due May 21, 2013 580,000 622,782

1,103,000 Merrill Lynch & Co. Inc.5.45% due Jul. 15, 2014 1,062,526 1,169,216

685,000 Merrill Lynch & Co. Inc.* (callable)5.29% due May 30, 2022-(2017) 651,249 646,850

350,000 Merrill Lynch Canada Finance Company*5.80% due May 5, 2011 349,951 363,737

270,000 Merrill Lynch Canada Finance Company*5.00% due Feb. 18, 2014 260,002 275,254

815,000 Morgan Stanley4.75% due Apr. 1, 2014 865,767 853,330


364,490 Pearson International Fuel Facilities Corporation*5.09% due Mar. 9, 2032 363,889 328,560

1,948,000 Reliance LP*7.30% due Apr. 3, 2013 1,943,636 1,971,438

567,000 RioCan Real Estate Investment Trust*5.70% due Sep. 11, 2012 567,111 589,668


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310,000 RioCan Real Estate Investment Trust*5.23% due Mar. 11, 2013 305,710 313,665

580,000 Rogers Communications Inc.5.80% due May 26, 2016 578,649 619,482

1,600,000 Royal Bank of Canada0.44% due Sep. 16, 2010 1,605,981 1,687,360

386,000 Royal Bank of Canada5.20% due Aug. 15, 2012 393,755 413,860

700,000 Royal Bank of Canada4.84% due Mar. 11, 2018 730,240 741,396

434,000 Royal Bank of Scotland PLC, The*5.37% due May 12, 2016 434,302 253,221

668,000 SNC-Lavalin Group Inc.*6.19% due Jul. 3, 2019 677,505 706,132

490,000 Sun Life Capital Trust II5.86% due Dec. 31, 2019 490,000 492,492

879,000 Sun Life Financial Inc. (callable)7.90% due Mar. 31, 2019-(2014) 923,445 1,010,049

534,000 Sun Life Financial Inc.5.70% due Jul. 2, 2019 533,637 556,150

372,000 Sun Life Financial Inc. (callable)4.80% due Nov. 23, 2035-(2015) 349,141 380,336


612,000 Sun Life Financial Inc. (callable)5.40% due May 29, 2042-(2037) 533,739 526,204


503,000 TCNZ Finance Ltd.*4.75% due Oct. 11, 2013 502,269 485,082

440,000 TD Capital Trust (callable)6.63% due Jun. 30, 2108-(2021) 440,000 476,843


1,000,000 TD Capital Trust IV (callable)9.52% due Jun. 30, 2108-(2019) 1,197,800 1,302,515

334,000 Terasen Gas Inc.6.50% due May 1, 2034 383,723 375,150

284,000 Terasen Gas Inc.5.55% due Sep. 25, 2036 283,957 281,053

360,000 Terasen Gas Inc.6.00% due Oct. 2, 2037 364,143 380,137


AverageCost ($)

FairValue ($)


167,000 Terasen Gas Inc.6.05% due Feb. 15, 2038 166,885 172,345

113,000 Toronto Community Housing Corporation Issuer Trust4.88% due May 11, 2037 113,000 104,883


299,000 TransCanada PipeLines Limited8.05% due Feb. 17, 2039 383,438 391,477

57,440,097 59,312,344


MONEY MARKET INSTRUMENTS – 4.1%300,000 Government of Canada Treasury Bills

0.22% to 0.25% due Feb. 4, 2010 299,785 299,934300,000 Province of Ontario Treasury Bills

0.22% to 0.25% due fromFeb. 3, 2010 to Mar. 24, 2010 299,826 299,905

150,000 Province of Quebec Treasury Bills0.19% due Feb. 5, 2010 149,972 149,973

4,400,000 Bank of Montreal Bankers’ Acceptances0.27% to 0.29% due fromJan. 22, 2010 to Mar. 16, 2010 4,398,543 4,398,957

4,600,000 Canadian Imperial Bank of Commerce Bankers’ Acceptances0.28% to 0.45% due fromJan. 27, 2010 to Apr. 21, 2010 4,594,224 4,596,425

6,000,000 National Bank of Canada Bankers’ Acceptances0.28% to 0.29% due fromFeb. 26, 2010 to Mar. 17, 2010 5,995,823 5,997,140

1,350,000 Royal Bank of Canada Bankers’ Acceptances0.24% due Jan. 27, 2010 1,349,690 1,349,769

1,450,000 Bank of Montreal Bearers’ Deposit Notes0.30% due Mar. 5, 2010 1,448,913 1,449,247

18,536,776 18,541,350


Currency Forward Contracts – (0.1%) (283,579)Future Contracts – 0.1% 250,092OTHER ASSETS, LESS LIABILITIES – 0.2% 885,964

NET ASSETS – 100.0% 447,302,179



Number of Contracts Contract IssuerContractual



(Depreciation) ($)

7 U.K. 10 Year Long Gilt Futures – Mar. 2010 1,390,426 1,359,540 (30,886)14 AUST 10 Year Bond Futures – Mar. 2010 1,247,106 1,244,597 (2,509)

(18) U.S. 5 Year Note Futures – Mar. 2010 (2,194,539) (2,162,360) 32,179(4) U.S. 10 Year Note Futures – Mar. 2010 (496,172) (485,021) 11,15111 Canadian 10 Year Bond Futures – Mar. 2010 1,318,680 1,296,240 (22,440)

(12,505)


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C U R R E N C Y F U T U R E S C O N T R A C T S

Number of Contracts Settlement DateContractual



Depreciation ($)

60 Australian $ against U.S.$ Mar. 2010 5,637,142 5,619,073 (18,069)38 British Pound against U.S.$ Mar. 2010 4,054,967 4,027,385 (27,582)

(28) Japanese Yen against U.S.$ Mar. 2010 (4,167,095) (3,947,907) 219,188(3) Swiss Franc against U.S.$ Mar. 2010 (383,999) (380,809) 3,190

(37) Euro against U.S.$ Mar. 2010 (7,137,255) (6,962,637) 174,6186 Canadian $ against U.S.$ Mar. 2010 598,519 602,552 4,033

TOTAL 355,378

The above futures contracts are financial agreements to purchase/sell the bond/currency at a contracted price on a specific future date. However, the Fund does not intend to purchase/sell thebond/currency on settlement. Rather, it intends to close out each future contract before settlement by entering into equal, but offsetting future contracts.

With respect to the above futures contracts, $200,000 of the February 4, 2010 Government of Canada Treasury Bills is held on margin.

The futures contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of AA- by Standard & Poor’s.





December 31, 2009 ($)


(Depreciation)Mar. 17, 2010 Australian Dollar 6,415,181 U.S. Dollar 5,767,119 6,111,139 (59,481)Mar. 17, 2010 Australian Dollar 300,841 U.S. Dollar 270,441 286,573 (2,780)Mar. 17, 2010 Australian Dollar 105,879 U.S. Dollar 93,888 99,489 390Mar. 17, 2010 Australian Dollar 26,988 U.S. Dollar 24,462 25,921 (463)Mar. 17, 2010 British Pound 2,706,083 U.S. Dollar 4,408,750 4,633,911 (41,726)Mar. 17, 2010 British Pound 138,730 U.S. Dollar 225,346 236,855 (1,432)Mar. 17, 2010 British Pound 137,801 U.S. Dollar 220,551 231,814 2,032Mar. 17, 2010 British Pound 9,025 U.S. Dollar 14,892 15,653 (338)Mar. 17, 2010 Canadian Dollar 31,251 U.S. Dollar 29,741 31,255 (4)Mar. 19, 2010 Canadian Dollar 4,409,574 U.S. Dollar 4,155,663 4,367,302 42,272Mar. 19, 2010 Canadian Dollar 2,920,253 U.S. Dollar 2,752,100 2,892,259 27,994Mar. 19, 2010 Canadian Dollar 71,329 U.S. Dollar 67,600 71,043 287Mar. 19, 2010 Canadian Dollar 67,003 U.S. Dollar 63,500 66,734 269Mar. 17, 2010 Danish Krone 1,623,833 U.S. Dollar 321,098 337,526 (9,458)Mar. 17, 2010 Danish Krone 24,662 U.S. Dollar 4,926 5,178 (196)Mar. 17, 2010 European Euro 7,624,537 U.S. Dollar 11,232,202 11,797,218 (333,816)Mar. 17, 2010 European Euro 2,747,938 U.S. Dollar 4,047,933 4,251,557 (120,065)Mar. 17, 2010 European Euro 111,048 U.S. Dollar 164,711 172,996 (6,037)Mar. 17, 2010 European Euro 29,826 U.S. Dollar 44,390 46,623 (1,780)Mar. 17, 2010 European Euro 17,147 U.S. Dollar 24,597 25,834 (54)Mar. 17, 2010 Hong Kong Dollar 1,318,018 U.S. Dollar 170,049 178,498 29Mar. 17, 2010 Hong Kong Dollar 1,007,565 U.S. Dollar 130,097 136,561 (85)Mar. 17, 2010 Japanese Yen 127,373,189 U.S. Dollar 1,441,203 1,512,538 (75,502)Mar. 17, 2010 Japanese Yen 103,423,606 U.S. Dollar 1,170,473 1,228,408 (61,574)Mar. 17, 2010 Japanese Yen 51,499,875 U.S. Dollar 571,554 599,844 (18,818)Mar. 17, 2010 Japanese Yen 44,918,552 U.S. Dollar 508,358 533,521 (26,745)Mar. 17, 2010 Japanese Yen 23,366,375 U.S. Dollar 259,921 272,786 (9,165)Mar. 17, 2010 Japanese Yen 18,026,675 U.S. Dollar 204,231 214,340 (10,961)Mar. 17, 2010 Japanese Yen 1,378,425 U.S. Dollar 14,878 15,615 (63)Mar. 17, 2010 New Zealand Dollar 95,018 U.S. Dollar 67,037 70,872 1,587Mar. 17, 2010 New Zealand Dollar 23,600 U.S. Dollar 16,648 17,601 396Mar. 17, 2010 Norwegian Krone 2,880,530 U.S. Dollar 497,102 523,697 (1,769)Mar. 17, 2010 Norwegian Krone 57,409 U.S. Dollar 9,756 10,278 124Mar. 17, 2010 Norwegian Krone 56,166 U.S. Dollar 9,870 10,399 (222)Mar. 17, 2010 Norwegian Krone 28,903 U.S. Dollar 4,959 5,224 13Mar. 17, 2010 Norwegian Krone 28,798 U.S. Dollar 4,980 5,246 (28)Mar. 17, 2010 Singapore Dollar 4,979,778 U.S. Dollar 3,572,781 3,756,769 (34,600)Mar. 17, 2010 Singapore Dollar 327,684 U.S. Dollar 233,377 245,395 (465)Mar. 17, 2010 Swedish Krona 8,203,657 U.S. Dollar 1,151,668 1,209,145 (5,640)Mar. 17, 2010 Swedish Krona 1,527,113 U.S. Dollar 215,380 226,129 (2,096)Mar. 17, 2010 Swedish Krona 415,611 U.S. Dollar 59,712 62,692 (1,720)Mar. 17, 2010 Swiss Franc 3,675,759 U.S. Dollar 3,588,802 3,766,616 (38,514)Mar. 17, 2010 Swiss Franc 108,775 U.S. Dollar 103,948 109,099 1,225Mar. 17, 2010 Swiss Franc 39,946 U.S. Dollar 39,469 41,424 (910)Mar. 17, 2010 U.S. Dollar 3,030,123 Australian Dollar 3,372,124 3,152,815 29,586Mar. 17, 2010 U.S. Dollar 69,133 Australian Dollar 76,586 71,605 1,002Mar. 17, 2010 U.S. Dollar 49,978 Australian Dollar 55,063 51,482 1,008Mar. 17, 2010 U.S. Dollar 4,889 Australian Dollar 5,559 5,197 (63)Mar. 17, 2010 U.S. Dollar 5,603,895 British Pound 3,439,945 5,833,054 52,462Mar. 17, 2010 U.S. Dollar 540,692 British Pound 335,417 568,761 (896)Mar. 17, 2010 U.S. Dollar 44,850 British Pound 27,141 46,023 1,082Mar. 17, 2010 U.S. Dollar 27,113 Canadian Dollar 29,000 28,981 (505)Mar. 17, 2010 U.S. Dollar 5,014 Canadian Dollar 5,274 5,271 (4)Mar. 17, 2010 U.S. Dollar 4,958 Danish Krone 25,826 5,213 (5)Mar. 17, 2010 U.S. Dollar 10,823,294 European Euro 7,347,889 11,046,917 320,299Mar. 17, 2010 U.S. Dollar 588,768 European Euro 400,122 601,549 16,807Mar. 17, 2010 U.S. Dollar 282,873 European Euro 197,827 297,416 (327)Mar. 17, 2010 U.S. Dollar 3,458,035 Hong Kong Dollar 26,783,169 3,629,699 2,118Mar. 17, 2010 U.S. Dollar 155,095 Hong Kong Dollar 1,202,118 162,913 (24)Mar. 17, 2010 U.S. Dollar 85,066 Hong Kong Dollar 658,754 89,275 66Mar. 17, 2010 U.S. Dollar 50,038 Hong Kong Dollar 387,502 52,515 38Mar. 17, 2010 U.S. Dollar 39,909 Hong Kong Dollar 309,151 41,897 18Mar. 17, 2010 U.S. Dollar 34,950 Japanese Yen 3,107,825 35,069 1,637


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December 31, 2009 ($)


(Depreciation)Mar. 17, 2010 U.S. Dollar 49,392 New Zealand Dollar 68,738 52,074 (199)Mar. 17, 2010 U.S. Dollar 137,135 Norwegian Krone 794,460 143,562 465Mar. 17, 2010 U.S. Dollar 39,703 Norwegian Krone 226,290 40,891 807Mar. 17, 2010 U.S. Dollar 4,988,210 Singapore Dollar 6,955,759 5,193,010 45,881Mar. 17, 2010 U.S. Dollar 119,921 Singapore Dollar 166,734 124,480 1,467Mar. 17, 2010 U.S. Dollar 60,042 Singapore Dollar 83,421 62,280 779Mar. 17, 2010 U.S. Dollar 49,899 Singapore Dollar 70,157 52,378 29Mar. 17, 2010 U.S. Dollar 49,700 Singapore Dollar 69,037 51,541 656Mar. 17, 2010 U.S. Dollar 6,598,947 Swedish Krona 47,019,477 6,900,254 30,321Mar. 17, 2010 U.S. Dollar 424,947 Swedish Krona 3,047,548 447,237 (935)Mar. 17, 2010 U.S. Dollar 191,372 Swedish Krona 1,395,478 204,791 (3,801)Mar. 17, 2010 U.S. Dollar 142,705 Swedish Krona 1,016,671 149,200 677Mar. 17, 2010 U.S. Dollar 73,926 Swedish Krona 513,660 75,381 2,260Mar. 17, 2010 U.S. Dollar 259,537 Swiss Franc 265,782 269,749 2,830Mar. 17, 2010 U.S. Dollar 39,974 Swiss Franc 40,734 41,342 641Mar. 17, 2010 U.S. Dollar 24,974 Swiss Franc 25,623 26,005 223Mar. 17, 2010 U.S. Dollar 14,879 Swiss Franc 15,485 15,716 (90)

(283,579)





Canadian Equities 51.6 39.4Foreign Equities 21.6 25.9Bonds and Debentures 22.5 27.0Money Market Instruments 4.1 6.9Currency Forward Contracts (0.1) 0.2Futures Contracts 0.1 (0.2)




(Level 2) ($)



Equities 281,481,327 45,725,126 – 327,206,453Bonds and Debentures – 100,701,899 – 100,701,899Money Market Instruments – 18,541,350 – 18,541,350Futures Contracts (Long) (97,453) – – (97,453)




(Level 2) ($)



Currency Forward Contracts – 283,579 – 283,579Futures Contracts (Short) (440,326) – – (440,326)

Total Investments (440,326) 283,579 – (156,747)



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A. Risk managementThe investment objective of the Scotia Canadian Tactical Asset Allocation Fund(the “Fund”) is to obtain capital growth over the long term, while providingmodest income. It invests primarily in a broad range of Canadian equity andfixed income securities. It may also invest in equity and fixed income securitiesfrom around the world. The Fund’s asset mix will generally vary within thefollowing ranges: 20-80% in equity and 20-80% in fixed income securities. TheFund may also invest a portion of its assets in money market instruments. Theportfolio advisor determines the asset mix based on its analysis of marketconditions and how it expects each asset class to perform. The Fund can investup to 49% of its assets in foreign securities anywhere in the world.




CurrencyFinancial




U.S. Dollar 50,786,071 (10,884,034) 39,902,037 8.9European Euro 19,187,366 4,348,346 23,535,712 5.3Japanese Yen 9,408,932 4,341,983 13,750,915 3.1British Pound 8,828,997 (1,329,605) 7,499,392 1.7Swiss Franc 387,932 3,564,327 3,952,259 0.9Turkish Lira 2,026,498 – 2,026,498 0.4Swedish Krona 7,375,029 (6,278,897) 1,096,132 0.2Hong Kong Dollar 4,755,891 (3,661,240) 1,094,651 0.2Singapore Dollar 2,251,189 (1,481,525) 769,664 0.2Norwegian Krone 3,272 370,390 373,662 0.1Danish Krone 28,174 337,491 365,665 0.1Thai Baht 184,151 – 184,151 0.0Brazilian Real 62,387 – 62,387 0.0New Zealand Dollar 9,163 36,399 45,562 0.0South African Rand 40,917 – 40,917 0.0Israel Shekel 761 – 761 0.0Australian Dollar (4,427,638) 3,242,023 (1,185,615) (0.3)

Total 100,909,092 (7,394,342) 93,514,750 20.8

December 31, 2008

CurrencyFinancial




U.S. Dollar 55,626,985 (7,107,215) 48,519,770 13.5European Euro 10,726,297 5,601,003 16,327,300 4.5British Pound 13,753,442 (4,733,730) 9,019,712 2.5Japanese Yen 10,539,978 (1,669,873) 8,870,105 2.5Swiss Franc 161,172 2,842,436 3,003,608 0.8Australian Dollar 298,765 1,165,736 1,464,501 0.4Hong Kong Dollar 2,088,187 (1,157,619) 930,568 0.3Swedish Krona 1,495,922 (698,888) 797,034 0.2Singapore Dollar 479,449 (71,655) 407,794 0.1Danish Krone 951 372,713 373,664 0.1Norwegian Krone 820,443 (506,589) 313,854 0.1Brazilian Real 284,531 – 284,531 0.1Israel Shekel 207,024 – 207,024 0.1Pakistani Rupee 198,816 – 198,816 0.1

Total 96,681,962 (5,963,681) 90,718,281 25.3








Less than 1 year 2,859,517 738,9411-3 years 4,409,668 2,261,1873-5 years 16,428,325 24,694,7325-10 years 46,007,903 39,183,915H 10 years 30,996,486 30,107,807

Total 100,701,899 96,986,582



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E. Credit riskCredit risk is the risk that the counterparty of a financial instrument will fail todischarge an obligation or commitment that it has entered into with the Fund.All transactions in listed securities are settled (paid for) upon delivery usingapproved brokers. The risk of default is considered minimal, as delivery ofsecurities sold is only made once the broker has received payment. Payment ismade on a purchase once the securities have been received by the broker.










AAA 22.8 5.2 19.7 5.3AA 33.0 7.4 39.5 10.7A 34.8 7.8 29.4 7.9BBB 9.0 2.0 10.5 2.8BB 0.2 0.1 0.5 0.1B – – 0.3 0.1Unrated 0.2 – 0.1 0.1

Total 100.0 22.5 100.0 27.0


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark stock indices of, 40% S&P/TSX CompositeIndex, 40% DEX Universe Bond Index and 20% Morgan Stanley CapitalInternational World Index, as of December 31, 2009, with all other variablesheld constant, would result in an increase or decrease of approximately$101,984,897, 22.8% of the Fund’s Net Assets (December 31, 2008-$39,075,406,10.9% of the Fund’s Net Assets). The Fund’s historical sensitivity measure maynot be representative of its future sensitivity measure, and accordingly, theimpact on Net Assets could be materially different.


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Scotia Canadian Dividend FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $3,030,258,370 $2,172,357,711Cash 519,026 113,341Accrued investment income 7,785,872 5,513,180Receivable for securities sold 374,537 –Subscriptions receivable 2,224,989 814,859Receivable for currency forward contracts 2,849,889 –

3,044,012,683 2,178,799,091

LIABILITIESDistributions payable 585 1,912Redemptions payable 757,747 5,505,142Accrued expenses 1,540,864 2,398,042Payable for currency forward contracts – 685,208

2,299,196 8,590,304

Net Assets $3,041,713,487 $2,170,208,787

NET ASSETS PER CLASSClass A Units $2,147,769,215 $1,615,129,535Advisor Class Units $ 23,462,722 $ 10,238,816Class F Units $ 8,357,222 $ 5,786,295Class I Units $ 744,943,742 $ 472,825,795Manager Class Units* $ 117,180,586 $ 66,228,346

UNITS OUTSTANDINGClass A Units 59,980,316 56,263,814Advisor Class Units 658,809 358,412Class F Units 234,500 202,077Class I Units 20,859,855 16,438,169Manager Class Units* 3,302,668 2,318,185

NET ASSETS PER UNITClass A Units $ 35.81 $ 28.71Advisor Class Units $ 35.61 $ 28.57Class F Units $ 35.64 $ 28.63Class I Units $ 35.71 $ 28.76Manager Class Units* $ 35.48 $ 28.57


2009 2008INVESTMENT INCOMEDividends $ 83,001,941 $ 63,325,243Interest 7,512,384 13,350,781Capital gains distributions received 121,277 42,787Securities lending 452,089 1,454,702Foreign withholding taxes/Tax reclaims (889,176) (959,280)

90,198,515 77,214,233



30,864,657 33,744,533


Net realized gain (loss) on investments sold (38,385,525) (47,958,446)Net realized gain (loss) on currency forwards 11,815,921 (16,971,369)Net realized gain (loss) on foreign exchange (538,620) (1,327,521)Transaction costs (3,398,475) (3,540,065)Change in unrealized appreciation (depreciation) of investments 570,483,215 (821,682,297)Change in unrealized appreciation (depreciation) of currency forwards 3,535,097 (685,208)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $437,163,229 $(628,786,816)Advisor Class Units $ 4,132,687 $ (3,292,904)Class F Units $ 1,618,674 $ (2,351,246)Class I Units $140,361,617 $(191,538,571)Manager Class Units* $ 19,569,264 $ (22,725,669)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 7.50 $ (11.39)Advisor Class Units $ 7.91 $ (15.36)Class F Units $ 7.56 $ (11.51)Class I Units $ 7.78 $ (15.22)Manager Class Units* $ 7.62 $ (9.49)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $1,615,129,535 $2,107,624,598Advisor Class Units 10,238,816 –Class F Units 5,786,295 8,222,497Class I Units 472,825,795 314,275,016Manager Class Units* 66,228,346 95,691,427

2,170,208,787 2,525,813,538

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 437,163,229 (628,786,816)Advisor Class Units 4,132,687 (3,292,904)Class F Units 1,618,674 (2,351,246)Class I Units 140,361,617 (191,538,571)Manager Class Units* 19,569,264 (22,725,669)

602,845,471 (848,695,206)


Class A Units (19,617,665) (17,041,253)Advisor Class Units (147,324) (93,271)Class F Units (123,937) (120,114)Class I Units (15,695,556) (12,809,977)Manager Class Units* (2,099,124) (2,021,167)

(37,683,606) (32,085,782)


Class A Units 281,180,899 410,188,447Advisor Class Units 11,017,035 14,245,431Class F Units 2,007,171 3,020,477Class I Units 199,154,122 498,388,214Manager Class Units* 57,718,622 58,372,902

Reinvested distributionsClass A Units 19,236,409 16,695,903Advisor Class Units 134,900 88,675Class F Units 113,802 112,291Class I Units 15,505,158 11,703,094Manager Class Units* 1,339,359 1,620,389

Payments on redemptionClass A Units (185,323,192) (273,551,344)Advisor Class Units (1,913,392) (709,115)Class F Units (1,044,783) (3,097,610)Class I Units (67,207,394) (147,191,981)Manager Class Units* (25,575,881) (64,709,536)

306,342,835 525,176,237

INCREASE (DECREASE) IN NET ASSETSClass A Units 532,639,680 (492,495,063)Advisor Class Units 13,223,906 10,238,816Class F Units 2,570,927 (2,436,202)Class I Units 272,117,947 158,550,779Manager Class Units* 50,952,240 (29,463,081)

871,504,700 (355,604,751)

NET ASSETS – END OF PERIODClass A Units 2,147,769,215 1,615,129,535Advisor Class Units 23,462,722 10,238,816Class F Units 8,357,222 5,786,295Class I Units 744,943,742 472,825,795Manager Class Units* 117,180,586 66,228,346

$3,041,713,487 $2,170,208,787



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Scotia Canadian Dividend Fund (Continued)



AverageCost ($)

FairValue ($)


1,000,052 AltaGas Income Trust 21,901,897 18,770,976700,000 ARC Energy Trust 12,760,148 13,958,000

1,379,750 Bonavista Energy Trust 35,873,075 30,727,0331,000,000 Canadian Natural Resources Limited 51,867,617 75,670,0001,075,000 Canadian Oil Sands Trust 27,005,096 32,013,5001,402,000 Cenovus Energy Inc. 33,512,681 37,110,9401,725,000 EnCana Corporation 46,900,167 58,736,2501,548,900 Enbridge Inc. 56,705,467 75,199,095

500,000 Husky Energy Inc. 14,401,340 15,010,000790,000 Imperial Oil Ltd. 21,342,280 32,081,900

1,000,000 Mullen Group Ltd. 15,659,673 16,260,000400,000 PetroBakken Energy Ltd. 13,300,000 12,924,000500,000 ShawCor Ltd. 14,200,386 14,640,000

1,650,000 Suncor Energy, Inc. 62,497,575 61,231,5001,400,000 Talisman Energy Inc. 26,328,763 27,370,0002,025,000 TransCanada Corporation 61,767,189 73,203,750

516,023,354 594,906,944

Materials – 6.3%250,000 Agnico-Eagle Mines Limited 11,826,170 14,197,500(2,500) Agnico-Eagle Mines Limited, Written Call Options $60.00 Jan. 15,

2010 (182,587) (78,769)225,000 Agrium Inc. 6,821,582 14,559,750

1,900,000 Barrick Gold Corporation 68,688,750 78,660,0001,172,500 Cameco Corporation 35,159,066 39,642,225

335,000 Potash Corporation of Saskatchewan Inc. 23,001,603 38,226,8501,000,000 Sherritt International Corporation 6,800,000 6,530,000

152,114,584 191,737,556

Industrials – 8.0%2,000,000 Bombardier Inc., Class B 9,814,048 9,580,0001,300,000 Brookfield Infrastructure Partners LP 20,215,000 22,620,0001,325,000 Canadian National Railway Company 52,057,060 75,723,749

485,000 Canadian Pacific Railway Limited 24,144,032 27,499,5002,300,000 Finning International Inc. 49,116,487 38,157,000

400,000 Ritchie Bros. Auctioneers Incorporated 9,098,454 9,432,000340,000 SNC-Lavalin Group Inc. 10,935,047 18,332,800321,230 Student Transportation of America Ltd. 2,268,529 1,519,417

1,447,900 Toromont Industries Ltd. 37,315,048 40,164,746

214,963,705 243,029,212

Consumer Discretionary – 5.7%500,000 Loblaw Companies Limited 15,565,400 16,910,000

1,200,000 Shaw Communications, Inc., Class B 24,300,631 25,920,0001,150,000 Shoppers Drug Mart Corporation 50,756,084 52,198,5001,400,000 Thomson Reuters Corporation 50,924,581 47,460,000

995,000 Tim Hortons, Inc. 30,472,128 31,909,650

172,018,824 174,398,150

Consumer Staples – 1.5%1,475,000 Saputo Inc. 34,334,589 45,356,250

Financials – 39.2%1,600,000 Bank of Montreal 64,570,380 89,264,0003,350,000 Bank of Nova Scotia, The 154,420,467 164,786,499

300,000 Bank of Nova Scotia, The 6.25%, Preferred, Series 28 7,500,000 8,391,0001,964,000 Brookfield Asset Management Inc. 37,594,038 45,839,7601,150,000 Canadian Imperial Bank of Commerce 68,093,724 78,142,500

157,100 Canadian Western Bank 7.25%, Preferred, Series 3 3,927,500 4,191,428


AverageCost ($)

FairValue ($)


925,000 Cominar Real Estate Investment Trust 17,506,124 17,834,000580,000 First Capital Realty Inc. 11,032,560 12,475,80070,350 First Capital Realty Inc. Warrants $17.53 Oct. 29, 2010* – 258,88847,500 Gazit America Inc. 213,750 232,275

692,413 Genworth MI Canada Inc. 13,334,312 18,660,5302,100,000 Great-West Lifeco Inc. 49,105,391 56,322,000

950,000 Intact Financial Corporation 25,745,000 35,036,0004,145,000 Manulife Financial Corporation 99,702,780 79,998,500

300,000 Manulife Financial Corporation 6.60%, Preferred, Series 4 7,500,000 8,415,0003,475,000 Power Corporation of Canada 87,504,095 101,192,0004,025,000 Royal Bank of Canada 154,494,197 226,849,000

300,000 Royal Bank of Canada 6.25%, Preferred, Series AP 7,500,000 8,379,0001,700,000 Sun Life Financial Inc. 63,490,877 51,289,0002,795,000 Toronto-Dominion Bank, The 143,357,651 184,302,300

1,016,592,846 1,191,859,480

Telecommunication Services – 4.0%975,000 BCE Inc. 32,141,676 28,226,250100,000 BCE Inc. 4.50%, Preferred, Series T 1,735,000 1,819,000100,000 BCE Inc. 6.17%, Preferred, Series R 1,726,000 1,841,000400,000 Manitoba Telecom Services Inc. 12,803,847 13,364,000

1,400,000 Rogers Communications, Inc., Class B 45,329,642 45,584,000950,000 TELUS Corporation Non-Voting 34,426,544 31,017,500

128,162,709 121,851,750

Utilities – 2.4%700,000 Capital Power Corporation 16,017,510 14,959,000618,500 Emera Inc. 12,242,517 15,505,795

1,000,000 Fortis, Inc. 20,411,058 28,680,000600,000 TransAlta Corporation 16,561,383 14,070,000

65,232,468 73,214,795

TOTAL CANADIAN EQUITIES 2,299,443,079 2,636,354,137

FOREIGN EQUITIES – 8.9%United Kingdom – 0.5%

75,000 Rio Tinto PLC ADR 12,592,920 16,966,077

United States – 8.4%1,000,000 Advance Auto Parts, Inc 41,948,191 42,514,310

375,000 Analog Devices, Inc. 10,643,872 12,425,826875,000 Applied Materials, Inc. 12,704,987 12,736,964225,000 Becton, Dickinson and Company 18,240,742 18,635,194300,000 Ecolab Inc. 12,837,586 14,046,106500,000 Family Dollar Stores, Inc. 15,013,397 14,609,043700,000 Intel Corporation 12,737,937 14,997,637400,000 J.C. Penney Company, Inc. 14,628,152 11,166,308400,000 Kraft Foods Inc. 12,264,002 11,414,168

1,000,000 Lowe’s Companies, Inc. 24,603,887 24,554,955250,000 PepsiCo, Inc. 16,699,620 15,955,994150,000 Praxair, Inc. 6,879,740 12,651,893650,000 Republic Services, Inc. 20,300,773 19,312,608725,000 Textron Inc. 15,051,349 14,299,743275,000 Wal-Mart Stores, Inc. 16,544,753 15,431,655

251,098,988 254,752,404


TOTAL EQUITIES 2,563,134,987 2,908,072,618

S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9E

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AverageCost ($)

FairValue ($)


0.10% to 0.23% due fromJan. 7, 2010 to Apr. 1, 2010 122,163,507 122,185,752


Currency Forward Contracts – 0.1% 2,849,889OTHER ASSETS, LESS LIABILITIES – 0.3% 8,605,228

NET ASSETS – 100.0% 3,041,713,487






December 31, 2009 ($)


(Depreciation)

Jan. 6, 2010 Canadian Dollar 136,131,000 U.S. Dollar 128,028,704 134,479,694 1,651,306Jan. 6, 2010 Canadian Dollar 99,570,350 U.S. Dollar 93,669,191 98,388,907 1,181,443Jan. 6, 2010 U.S. Dollar 2,491,615 Canadian Dollar 2,600,000 2,599,690 17,140

2,849,889





Canadian EquitiesEnergy 19.6 13.1Materials 6.3 7.1Industrials 8.0 7.5Consumer Discretionary 5.7 8.2Consumer Staples 1.5 4.2Financials 39.2 33.3Telecommunication Services 4.0 4.0Utilities 2.4 9.3

Foreign Equities 8.9 6.6Money Market Instruments 4.0 6.8Currency Forward Contracts 0.1 –




(Level 2) ($)



Equities 2,907,892,499 – – 2,907,892,499Warrants – 258,888 – 258,888Money Market Instruments – 122,185,752 – 122,185,752Currency Forward Contracts – 2,849,889 – 2,849,889

Total Investments 2,907,892,499 125,294,529 – 3,033,187,028



(Level 2) ($)






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A. Risk managementThe investment objective of the Scotia Canadian Dividend Fund (the “Fund”) isto earn a high level of dividend income with some potential for long-termcapital growth. It invests primarily in dividend-paying common shares and in abroad range of preferred shares, such as floating rate, convertible andretractable preferred shares of Canadian companies.


B. Liquidity riskThe Fund’s exposure to liquidity risk is concentrated in the daily cashredemption of units. The Fund primarily invests in securities that are traded inactive markets and can be readily disposed. In addition, the Fund aims to retainsufficient cash and cash equivalent positions to maintain liquidity, and has theability to borrow up to 5% of its Net Asset Value for the purpose of fundingredemptions. The Fund may, from time to time, enter into over-the-counterderivative contracts or invest in securities that are not traded in an activemarket and may be illiquid. Illiquid securities are identified in the Statement ofInvestment Portfolio.


CurrencyFinancial




U.S. Dollar 272,076,579 (230,268,911) 41,807,668 1.4

Total 272,076,579 (230,268,911) 41,807,668 1.4

December 31, 2008

CurrencyFinancial




U.S. Dollar 143,145,106 (57,753,863) 85,391,243 3.9

Total 143,145,106 (57,753,863) 85,391,243 3.9



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009 and December 31, 2008, themajority of the Fund’s financial assets and liabilities are non-interest bearing,accordingly, the Fund is not subject to material amounts of risk due tofluctuations in the prevailing levels of interest rates.











AAA 76.2 0.8 100.0 0.8AA 11.1 0.1 – –Unrated 12.7 0.2 – –

Total 100.0 1.1 100.0 0.8


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, the S&P/TSX Composite Index, as ofDecember 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $468,423,877, 15.4% of the Fund’s NetAssets (December 31, 2008-$145,827,420, 6.7% of the Fund’s Net Assets). TheFund’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia Canadian Blue Chip FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $324,555,549 $274,703,204Cash 96,742 139,599Accrued investment income 727,113 610,044Subscriptions receivable 97,627 91,288

325,477,031 275,544,135

LIABILITIESRedemptions payable 249,994 94,479Accrued expenses 283,140 476,004

533,134 570,483

Net Assets $324,943,897 $274,973,652

NET ASSETS PER CLASSClass A Units $313,467,020 $263,824,767Class F Units $ 253 $ 6,022Class I Units $ 11,476,624 $ 11,142,863

UNITS OUTSTANDINGClass A Units 12,767,681 13,323,431Class F Units 10 298Class I Units 429,116 523,899



2009 2008INVESTMENT INCOMEDividends $ 7,877,207 $ 7,514,736Interest 372,756 2,904,879Capital gains distributions received – 1,655Securities lending 36,320 183,421Foreign withholding taxes/Tax reclaims (34,708) 25,895

8,251,575 10,630,586



6,025,157 7,504,971


Net realized gain (loss) on investments sold 1,010,680 2,558,842Net realized gain (loss) on foreign exchange 37,878 (31,612)Transaction costs (655,987) (409,702)Change in unrealized appreciation (depreciation) of investments 62,206,675 (129,865,075)Change in unrealized appreciation (depreciation) of currency forwards – (15,787)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $61,991,183 $(120,208,165)Class F Units $ 280 $ (9,894)Class I Units $ 2,834,201 $ (4,419,660)


Class A Units $ 4.74 $ (8.82)Class F Units $ 1.46 $ (9.80)Class I Units $ 5.93 $ (8.40)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $263,824,767 $ 405,993,455Class F Units 6,022 30,186Class I Units 11,142,863 23,149,871

274,973,652 429,173,512

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 61,991,183 (120,208,165)Class F Units 280 (9,894)Class I Units 2,834,201 (4,419,660)

64,825,664 (124,637,719)

DISTRIBUTIONS TO UNITHOLDERSFrom realized gain

Class A Units – (1,487,433)Class F Units – (34)Class I Units – (62,903)

– (1,550,370)


Class A Units 12,429,922 16,932,173Class F Units 250 –Class I Units 1,628,099 2,854,281

Reinvested distributionsClass A Units – 1,482,209Class F Units – 34Class I Units – 62,903

Payments on redemptionClass A Units (24,778,852) (38,887,472)Class F Units (6,299) (14,270)Class I Units (4,128,539) (10,441,629)

(14,855,419) (28,011,771)

INCREASE (DECREASE) IN NET ASSETSClass A Units 49,642,253 (142,168,688)Class F Units (5,769) (24,164)Class I Units 333,761 (12,007,008)

49,970,245 (154,199,860)

NET ASSETS – END OF PERIODClass A Units 313,467,020 263,824,767Class F Units 253 6,022Class I Units 11,476,624 11,142,863

$324,943,897 $ 274,973,652


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AverageCost ($)

FairValue ($)


103,660 Bonavista Energy Trust 2,004,212 2,308,508149,284 Canadian Natural Resources Limited 6,546,446 11,296,320214,386 Canadian Oil Sands Trust 6,336,764 6,384,415176,423 Cenovus Energy Inc. 3,375,453 4,669,917107,440 Enbridge Inc. 3,731,088 5,216,212235,243 EnCana Corporation 5,091,691 8,010,024128,038 Husky Energy Inc. 3,339,402 3,843,70132,162 Imperial Oil Ltd. 1,048,576 1,306,099

135,112 Nexen Inc. 4,195,967 3,396,71669,561 Petrobank Energy and Resources Ltd. 3,328,405 3,549,698


63,279,406 82,349,759

Materials – 17.3%112,280 Agnico-Eagle Mines Limited 6,408,911 6,376,38144,740 Agrium Inc. 2,336,318 2,895,125

330,192 Barrick Gold Corporation 10,871,573 13,669,949115,359 Cameco Corporation 2,274,393 3,900,288191,960 Goldcorp, Inc. 6,219,802 7,929,86832,995 Inmet Mining Corporation 1,675,507 2,097,16297,294 Potash Corporation of Saskatchewan Inc. 7,037,778 11,102,218

225,673 Teck Resources Limited, Class B 4,875,838 8,282,199

41,700,120 56,253,190

Industrials – 6.7%522,025 Bombardier Inc., Class B 2,335,241 2,500,500178,120 Canadian National Railway Company 5,028,679 10,179,55879,564 Canadian Pacific Railway Limited 3,431,250 4,511,27986,470 SNC-Lavalin Group Inc. 3,070,444 4,662,462

13,865,614 21,853,799

Consumer Discretionary – 4.6%9,000 AirTran Holdings, Inc. 51,405 49,341

26,400 Canadian Tire Corporation, Limited 1,416,890 1,514,04057,956 Magna International Inc. 2,615,728 3,082,10088,273 Shaw Communications, Inc., Class B 1,895,900 1,906,697

100,953 Shoppers Drug Mart Corporation 3,891,782 4,582,257111,713 Thomson Reuters Corporation 4,620,201 3,787,071

14,491,906 14,921,506


Financials – 30.4%174,558 Bank of Montreal 7,472,124 9,738,591269,560 Bank of Nova Scotia, The 12,838,974 13,259,656200,380 Brookfield Asset Management Inc. 3,363,232 4,676,869119,213 Canadian Imperial Bank of Commerce 6,921,433 8,100,52372,790 Great-West Lifeco Inc. 1,724,130 1,952,22880,780 Intact Financial Corporation 2,244,939 2,979,166

472,440 Manulife Financial Corporation 10,482,053 9,118,09232,600 National Bank of Canada 1,841,681 1,961,216

205,150 Power Corporation of Canada 4,736,765 5,973,968380,432 Royal Bank of Canada 12,205,734 21,441,147


AverageCost ($)

FairValue ($)


99,584 Sun Life Financial Inc. 3,473,551 3,004,449251,368 Toronto-Dominion Bank, The 10,830,271 16,575,206

78,134,887 98,781,111


Telecommunication Services – 4.1%236,801 BCE Inc. 7,615,168 6,855,389190,100 Rogers Communications, Inc., Class B 5,059,131 6,189,656

12,674,299 13,045,045

Utilities – 1.1%57,429 Fortis, Inc. 1,473,221 1,647,06480,870 TransAlta Corporation 1,724,434 1,896,402

3,197,655 3,543,466



1,091 3M Company 75,818 94,6343,120 American Express Company 123,200 132,6771,179 Apple Inc. 225,825 260,7267,030 Applied Materials, Inc. 98,050 102,3328,203 AT&T Inc. 237,629 241,4854,150 Bank of America Corporation 71,214 65,6401,540 Becton, Dickinson and Company 123,476 127,5483,250 Bed Bath & Beyond Inc. 134,339 131,8573,450 Campbell Soup Company 123,737 122,4702,992 Chevron Corporation 228,712 241,8361,440 Chubb Corporation, The 77,021 74,378

13,592 Citigroup Inc. 45,418 47,2501,797 Colgate-Palmolive Company 133,467 155,0051,720 Computer Sciences Corporation 87,312 103,9241,800 ConocoPhillips 100,174 96,4512,160 Constellation Energy Group Inc. 73,578 79,6491,550 Danaher Corporation 123,970 122,4181,600 DaVita, Inc. 98,199 98,6061,178 Diamond Offshore Drilling, Inc. 116,396 121,7653,450 DIRECTV Group Inc., The 100,501 120,8033,700 Dow Chemical Company, The 109,673 107,3692,820 E.I.duPont de Nemours and Company 100,510 99,6912,900 Eli Lilly and Company 113,393 108,642

651 EOG Resources, Inc. 52,382 66,5264,390 Exxon Mobil Corporation 344,888 314,075

14,730 Ford Motor Company 121,816 154,3933,180 Forest Laboratories, Inc. 98,789 107,2081,550 Freeport-McMoRan Copper & Gold Inc., Class B 117,815 130,7045,160 General Electric Company 75,319 81,994

986 Goldman Sachs Group, Inc., The 154,934 174,573387 Google Inc. 194,175 251,990

3,510 Hartford Financial Services Group, Inc., The 101,814 85,7463,630 Hewlett-Packard Company 182,179 196,2253,520 Honeywell International Inc. 132,097 144,8442,929 Intel Corporation 55,374 62,754

693 International Business Machines Corporation 86,331 95,222


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AverageCost ($)

FairValue ($)


2,947 Johnson & Johnson 194,000 199,1083,499 JPMorgan Chase & Co. 135,742 153,1312,001 Kellogg Company 99,789 111,7822,600 Kimberly-Clark Corporation 178,707 173,970

800 L-3 Communications Holdings, Inc. 70,696 73,0562,341 McDonald’s Corporation 148,636 153,4201,580 McKesson Corporation 101,323 103,6966,035 Merck & Co., Inc. 222,150 231,347

10,372 Microsoft Corporation 284,448 332,1351,770 Northrop Grumman Corporation 102,047 103,7291,478 Occidental Petroleum Corporation 111,202 126,1547,760 Oracle Corporation 185,752 200,0001,450 Owens-Illinois, Inc. 50,409 50,0572,100 Peabody Energy Corporation 98,976 99,5362,200 PepsiCo, Inc. 148,550 140,413

11,502 Pfizer Inc. 202,262 219,736395 priceline.com Incorporated 50,794 90,392

1,783 Procter & Gamble Company, The 110,693 113,4801,860 Prudential Financial, Inc. 101,228 97,1853,200 QUALCOMM Incorporated 151,868 155,4712,700 Reynolds American Inc. 152,385 150,206

27,775 S&P 500 Deposit Receipts 3,124,358 3,250,7972,038 Sempra Energy 103,466 119,821

789 Simon Property Group, Inc. 61,143 66,1261,433 Stericycle, Inc. 82,810 83,0321,853 Stryker Corporation 84,453 98,0261,694 Teradata Corporation 42,392 55,8472,550 TJX Companies Inc., The 100,157 97,8602,465 Travelers Companies, Inc., The 126,412 129,0562,400 United Technologies Corporation 160,271 174,7792,500 Unum Group 50,450 51,2265,077 Verizon Communications Inc. 170,141 176,6541,167 W.W. Grainger, Inc. 112,897 118,6793,647 Wal-Mart Stores, Inc. 201,806 204,6523,676 Walgreen Co. 128,548 141,6124,270 Walt Disney Company, The 124,249 144,6282,100 WellPoint Inc. 117,376 128,3628,156 Wells Fargo & Company 220,024 230,7652,450 Western Digital Corporation 100,192 113,6035,514 Xcel Energy, Inc. 123,587 122,887


TOTAL EQUITIES 251,481,701 319,202,236


0.18% to 0.23% due fromFeb. 18, 2010 to Apr. 1, 2010 5,352,249 5,353,313



NET ASSETS – 100% 324,943,897




Canadian EquityEnergy 25.3 19.4Materials 17.3 14.5Industrials 6.7 6.1Consumer Discretionary 4.6 7.9Consumer Staples 1.2 3.5Financials 30.4 27.1Information Technology 3.5 2.6Telecommunication Services 4.1 3.3Utilities 1.1 5.3Index Units – –

Foreign Equities 4.1 7.3Currency Options – –Money Market Instruments 1.6 2.9




(Level 2) ($)



Equities 319,202,236 – – 319,202,236Money Market Instruments – 5,353,313 – 5,353,313



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A. Risk managementThe investment objective of the Scotia Canadian Blue Chip Fund (the “Fund”)is long-term capital growth. It invests primarily in a broad range of high qualityequity securities of large Canadian companies.




CurrencyFinancial




U.S. Dollar 13,365,474 – 13,365,474 4.1

Total 13,365,474 – 13,365,474 4.1

December 31, 2008

CurrencyFinancial




U.S. Dollar 20,179,735 – 20,179,735 7.3

Total 20,179,735 – 20,179,735 7.3



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009 and December 31, 2008, themajority of the Fund’s financial assets and liabilities are non-interest bearing,accordingly, the Fund is not subject to a material amount of risk due tofluctuations in the prevailing levels of interest rates.


Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. As at December 31, 2009 and December 31, 2008,the Fund had no significant investment in debt instruments and/or derivatives.




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Scotia Canadian Equity Fund(formerly, Scotia Cassels Canadian Equity Fund)



340,215,166 176,467,033

LIABILITIESPayable for securities purchased 15,028,504 8,158,144Distributions payable – 319Accrued expenses 16,043 23,315

15,044,547 8,181,778

Net Assets $325,170,619 $168,285,255

NET ASSETS PER CLASSClass I Units $120,904,330 $ –Manager Class Units* $204,266,289 $168,285,255




2009 2008INVESTMENT INCOMEDividends $ 5,009,339 $ 2,428,002Interest 278,595 1,072,326Capital gains distributions received – 781Securities lending 20,367 60,405Foreign withholding taxes/Tax reclaims – (1,486)

5,308,301 3,560,028


257,962 227,066Absorbed expenses (39) (470)

257,923 226,596


Net realized gain (loss) on investments sold (9,994,225) (4,935,145)Net realized gain (loss) on foreign exchange – (3,920)Transaction costs (649,096) (253,635)Change in unrealized appreciation (depreciation) of investments 46,624,958 (31,929,676)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** $10,716,471 $ –Manager Class Units* $30,315,544 $(33,788,944)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass I Units** $ 2.33 $ –Manager Class Units* $ 1.94 $ (3.19)


2009 2008NET ASSETS – BEGINNING OF PERIODManager Class Units* $168,285,255 $113,247,400

168,285,255 113,247,400

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** 10,716,471 –Manager Class Units* 30,315,544 (33,788,944)

41,032,015 (33,788,944)


Class I Units** (1,792,608) –Manager Class Units* (2,696,692) (3,199,576)

(4,489,300) (3,199,576)



Reinvested distributionsClass I Units** 1,792,608 –Manager Class Units* 2,385,990 3,134,375

Payments on redemptionClass I Units** (4,636,442) –Manager Class Units* (89,482,759) (43,183,276)

120,342,649 92,026,375


156,885,364 55,037,855


$325,170,619 $168,285,255




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AverageCost ($)

FairValue ($)

EQUITIES – 97.3%Energy – 26.5%

109,100 Bonavista Energy Trust 2,183,578 2,429,657156,570 Canadian Natural Resources Limited 9,866,909 11,847,652223,807 Canadian Oil Sands Trust 6,241,161 6,664,972186,054 Cenovus Energy Inc. 5,057,758 4,924,849111,050 Enbridge Inc. 4,579,811 5,391,478257,454 EnCana Corporation 7,981,122 8,766,309137,280 Husky Energy Inc. 4,288,051 4,121,14624,094 Imperial Oil Ltd. 986,544 978,457

142,130 Nexen Inc. 3,499,854 3,573,14868,798 Petrobank Energy and Resources Ltd. 2,741,541 3,510,762


78,839,859 86,088,852

Materials – 18.0%116,590 Agnico-Eagle Mines Limited 7,042,654 6,621,14650,050 Agrium Inc. 2,552,746 3,238,736

338,666 Barrick Gold Corporation 13,549,886 14,020,771120,581 Cameco Corporation 3,714,534 4,076,844194,829 Goldcorp, Inc. 7,470,737 8,048,38636,575 Inmet Mining Corporation 1,996,494 2,324,707

102,739 Potash Corporation of Saskatchewan Inc. 10,282,867 11,723,547228,707 Teck Resources Limited, Class B 6,281,775 8,393,547

52,891,693 58,447,684

Industrials – 6.9%525,523 Bombardier Inc., Class B 2,323,947 2,517,255186,225 Canadian National Railway Company 9,540,242 10,642,75982,920 Canadian Pacific Railway Limited 4,031,011 4,701,56487,110 SNC-Lavalin Group Inc. 3,682,778 4,696,971

19,577,978 22,558,549

Consumer Discretionary – 4.8%30,350 Canadian Tire Corporation, Limited 1,662,024 1,740,57358,101 Magna International Inc. 2,732,969 3,089,81189,840 Shaw Communications, Inc., Class B 1,889,393 1,940,544

111,860 Shoppers Drug Mart Corporation 5,019,878 5,077,325115,078 Thomson Reuters Corporation 4,100,446 3,901,144

15,404,710 15,749,397


Financials – 31.2%159,310 Bank of Montreal 7,650,978 8,887,905271,500 Bank of Nova Scotia, The 11,808,805 13,355,085210,740 Brookfield Asset Management Inc. 4,862,117 4,918,672126,440 Canadian Imperial Bank of Commerce 8,019,097 8,591,59875,280 Great-West Lifeco Inc. 1,926,441 2,019,01087,710 Intact Financial Corporation 2,765,194 3,234,745

468,796 Manulife Financial Corporation 11,161,812 9,047,76331,090 National Bank of Canada 1,791,579 1,870,374

221,930 Power Corporation of Canada 6,166,693 6,462,602400,820 Royal Bank of Canada 19,445,283 22,590,214100,263 Sun Life Financial Inc. 3,410,368 3,024,935265,920 Toronto-Dominion Bank, The 15,838,253 17,534,765

94,846,620 101,537,668



AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Telecommunication Services – 4.0%

220,854 BCE Inc. 6,038,348 6,393,723190,880 Rogers Communications, Inc., Class B 6,032,890 6,215,053

12,071,238 12,608,776

Utilities – 1.1%57,785 Fortis, Inc. 1,500,805 1,657,27484,110 TransAlta Corporation 1,933,527 1,972,380

3,434,332 3,629,654

TOTAL EQUITIES 291,785,855 316,266,780





NET ASSETS – 100.0% 325,170,619




Energy 26.5 20.0Materials 18.0 15.3Industrials 6.9 6.2Consumer Discretionary 4.8 8.3Consumer Staples 1.2 3.6Financials 31.2 26.7Information Technology 3.6 2.7Telecommunication Services 4.0 3.3Utilities 1.1 5.0Index Units – 2.9Money Market Instruments 7.1 10.6




(Level 2) ($)






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78


A. Risk managementThe investment objective of the Scotia Canadian Equity Fund (the “Fund”) islong-term capital growth. It invests primarily in a broad range of Canadianequity securities.








F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, S&P/TSX Composite Index, as ofDecember 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $61,132,076, 18.8% of the Fund’s NetAssets (December 31, 2008-$14,564,162, 8.7% of the Fund’s Net Assets). TheFund’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia Canadian Equity Fund (Continued)(formerly, Scotia Cassels Canadian Equity Fund)


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Scotia Canadian Growth FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $528,960,002 $546,270,107Cash 142,093 149,506Accrued investment income 781,798 897,595Receivable for securities sold – 2,128,001Subscriptions receivable 70,302 56,695Receivable for currency forward contracts 1,052 69,169

529,955,247 549,571,073

LIABILITIESPayable for securities purchased – 2,657,490Distributions payable – 159Redemptions payable 141,233 87,968Accrued expenses 381,619 639,657Payable for futures contracts – 200,402

522,852 3,585,676

Net Assets $529,432,395 $545,985,397

NET ASSETS PER CLASSClass A Units $421,236,916 $340,437,945Advisor Class Units $ 465,349 $ 168,743Class F Units $ 166,561 $ 20,072Class I Units $107,563,569 $205,358,637

UNITS OUTSTANDINGClass A Units 8,158,679 8,541,263Advisor Class Units 9,040 4,242Class F Units 3,121 488Class I Units 1,852,957 4,621,765

NET ASSETS PER UNITClass A Units $ 51.63 $ 39.86Advisor Class Units $ 51.48 $ 39.78Class F Units $ 53.37 $ 41.10Class I Units $ 58.05 $ 44.43



13,022,090 16,156,436EXPENSESManagement fees (note 4) 7,008,392 9,393,607Audit fees 28,118 32,845Independent Review Committee fees 2,938 2,986Custodian fees 36,584 65,149Filing fees 51,787 39,834Legal fees 16,823 16,195Unitholder reporting costs 77,117 83,580Unitholder administration, service fees and GST 927,599 1,092,590


8,129,168 10,659,898Net investment income (loss) 4,892,922 5,496,538Net realized gain (loss) on investments sold 91,664,435 (126,399,407)Net realized gain (loss) on futures contracts 721,979 (209,094)Net realized gain (loss) on currency forwards 6,037,729 (2,050,728)Net realized gain (loss) on foreign exchange (215,791) (1,013,619)Transaction costs (9,757,238) (4,558,926)Change in unrealized appreciation (depreciation) of investments 60,778,264 (185,791,017)Change in unrealized appreciation (depreciation) of currency forwards (68,117) 18,295Net gain (loss) on investments and transaction costs 149,161,261 (320,004,496)Increase (decrease) in Net Assets from operations $154,054,183 $(314,507,958)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 98,480,578 $(215,712,643)Advisor Class Units $ 67,999 $ (18,497)Class F Units $ 9,187 $ (20,434)Class I Units $ 55,496,419 $ (98,756,384)INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 11.74 $ (24.40)Advisor Class Units $ 11.33 $ (26.28)Class F Units $ 10.69 $ (24.64)Class I Units $ 14.66 $ (26.37)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 340,437,945 $ 590,604,928Advisor Class Units 168,743 –Class F Units 20,072 57,937Class I Units 205,358,637 219,293,901

545,985,397 809,956,766

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 98,480,578 (215,712,643)Advisor Class Units 67,999 (18,497)Class F Units 9,187 (20,434)Class I Units 55,496,419 (98,756,384)

154,054,183 (314,507,958)


Class F Units (630) –Class I Units (644,939) (1,323,304)

(645,569) (1,323,304)


Class A Units 19,854,744 27,788,288Advisor Class Units 245,684 187,240Class F Units 137,302 –Class I Units 14,924,486 93,153,779

Reinvested distributionsClass A Units – (689)Class F Units 630 –Class I Units 644,939 1,323,145

Payments on redemptionClass A Units (37,536,351) (62,241,939)Advisor Class Units (17,077) –Class F Units – (17,431)Class I Units (168,215,973) (8,332,500)

(169,961,616) 51,859,893

INCREASE (DECREASE) IN NET ASSETSClass A Units 80,798,971 (250,166,983)Advisor Class Units 296,606 168,743Class F Units 146,489 (37,865)Class I Units (97,795,068) (13,935,264)

(16,553,002) (263,971,369)

NET ASSETS – END OF PERIODClass A Units 421,236,916 340,437,945Advisor Class Units 465,349 168,743Class F Units 166,561 20,072Class I Units 107,563,569 205,358,637

$ 529,432,395 $ 545,985,397


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Scotia Canadian Growth Fund (Continued)



AverageCost ($)

FairValue ($)


900,000 Bankers Petroleum Ltd. 2,519,507 5,589,000400,000 Canadian Natural Resources Limited 26,602,024 30,268,000(1,000) Canadian Natural Resources Limited, Written Put Options $65.00

Jan. 15, 2010 (97,700) (10,503)200,000 Crescent Point Energy Corp. 5,636,377 7,890,000160,000 Crew Energy Inc. 1,457,136 2,334,400100,000 EnCana Corporation 3,095,686 3,405,000

(500) EnCana Corporation, Written Put Options $30.00 Jan. 15, 2010 (70,367) (5,251)150,000 Husky Energy Inc. 4,309,173 4,503,00080,000 Niko Resources Ltd. 6,376,722 7,858,400

400,000 Pacific Rubiales Energy Corp. 5,988,495 6,160,000300,000 Paladin Energy Limited 1,162,395 1,173,000130,000 Petrobank Energy and Resources Ltd. 6,337,899 6,633,900950,000 Suncor Energy, Inc. 34,604,083 35,254,500(1,000) Suncor Energy, Inc., Written Put Options $32.00 Jan. 15, 2010 (67,171) (5,251)

97,854,259 111,048,195

Materials – 16.5%50,000 Agnico-Eagle Mines Limited 3,115,574 2,839,500

(500) Agnico-Eagle Mines Limited, Written Call Options $55.00 Jan. 15, 2010 (87,561) (78,769)(500) Agnico-Eagle Mines Limited, Written Put Options $55.00 Jan. 15, 2010 (130,014) (120,779)

750,000 Apollo Gold Corporation Warrants $0.65 Jul. 21, 2011* – –100,000 Barrick Gold Corporation 4,187,007 4,140,000300,000 Centerra Gold Inc. 3,075,000 3,204,000

(300) Centerra Gold Inc. Written Call Options $11.00 Jan. 15, 2010 (18,000) (9,000)400,000 Colossus Minerals Inc. 2,248,133 2,304,000175,000 Detour Gold Corporation 2,567,197 3,116,750

(800) Detour Gold Corporation, Written Call Options $17.00 Jan. 15, 2010 (54,400) (100,000)500,000 Electric Metals, Inc. 125,000 115,000250,000 Electric Metals, Inc. Warrants $0.40 Aug. 21, 2010* – –60,000 First Quantum Minerals Ltd. 4,777,328 4,815,000

300,000 Gerdau Ameristeel Corporation 2,068,216 2,610,000350,000 Goldcorp, Inc. 14,670,816 14,458,500(1,000) Goldcorp, Inc., Written Call Options $42.00 Jan. 15, 2010 (47,684) (44,111)(1,000) Goldcorp, Inc., Written Put Options $39.00 Jan. 15, 2010 (141,076) (116,578)

100,000 Hathor Exploration Limited 177,300 178,000100,000 HudBay Minerals, Inc. 1,512,624 1,352,000

(500) HudBay Minerals, Inc., Written Call Options $15.00 Jan. 15, 2010 (24,500) (10,000)(500) HudBay Minerals, Inc., Written Put Options $12.00 Jan. 15, 2010 (17,000) (1,000)

80,000 Inmet Mining Corporation 5,053,221 5,084,8001,220,000 Perseus Mining Limited, Subscription Receipts* 1,781,200 2,027,591

160,000 Potash Corporation of Saskatchewan Inc. 17,471,025 18,257,599(600) Potash Corporation of Saskatchewan Inc., Written Call

Options $115.00 Jan. 15, 2010 (145,834) (91,372)(300) Potash Corporation of Saskatchewan Inc., Written Put Options

$105.00 Jan. 15, 2010 (143,297) (63,961)900,000 Romarco Minerals, Inc. 862,200 1,512,000

1,000,000 San Gold Corporation 2,891,802 3,640,000100,000 Sino-Forest Corporation 1,777,610 1,932,000350,000 Teck Resources Limited, Class B 12,106,976 12,845,000300,000 Ventana Gold Corporation 2,803,846 2,415,000400,000 Western Coal Corporation 1,025,912 1,300,000

83,488,621 87,511,170

Industrials – 4.3%200,000 Canadian National Railway Company 10,435,793 11,430,00080,000 Onex Corporation 2,067,826 1,881,600

175,000 SNC-Lavalin Group Inc. 7,612,968 9,436,00030,000 Xebec Adsorption Inc. Warrants $2.15 May 13, 2010* – –

20,116,587 22,747,600


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Consumer Discretionary – 1.4%

50,000 George Weston Limited 3,068,920 3,341,00050,000 Shoppers Drug Mart Corporation 2,243,108 2,269,50050,000 Thomson Reuters Corporation 1,695,012 1,695,000

7,007,040 7,305,500

Consumer Staples – 0.3%50,000 Gildan Activewear Inc. 1,306,300 1,278,500

Health Care – 0.1%350,000 Bio-Extraction Inc., Restricted Feb. 15, 2010* 437,500 735,000

Financials – 25.3%80,000 AGF Management Limited, Class B 931,728 1,357,600

100,000 Bank of Montreal 5,352,725 5,579,000700,000 Bank of Nova Scotia, The 28,226,056 34,433,000100,000 Canadian Western Bank 2,232,474 2,190,000556,000 Manulife Financial Corporation 11,485,344 10,730,800(2,000) Manulife Financial Corporation, Written Call Options $19.00

Apr. 16, 2010 (250,000) (278,000)150,000 National Bank of Canada 9,081,620 9,024,000120,000 Power Corporation of Canada 3,316,865 3,494,400500,000 Royal Bank of Canada 20,928,441 28,180,00090,000 TMX Group Inc. 2,811,073 2,979,900


117,890,524 133,957,700

Information Technology – 4.6%100,000 Guestlogix Inc. 124,930 91,000350,000 Research In Motion Limited 25,151,028 24,830,509

(800) Research In Motion Limited, Written Put Options $66.63 Jan. 15, 2010 (137,400) (120,989)(800) Research In Motion Limited, Written Put Options $70.00 Jan. 15, 2010 (253,809) (285,669)

24,884,749 24,514,851

Telecommunication Services – 4.7%600,000 Rogers Communications, Inc., Class B 18,252,479 19,536,000(3,000) Rogers Communications, Inc., Class B, Written Call Options

$30.00 Jan. 15, 2010 (171,436) (472,615)250,000 Sensio Technologies Inc. 732,606 787,500150,000 TELUS Corporation 5,125,950 5,106,000(1,500) TELUS Corporation, Written Call Options $34.00 Jan. 15, 2010 (42,000) (75,000)

23,897,599 24,881,885


FOREIGN EQUITIES – 14.7%Brazil – 0.6%

100,000 Vale SA ADR 2,967,438 3,046,789

Cayman Islands – 0.1%10,000 Trina Solar Limited 574,044 566,822

China – 0.1%70,000 Concord Medical Services Holdings Limited 766,341 632,253

Israel – 1.1%100,000 Teva Pharmaceutical Industries Ltd. ADR 5,471,688 5,900,331

Papua New Guinea – 0.5%100,000 Lihir Gold Limited Sponsored ADR 3,402,646 3,064,643

(800) Lihir Gold Limited Sponsored ADR, Written Call Options $25.00Jan. 15, 2010 (253,383) (378,092)

3,149,263 2,686,551

United States – 12.3%50,000 Abbott Laboratories 2,859,992 2,833,062

150,000 Aflac Incorporated 7,141,648 7,286,142


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AverageCost ($)

FairValue ($)


25,000 Alexion Pharmaceuticals, Inc. 1,237,521 1,280,786100,000 Amgen Inc. 5,837,408 5,941,291

2,000 Baidu Inc. 854,186 863,79275,000 Dow Chemical Company, The 2,042,493 2,176,390

100,000 E-House China Holdings Ltd. 2,147,727 1,903,0611,300,000 Gran Tierra Energy, Inc. 6,634,225 7,800,000

100,000 Hess Corporation 6,064,318 6,349,84035,000 Human Genome Sciences, Inc. 983,528 1,122,250

(500) Human Genome Sciences, Inc., Written Put Options $30.00Jan. 15, 2010 (54,241) (42,010)

50,000 International Game Technology 1,082,344 985,66475,000 Kellogg Company 4,029,736 4,189,729

300,000 Microsoft Corporation 8,362,924 9,606,68030,000 Peabody Energy Corporation 1,475,253 1,421,94050,000 PepsiCo, Inc. 3,144,056 3,191,19950,000 RadioShack Corporation 1,026,370 1,023,47375,000 Raytheon Company 3,969,146 4,058,18450,000 Sherwin-Williams Company, The 3,167,749 3,237,410

Numberof Shares/Number ofContracts/FaceValue ($) Issuer

AverageCost ($)

FairValue ($)


1,720 Wells Fargo & Company 45,660 48,665(2,000) Wells Fargo & Company, Written Put Options $25.00 Jan. 15, 2010 (162,432) (52,513)

61,889,611 65,225,035


TOTAL EQUITIES 451,701,564 492,038,182




Currency Forward Contracts – 0.0% 1,052OTHER ASSETS, LESS LIABILITIES – 0.1% 471,341

NET ASSETS – 100.0% 529,432,395






December 31, 2009 ($)


(Depreciation)

Jan. 29, 2010 Canadian Dollar 10,510,000 U.S. Dollar 10,000,000 10,508,948 1,052

1,052





Canadian EquitiesEnergy 21.0 24.9Materials 16.5 12.8Industrials 4.3 4.3Consumer Discretionary 1.4 3.5Consumer Staples 0.3 4.5Health Care 0.1 –Financials 25.3 20.2Information Technology 4.6 2.0Telecommunication Services 4.7 5.3

Foreign Equities 14.7 19.6Money Market Instruments 7.0 3.0Currency Forward Contracts – –




(Level 2) ($)



Equities 491,637,054 2,762,591 – 494,399,645Warrants – – – –Options (Written Put) (824,504) – – (824,504)Money Market Instruments – 36,921,820 – 36,921,820Currency Forward Contracts – 1,052 – 1,052




(Level 2) ($)



Options (Written Call) 1,536,959 – – 1,536,959

Total Investments 1,536,959 – – 1,536,959


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A. Risk managementThe investment objective of the Scotia Canadian Growth Fund (the “Fund”) islong-term capital growth. It invests primarily in a broad range of Canadianequity securities.




CurrencyFinancial




U.S. Dollar 72,387,283 (10,508,948) 61,878,335 11.7

Total 72,387,283 (10,508,948) 61,878,335 11.7

December 31, 2008

CurrencyFinancial




U.S. Dollar 107,446,684 (48,901,562) 58,545,122 10.7

Total 107,446,684 (48,901,562) 58,545,122 10.7


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, the

Fund’s Net Assets would have decreased or increased, respectively byapproximately $6,187,834, 1.2% of the Fund’s Net Assets (December 31, 2008-$5,854,512, 1.1% of the Fund’s Net Assets). In practice, actual results maydiffer from this sensitivity analysis and the difference could be material.







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Scotia Canadian Small Cap FundS T AT E M E N T O F N E T A S S E T SAs at December 31


75,051,519 125,631,395

LIABILITIESPayable for securities purchased – 440,000Distributions payable 455 584Redemptions payable 46,840 12,976Accrued expenses 64,586 74,050

111,881 527,610

Net Assets $74,939,638 $125,103,785

NET ASSETS PER CLASSClass A Units $58,179,507 $ 32,153,943Class F Units $ 6,321 $ –Class I Units $16,753,810 $ 92,949,842

UNITS OUTSTANDINGClass A Units 2,914,237 2,808,373Class F Units 322 –Class I Units 768,314 7,437,756

NET ASSETS PER UNITClass A Units $ 19.96 $ 11.45Class F Units $ 19.62 $ –Class I Units $ 21.81 $ 12.50


2009 2008INVESTMENT INCOMEDividends $ 1,404,722 $ 1,850,327Interest 1,891,028 2,101,068Securities lending 128,759 160,733

3,424,509 4,112,128

EXPENSESManagement fees (note 4) 859,531 1,104,658Audit fees 21,270 19,056Independent Review Committee fees 580 606Custodian fees 6,184 8,150Filing fees 30,428 30,750Legal fees 6,629 8,682Unitholder reporting costs 21,407 23,182Unitholder administration, service fees and GST 202,366 235,135


1,115,061 1,386,863


Net realized gain (loss) on investments sold (8,180,799) (16,929,331)Net realized gain (loss) on foreign exchange (82,327) (680)Transaction costs (908,809) (584,319)Change in unrealized appreciation (depreciation) of investments 79,833,935 (71,780,665)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $25,480,749 $(31,339,023)Class F Units $ 321 $ –Class I Units $47,490,378 $(55,452,805)Manager Class Units* $ – $ 222,098

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 9.13 $ (10.51)Class F Units $ 1.03 $ –Class I Units $ 9.58 $ (10.84)Manager Class Units* $ – $ 0.57


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 32,153,943 $ 71,490,806Class I Units 92,949,842 107,565,904Manager Class Units* – 27,314,043

125,103,785 206,370,753

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 25,480,749 (31,339,023)Class F Units 321 –Class I Units 47,490,378 (55,452,805)Manager Class Units* – 222,098

72,971,448 (86,569,730)


Class A Units (1,803,632) –Class F Units (303) –Class I Units (787,708) (2,713,099)

(2,591,643) (2,713,099)


Class A Units 5,942,697 1,984,617Class F Units 6,000 –Class I Units 4,157,432 49,007,800Manager Class Units* – 25,874

Reinvested distributionsClass A Units 1,798,404 145Class F Units 303 –Class I Units 787,708 2,712,515

Payments on redemptionClass A Units (5,392,654) (9,982,602)Class I Units (127,843,842) (8,170,473)Manager Class Units* – (27,562,015)

(120,543,952) 8,015,861

INCREASE (DECREASE) IN NET ASSETSClass A Units 26,025,564 (39,336,863)Class F Units 6,321 –Class I Units (76,196,032) (14,616,062)Manager Class Units* – (27,314,043)

(50,164,147) (81,266,968)

NET ASSETS – END OF PERIODClass A Units 58,179,507 32,153,943Class F Units 6,321 –Class I Units 16,753,810 92,949,842Manager Class Units* – –

$ 74,939,638 $125,103,785



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AverageCost ($)

FairValue ($)


2,200,000 Aztek Energy Ltd., Subscription Receipts 374,000 781,000265,000 Bankers Petroleum Ltd. 667,643 1,645,650725,000 Connacher Oil and Gas Limited 675,230 928,00085,000 Crew Energy Inc. 637,850 1,240,150

200,000 Fairborne Energy Ltd. 802,586 948,000250,000 Galleon Energy Inc. 2,019,196 1,312,500180,000 NAL Oil & Gas Trust 1,568,249 2,458,799

8,000 Niko Resources Ltd. 395,827 785,84080,000 NuVista Energy Ltd. 616,218 993,600

300,000 Paladin Energy Limited 928,339 1,173,000165,000 Pan Orient Energy Corporation 826,682 1,247,400750,000 Terra Energy Corp. 972,866 1,162,500350,000 West Energy Ltd. 1,999,886 1,358,000

12,484,572 16,034,439

Materials – 11.3%130,000 5N Plus Inc. 588,683 770,90016,021 Centerra Gold Inc. 75,760 171,104

135,000 Consolidated Thompson Iron Mines Limited 770,490 908,55050,000 Detour Gold Corporation 712,500 890,500

335,000 First Uranium Corporation 1,556,010 760,45090,000 Harry Winston Diamond Corporation 913,224 899,10050,000 HudBay Minerals, Inc. 388,453 676,00060,000 Keegan Resources, Inc 370,940 397,80070,000 Minefinders Corporation Ltd. 568,698 758,800

315,000 Perseus Mining Limited, Subscription Receipts* 459,900 523,51760,000 Quadra Mining Ltd. 439,314 870,000

125,000 Sherritt International Corporation 774,683 816,250

7,618,655 8,442,971

Industrials – 16.1%50,000 Armtec Infrastructure Income Fund 767,529 1,263,000

260,000 Canam Group Inc. 1,715,066 1,833,00085,000 Davis + Henderson Income Fund 1,177,921 1,434,800

125,000 IESI-BFC Ltd. 2,374,049 2,096,25017,500 MacDonald, Dettwiler and Associates Ltd. 495,887 745,150

250,000 Neo Material Technologies, Inc. 470,589 1,140,000160,000 New Flyer Industries Inc. 1,336,121 1,598,400808,204 ProSep Inc. 637,602 133,354100,000 Pure Technologies Ltd. 217,673 433,00075,000 Vicwest Income Fund 877,613 1,408,50069,780 Xebec Adsorption Inc. Warrants $2.15 May 13, 2010* – –

10,070,050 12,085,454

Consumer Discretionary – 13.2%65,000 Cineplex Galaxy Income Fund 1,023,513 1,184,30055,000 Cogeco Cable Inc. 1,792,820 1,920,600

125,000 Great Canadian Gaming Corporation 846,115 982,500200,000 Keystone North America Inc. 1,620,902 1,584,000150,000 Le Chateau Inc. 1,762,272 2,047,50040,000 Quebecor Inc., Class B 790,489 1,084,40090,000 WestJet Airlines Ltd. 1,173,697 1,110,600

9,009,808 9,913,900

Consumer Staples – 4.6%162,600 Atrium Innovations Inc. 2,178,864 2,562,57647,500 North West Company Fund, The 852,331 902,025

3,031,195 3,464,601


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Health Care – 2.7%

175,000 Cangene Corporation 1,102,085 885,50080,000 CML Healthcare Income Fund 1,053,414 1,104,800

2,155,499 1,990,300

Financials – 10.2%45,000 Canadian Western Bank 519,747 985,500

100,000 Cash Store Financial Services Inc., The 583,189 1,100,000100,000 Equitable Group Inc. 2,524,218 2,110,00060,000 Home Capital Group Inc. 1,288,473 2,501,400

110,000 Killam Properties Inc. 700,044 957,000

5,615,671 7,653,900

Information Technology – 8.7%60,000 Aastra Technologies Limited 1,046,146 2,067,600

145,000 Absolute Software Corporation 1,011,186 761,250375,000 COM DEV International Ltd. 1,490,311 1,282,500240,000 Matrikon Inc. 841,073 681,600145,000 Miranda Technologies Inc. 995,577 762,70055,000 Ruggedcom, Inc. 1,108,807 987,800

6,493,100 6,543,450

Utilities – 2.9%40,000 Capital Power Corporation 895,342 854,800

110,000 Northland Power Income Fund 1,145,724 1,306,800

2,041,066 2,161,600



400,000 CGA Mining Limited 694,000 820,000850,000 Mineral Deposits Limited 516,270 779,40060,000 Perseus Mining Limited 105,593 98,964

1,315,863 1,698,364

United States – 2.8%175,000 Gran Tierra Energy, Inc. 852,833 1,050,000660,000 US Geothermal Inc. 891,000 1,062,600330,000 US Geothermal Inc. Warrants $1.75 Aug. 17, 2011* – –

1,743,833 2,112,600


TOTAL EQUITIES 61,579,312 72,101,579

MONEY MARKET INSTRUMENTS – 3.6%925,000 Government of Canada Treasury Bills

0.18% to 0.23% due fromFeb. 4, 2010 to Mar. 4, 2010 924,531 924,784

170,000 Government of Canada Treasury Bills(U.S.) 0.11% due Mar. 11, 2010 179,882 178,506


Feb. 4, 2010 to Apr. 1, 2010 1,580,835 1,564,676

2,685,248 2,667,966



NET ASSETS – 100.0% 74,939,638



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Canadian EquitiesEnergy 21.4 22.7Materials 11.3 13.2Industrials 16.1 13.0Consumer Discretionary 13.2 8.6Consumer Staples 4.6 7.4Health Care 2.7 2.0Financials 10.2 10.8Information Technology 8.7 8.6Utilities 2.9 –

Foreign Equities 5.1 4.9Money Market Instruments 3.6 8.8




(Level 2) ($)



Equities 70,699,698 1,401,881 – 72,101,579Money Market Instruments – 2,667,966 – 2,667,966



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A. Risk managementThe investment objective of the Scotia Canadian Small Cap Fund (the “Fund”)is aggressive long-term capital growth. It invests primarily in equity securities ofsmall and medium Canadian companies listed on major Canadian stockexchanges.




CurrencyFinancial




U.S. Dollar 1,747,780 – 1,747,780 2.3Australian Dollar 878,363 – 878,363 1.2

Total 2,626,143 – 2,626,143 3.5

December 31, 2008

CurrencyFinancial




U.S. Dollar 2,140,667 – 2,140,667 1.7

Total 2,140,667 – 2,140,667 1.7







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, the BMO Nesbitt Burns Small Cap Index,as of December 31, 2009, with all other variables held constant, would result inan increase or decrease of approximately $14,838,048, 19.8% of the Fund’s NetAssets (December 31, 2008-$11,287,699, 9.0% of the Fund’s Net Assets). TheFund’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia Resource FundS T AT E M E N T O F N E T A S S E T SAs at December 31


190,796,364 74,753,194


225,908 194,838

Net Assets $190,570,456 $74,558,356

NET ASSETS PER CLASSClass A Units $138,916,693 $74,558,356Class I Units $ 51,653,763 $ –

UNITS OUTSTANDINGClass A Units 6,576,707 5,821,514Class I Units 2,433,693 –

NET ASSETS PER UNITClass A Units $ 21.12 $ 12.81Class I Units $ 21.22 $ –


2009 2008INVESTMENT INCOMEDividends $ 1,217,787 $ 992,563Interest 295,147 1,970,885Securities lending 71,925 74,741Foreign withholding taxes/Tax reclaims (51,754) (57,689)

1,533,105 2,980,500

EXPENSESManagement fees (note 4) 2,134,933 2,370,052Audit fees 19,874 18,346Independent Review Committee fees 790 717Custodian fees 4,213 6,892Filing fees 22,096 20,170Legal fees 7,408 6,059Unitholder reporting costs 26,637 25,768Unitholder administration, service fees and GST 281,996 287,544


2,494,819 2,696,329

Net investment income (loss) (961,714) 284,171

Net realized gain (loss) on investments sold (3,491,485) 81,919Net realized gain (loss) on foreign exchange 237,459 768,656Transaction costs (471,165) (318,171)Change in unrealized appreciation (depreciation) of investments 66,021,202 (61,513,765)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $53,092,022 $(60,698,091)Class F Units $ – $ 901Class I Units** $ 8,242,275 $ –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 8.34 $ (10.61)Class F Units $ – $ 2.70Class I Units** $ 3.20 $ –


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 74,558,356 $128,059,149Class F Units – 10,544

74,558,356 128,069,693

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 53,092,022 (60,698,091)Class F Units – 901Class I Units** 8,242,275 –

61,334,297 (60,697,190)


Class A Units 27,683,577 29,970,373Class I Units** 51,138,010 –

Payments on redemptionClass A Units (16,417,262) (22,773,075)Class F Units – (11,445)Class I Units** (7,726,522) –

54,677,803 7,185,853

INCREASE (DECREASE) IN NET ASSETSClass A Units 64,358,337 (53,500,793)Class F Units – (10,544)Class I Units** 51,653,763 –

116,012,100 (53,511,337)

NET ASSETS – END OF PERIODClass A Units 138,916,693 74,558,356Class I Units** 51,653,763 –

$190,570,456 $ 74,558,356

** Start date September 8, 2009.


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AverageCost ($)

FairValue ($)


375,000 Angle Energy Inc. 2,344,025 2,512,500700,000 Bankers Petroleum Ltd. 2,220,299 4,347,00090,000 Canadian Natural Resources Limited 4,898,344 6,810,30080,000 Canadian Oil Sands Trust 2,045,803 2,382,400

180,000 Cenovus Energy Inc. 5,867,308 4,764,6001,900,000 Connacher Oil and Gas Limited 1,788,470 2,432,000

65,000 Crescent Point Energy Corp. 1,750,786 2,564,250225,000 Crew Energy Inc. 1,617,286 3,282,75040,000 Enbridge Inc. 1,519,854 1,942,000

180,000 EnCana Corporation 6,631,888 6,129,000500,000 Fairborne Energy Ltd. 1,940,968 2,370,00085,000 Imperial Oil Ltd. 3,389,061 3,451,850

237,500 NAL Oil & Gas Trust 2,142,354 3,244,25020,000 Niko Resources Ltd. 1,107,929 1,964,600

750,000 Paladin Energy Limited 2,788,821 2,932,500450,000 Pan Orient Energy Corporation 2,204,966 3,402,00075,000 Petrobank Energy and Resources Ltd. 2,315,603 3,827,250

205,000 Suncor Energy, Inc. 7,477,254 7,607,550300,000 Talisman Energy Inc. 4,625,738 5,865,000675,000 West Energy Ltd. 2,538,907 2,619,000

61,215,664 74,450,800

Materials – 32.2%37,500 Agrium Inc. 1,985,970 2,426,625

175,000 Anatolia Minerals Development Ltd. 553,839 528,500250,000 Apollo Gold Corp Restricted* 112,500 115,000

1,250,000 Apollo Gold Corporation 625,000 575,0001,000,000 Apollo Gold Corporation Warrants $0.65 Jul. 21, 2011* – –

200,000 Barrick Gold Corporation 7,776,540 8,280,000110,000 Cameco Corporation 3,539,410 3,719,100226,479 Centerra Gold Inc. 1,608,707 2,418,795125,000 Detour Gold Corporation 1,781,250 2,226,250475,000 Equinox Minerals Limited 1,126,372 1,919,00037,500 First Quantum Minerals Ltd. 1,948,413 3,009,375

850,000 First Uranium Corporation 2,900,217 1,929,50090,000 Goldcorp, Inc. 2,764,956 3,717,900

200,000 Harry Winston Diamond Corporation 1,906,112 1,998,0002,000,000 Iberian Minerals Corporation 972,644 960,000

150,000 International Tower Hill Mines Ltd. 542,130 1,105,500145,000 Keegan Resources, Inc 889,420 961,35060,000 Labrador Iron Ore Royalty Income Fund 1,832,309 2,612,400

175,000 Minefinders Corporation Ltd. 1,577,271 1,897,000375,000 Mineral Deposits Limited 353,550 356,250175,000 Orsu Metal Corporation Warrants $1.20 Apr. 11, 2010* – 875565,000 Perseus Mining Limited, Subscription Receipts* 824,900 939,00757,500 Potash Corporation of Saskatchewan Inc. 6,796,969 6,561,324

120,000 Red Back Mining Inc. 1,158,279 1,785,6001,000,000 Romarco Minerals, Inc. 890,400 1,680,000

90,000 Silver Standard Resources Inc. 2,306,292 2,062,800100,000 Sino-Forest Corporation 1,400,556 1,932,000


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Materials (cont’d)

85,000 Teck Resources Limited, Class B 1,332,496 3,119,500200,000 Thompson Creek Metals Company, Inc. 2,576,186 2,460,000

52,082,688 61,296,651



27,500 BHP Billiton Limited ADR 1,533,487 2,210,9171,000,000 CGA Mining Limited 1,735,000 2,050,0001,125,000 Mineral Deposits Limited 744,282 1,031,559

335,000 Perseus Mining Limited 589,561 552,546

4,602,330 5,845,022

Brazil – 1.6%102,000 Vale SA ADR 2,770,185 3,107,725

United Kingdom – 2.8%125,000 Anglo American PLC ADR 2,902,460 2,846,19011,000 Rio Tinto PLC ADR 2,058,611 2,488,358

4,961,071 5,334,548

United States – 15.9%38,500 Air Products and Chemicals, Inc. 2,865,017 3,275,219

115,000 Alcoa Inc. 3,682,509 1,946,962175,000 Allied Nevada Gold Corporation 1,638,409 2,768,50030,000 Ball Corporation 1,622,010 1,628,945

450,000 Gran Tierra Energy, Inc. 1,641,923 2,700,00022,500 Monsanto Company 2,011,607 1,931,81250,000 Nucor Corporation 3,154,685 2,449,71935,000 Occidental Petroleum Corporation 2,402,482 2,987,39745,000 Peabody Energy Corporation 2,028,163 2,132,91060,000 Southwestern Energy Company 2,569,902 3,037,33720,000 Transocean Ltd. 2,246,884 1,737,96175,000 XTO Energy, Inc. 3,536,310 3,661,976

29,399,901 30,258,738


TOTAL EQUITIES 155,031,839 180,293,484




Feb. 4, 2010 to Feb. 17, 2010 4,276,436 4,211,229

9,993,505 9,929,862



NET ASSETS – 100.0% 190,570,456



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S T AT E M E N T O F I N V E S T M E N T P O R T F O L I OS U M M A R Y O F I N V E S T M E N T P O R T F O L I O



Canadian EquitiesEnergy 39.0 37.2Materials 32.2 34.0Utilities – 2.6

Foreign Equities 23.4 19.5Money Market Instruments 5.2 6.6




(Level 2) ($)



Equities 174,808,307 5,484,302 – 180,292,609Warrants – 875 – 875Money Market Instruments – 9,929,862 – 9,929,862



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A. Risk managementThe investment objective of the Scotia Resource Fund (the “Fund”) isaggressive long-term capital growth. It invests primarily in equity securities ofCanadian resource based companies, including companies that operate in the oiland gas, gold and precious metals, metals and minerals, and forest productsindustries.


B. Liquidity riskThe Fund’s exposure to liquidity risk arises primarily from daily cashredemption of units. The Fund primarily invests in securities that are traded inactive markets and can be readily disposed. In addition, the Fund aims to retainsufficient cash and cash equivalent positions to maintain liquidity, and has theability to borrow up to 5% of its Net Asset Value for the purpose of fundingredemptions. The Fund may, from time to time, enter into over-the-counterderivative contracts or invest in securities that are not traded in an activemarket and may be illiquid. Illiquid securities are identified in the Statement ofInvestment Portfolio.


CurrencyFinancial




U.S. Dollar 39,661,796 – 39,661,796 20.8Australian Dollar 1,584,104 – 1,584,104 0.8

Total 41,245,900 – 41,245,900 21.6

December 31, 2008

CurrencyFinancial




U.S. Dollar 15,606,498 – 15,606,498 21.0Australian Dollar 1,059,263 – 1,059,263 1.4

Total 16,665,761 – 16,665,761 22.4







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturns of its benchmark stock indices of, 65% S&P/TSX Energy Index and 35%S&P/TSX Material Index, as of December 31, 2009, with all other variables heldconstant, would result in an increase or decrease of approximately $38,495,232,20.2% of the Fund’s Net Assets (December 31, 2008-$7,160,568, 9.6% of theFund’s Net Assets). The Fund’s historical sensitivity measure may not berepresentative of its future sensitivity measure, and accordingly, the impact onNet Assets could be materially different.


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Scotia North American Equity Fund(formerly, Scotia Cassels North American Equity Fund)


2009 2008ASSETSInvestments at fair value $389,569,348 $259,580,122Cash 199,301 193,376Accrued investment income 570,942 551,980Receivable for securities sold 5,002,404 –Receivable for currency forward contracts 853,875 –

396,195,870 260,325,478

LIABILITIESDistributions payable – 748Accrued expenses 23,992 34,806

23,992 35,554

Net Assets $396,171,878 $260,289,924





2009 2008INVESTMENT INCOMEDividends $ 8,702,637 $ 8,823,692Interest 314,810 1,957,213Capital gains distributions received – 7,175Securities lending 23,139 206,141Foreign withholding taxes/Tax reclaims (475,200) (455,454)

8,565,386 10,538,767



458,464 526,088


Net realized gain (loss) on investments sold (28,846,592) (41,740,303)Net realized gain (loss) on currency forwards 3,024,986 –Net realized gain (loss) on foreign exchange (109,221) 1,244,466Transaction costs (619,840) (925,257)Change in unrealized appreciation (depreciation) of investments 80,625,693 (97,040,687)Change in unrealized appreciation (depreciation) of currency forwards 853,875 –


Increase (decrease) in Net Assets from operations $ 63,035,823 $(128,449,102)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* $ 63,035,823 $(128,449,102)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITManager Class Units* $ 1.56 $ (3.37)


2009 2008NET ASSETS – BEGINNING OF PERIODManager Class Units* $ 260,289,924 $ 424,143,598





Manager Class Units* 183,429,198 147,668,456Reinvested distributions



80,900,922 (25,241,475)

INCREASE (DECREASE) IN NET ASSETSManager Class Units* 135,881,954 (163,853,674)

NET ASSETS – END OF PERIODManager Class Units* $ 396,171,878 $ 260,289,924



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AverageCost ($)

FairValue ($)


163,580 Canadian Natural Resources Limited 10,455,989 12,378,099317,940 Canadian Oil Sands Trust 11,837,011 9,468,253405,450 EnCana Corporation 12,610,646 13,805,573281,900 Nexen Inc. 6,144,851 7,086,966471,100 Suncor Energy, Inc. 21,271,900 17,482,521339,970 TransCanada Corporation 11,354,975 12,289,916

73,675,372 72,511,328

Materials – 11.1%158,770 Agnico-Eagle Mines Limited 11,130,088 9,016,548321,950 Barrick Gold Corporation 13,163,515 13,328,730

92,300 Potash Corporation of Saskatchewan Inc. 12,489,483 10,532,353300,330 Teck Resources Limited, Class B 9,440,462 11,022,111

46,223,548 43,899,742

Industrials – 5.0%181,210 Canadian National Railway Company 8,394,481 10,356,152177,000 SNC-Lavalin Group Inc. 6,845,869 9,543,840

15,240,350 19,899,992

Consumer Discretionary – 5.0%250,280 Shaw Communications, Inc., Class B 5,118,768 5,406,048156,970 Shoppers Drug Mart Corporation 7,062,034 7,124,868218,440 Thomson Reuters Corporation 7,677,330 7,405,116

19,858,132 19,936,032


Financials – 16.4%168,390 Intact Financial Corporation 5,268,118 6,210,223551,590 Royal Bank of Canada 23,233,388 31,087,611419,850 Toronto-Dominion Bank, The 23,593,294 27,684,909

52,094,800 64,982,743



AverageCost ($)

FairValue ($)

EQUITIES (cont’d)CANADIAN EQUITIES (cont’d)Telecommunication Services – 4.2%

220,650 BCE Inc. 6,250,726 6,387,818315,940 Rogers Communications, Inc., Class B 10,609,015 10,287,006

16,859,741 16,674,824



84,090 3M Company 6,507,924 7,294,01268,480 Becton, Dickinson and Company 5,800,874 5,671,725

293,310 Cisco Systems, Inc. 8,389,852 7,374,722183,820 CVS Caremark Corporation 6,991,196 6,216,462

64,070 Exxon Mobil Corporation 5,689,701 4,583,782470,510 General Electric Company 6,774,557 7,476,570

48,060 International Business Machines Corporation 5,623,299 6,603,676185,200 Johnson & Johnson 13,074,087 12,512,646236,260 JPMorgan Chase & Co. 10,244,124 10,339,709

98,520 McDonald’s Corporation 5,923,896 6,456,59684,290 MetLife, Inc. 4,700,001 3,129,393

258,290 Microsoft Corporation 7,165,316 8,271,031121,950 Occidental Petroleum Corporation 8,998,352 10,408,944177,600 Oracle Corporation 4,408,761 4,577,329128,760 PepsiCo, Inc. 8,575,228 8,217,975112,930 Praxair, Inc. 8,865,881 9,525,189220,240 Staples, Inc. 4,962,038 5,687,866211,640 Wells Fargo & Company 6,087,387 5,988,113


TOTAL EQUITIES 372,307,548 386,895,151




Currency Forward Contracts – 0.2% 853,875OTHER ASSETS, LESS LIABILITIES – 1.4% 5,748,655

NET ASSETS – 100.0% 396,171,878





December 31, 2009 ($)


(Depreciation)Jan. 6, 2010 Canadian Dollar 37,000,000 U.S. Dollar 34,807,150 36,560,980 439,020Jan. 6, 2010 Canadian Dollar 34,200,000 U.S. Dollar 32,164,471 33,785,145 414,855

853,875



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Canadian EquitiesEnergy 18.3 10.9Materials 11.1 6.6Industrials 5.0 6.6Consumer Discretionary 5.0 7.7Consumer Staples 1.4 –Financials 16.4 21.5Index Units – 1.1Information Technology 3.3 1.6Telecommunication Services 4.2 1.0Utilities – 4.2

Foreign Equities 33.0 36.5Money Market Instruments 0.7 2.0Currency Forward Contracts 0.2 –




(Level 2) ($)



Equities 386,895,151 – – 386,895,151Money Market Instruments – 2,674,197 – 2,674,197Currency Forward Contracts – 853,875 – 853,875



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A. Risk managementThe investment objective of the Scotia North American Equity Fund (the“Fund”) is to earn dividend income while providing long-term capital appreci-ation. It invests primarily in companies located in Canada and the UnitedStates.




CurrencyFinancial




U.S. Dollar 130,342,111 (70,346,125) 59,995,986 15.1

Total 130,342,111 (70,346,125) 59,995,986 15.1

December 31, 2008

CurrencyFinancial




U.S. Dollar 96,743,644 – 96,743,644 37.2

Total 96,743,644 – 96,743,644 37.2







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark stock indices of, 60% S&P/TSX CompositeIndex and 40% S&P 500 Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $80,819,063, 20.4% of the Fund’s Net Assets (December 31, 2008-$22,631,304, 8.7% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia Cyclical Opportunities Fund(formerly, Scotia Cassels Cyclical Opportunities Fund)


2009 2008ASSETSInvestments at fair value $82,592,045 $59,982,558Cash 113,193 106,713Accrued investment income 67,780 35,037Receivable for currency forward contracts 526 –

82,773,544 60,124,308

LIABILITIESPayable for securities purchased – 7,537,076Accrued expenses 9,428 5,269

9,428 7,542,345

Net Assets $82,764,116 $52,581,963





2009 2008**INVESTMENT INCOMEDividends $ 1,575,567 $ 36,505Interest 89,632 2,560Foreign withholding taxes/Tax reclaims (93,318) (1,468)

1,571,881 37,597

EXPENSESManagement fees (note 4) 73,784 2,509Audit fees 23,816 1,000Custodian fees 8,505 –Filing fees 14,277 1,861Legal fees 4,759 –Unitholder reporting costs 7,612 –Unitholder administration, service fees and GST 43,164 177

175,917 5,547Absorbed expenses – (277)

175,917 5,270

Net investment income (loss) 1,395,964 32,327

Net realized gain (loss) on investments sold 8,332,600 524,353Net realized gain (loss) on currency forwards 589,845 (138,943)Net realized gain (loss) on foreign exchange 182,160 277,882Transaction costs (1,197,443) (185,881)Change in unrealized appreciation (depreciation) of investments 1,586,655 1,754,481Change in unrealized appreciation (depreciation) of currency forwards 526 –

Net gain (loss) on investments and transaction costs 9,494,343 2,231,892


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* $10,890,307 $2,264,219

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITManager Class Units* $ 1.61 $ 0.52


2009 2008**NET ASSETS – BEGINNING OF PERIODManager Class Units* $ 52,581,963 $ –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* 10,890,307 2,264,219


Manager Class Units* (1,341,387) –From realized gain

Manager Class Units* (6,495,566) (136,503)

(7,836,953) (136,503)



Manager Class Units* 7,830,233 136,503Payments on redemption

Manager Class Units* (23,352,259) (303,200)

27,128,799 50,454,247

INCREASE (DECREASE) IN NET ASSETSManager Class Units* 30,182,153 52,581,963

NET ASSETS – END OF PERIODManager Class Units* $ 82,764,116 $52,581,963

* Scotia Private Client Units renamed Manager Class Units effective December 11, 2009.** For the period since Fund start date December 11, 2008.


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AverageCost ($)

FairValue ($)


80,000 Bankers Petroleum Ltd. 404,760 496,80020,000 Canadian Natural Resources Limited 1,404,717 1,513,400

(300) Canadian Natural Resources Limited, Written Put Options $65.00Jan. 15, 2010 (29,310) (3,151)

80,000 Crew Energy Inc. 749,776 1,167,20050,000 Husky Energy Inc. 1,430,333 1,501,000

100,000 Pacific Rubiales Energy Corp. 1,495,400 1,540,000100,000 Paladin Energy Limited 387,465 391,00050,000 Pan Orient Energy Corporation 285,000 378,00025,000 Petrobank Energy and Resources Ltd. 1,208,415 1,275,75080,000 Suncor Energy, Inc. 2,582,002 2,968,801

(200) Suncor Energy, Inc., Written Put Options $32.00 Jan. 15, 2010 (13,434) (1,050)

9,905,124 11,227,750

Materials – 16.3%10,000 Agnico-Eagle Mines Limited 624,835 567,900

(100) Agnico-Eagle Mines Limited, Written Call Options $55.00Jan. 15, 2010 (17,512) (15,754)

(100) Agnico-Eagle Mines Limited, Written Put Options $55.00Jan. 15, 2010 (26,003) (24,156)

100,000 Centerra Gold Inc. 1,025,000 1,068,000(100) Centerra Gold Inc. Written Call Options $11.00 Jan. 15, 2010 (6,000) (3,000)

80,000 Colossus Minerals Inc. 445,186 460,80060,000 Detour Gold Corporation 921,921 1,068,600

(300) Detour Gold Corporation, Written Call Options $17.00 Jan. 15, 2010 (20,400) (37,500)20,000 First Quantum Minerals Ltd. 1,592,443 1,605,00020,000 Goldcorp, Inc. 890,560 826,200

(100) Goldcorp, Inc., Written Call Options $42.00 Jan. 15, 2010 (4,768) (4,411)45,000 Hathor Exploration Limited 79,761 80,10050,000 HudBay Minerals, Inc. 756,312 676,000

(250) HudBay Minerals, Inc., Written Call Options $15.00 Jan. 15, 2010 (12,250) (5,000)(250) HudBay Minerals, Inc., Written Put Options $12.00 Jan. 15, 2010 (8,500) (500)

20,000 Inmet Mining Corporation 1,249,782 1,271,20020,000 Potash Corporation of Saskatchewan Inc. 2,366,884 2,282,201

(100) Potash Corporation of Saskatchewan Inc., Written Call Options$115.00 Jan. 15, 2010 (24,306) (15,229)

(50) Potash Corporation of Saskatchewan Inc., Written Put Options$105.00 Jan. 15, 2010 (23,883) (10,660)

150,000 San Gold Corporation 554,560 546,00050,000 Sino-Forest Corporation 888,805 966,00040,000 Teck Resources Limited, Class B 1,005,867 1,468,00050,000 Ventana Gold Corporation 496,170 402,500

100,000 Western Coal Corporation 256,478 325,000

13,010,942 13,497,291

Industrials – 1.6%25,000 SNC-Lavalin Group Inc. 1,090,704 1,348,000

Consumer Discretionary – 3.8%10,000 George Weston Limited 617,807 668,20052,330 Shaw Communications, Inc., Class B 1,009,896 1,130,32840,000 Thomson Reuters Corporation 1,360,380 1,356,000

2,988,083 3,154,528

Consumer Staples – 0.6%20,000 Gildan Activewear Inc. 522,520 511,400

Financials – 13.7%15,000 Bank of Montreal 803,433 836,85020,000 Canadian Western Bank 457,610 438,000

100,000 Manulife Financial Corporation 2,007,808 1,930,000


AverageCost ($)

FairValue ($)


(1,000) Manulife Financial Corporation, Written Call Options $19.00Apr. 16, 2010 (125,000) (139,000)

15,000 National Bank of Canada 905,693 902,40060,000 Royal Bank of Canada 2,702,873 3,381,60020,000 TMX Group Inc. 624,574 662,20050,000 Toronto-Dominion Bank, The 3,247,215 3,297,000

10,624,206 11,309,050


(200) Research In Motion Limited, Written Put Options $66.63Jan. 15, 2010 (33,432) (30,247)

(150) Research In Motion Limited, Written Put Options $70.00Jan. 15, 2010 (46,838) (53,563)

3,174,875 3,109,390

Telecommunication Services – 3.9%70,000 Rogers Communications, Inc., Class B 2,138,859 2,279,200

(300) Rogers Communications, Inc., Class B, Written Call Options $30.00Jan. 15, 2010 (17,144) (47,261)

30,000 TELUS Corporation 1,025,190 1,021,200(300) TELUS Corporation, Written Call Options $34.00 Jan. 15, 2010 (8,400) (15,000)

3,138,505 3,238,139



13,430 3M Company 1,003,154 1,164,92579,010 Applied Materials, Inc. 1,164,365 1,150,11128,630 Bed Bath & Beyond Inc. 1,195,196 1,161,55730,970 Constellation Energy Group Inc. 1,160,149 1,142,00132,370 DIRECTV Group Inc., The 1,152,035 1,133,45111,550 EOG Resources, Inc. 1,188,789 1,180,292

113,080 Ford Motor Company 1,066,985 1,185,25334,140 Forest Laboratories, Inc. 1,163,423 1,150,96813,800 Freeport-McMoRan Copper & Gold Inc., Class B 1,184,612 1,163,684

1,830 Google Inc. 1,146,706 1,191,581275,000 Gran Tierra Energy, Inc. 1,510,081 1,650,00021,030 Hewlett-Packard Company 1,165,020 1,136,81012,820 L-3 Communications Holdings, Inc. 1,144,479 1,170,71829,010 Merck & Co., Inc. 1,065,271 1,112,07835,830 Microsoft Corporation 923,162 1,147,35819,450 Northrop Grumman Corporation 1,119,421 1,139,85244,760 Oracle Corporation 1,142,030 1,153,61158,760 Pfizer Inc. 1,154,370 1,122,55921,600 Prudential Financial, Inc. 1,177,465 1,128,60424,080 QUALCOMM Incorporated 1,166,218 1,169,92220,550 Reynolds American Inc. 1,159,094 1,143,23733,120 Verizon Communications Inc. 1,122,983 1,152,40833,750 Walt Disney Company, The 1,153,923 1,143,13718,220 WellPoint Inc. 1,163,247 1,113,69440,000 Wells Fargo & Company 1,174,078 1,131,75450,230 Xcel Energy, Inc. 1,134,750 1,119,446

29,901,006 30,359,011

TOTAL EQUITIES 74,355,965 77,754,559


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AverageCost ($)

FairValue ($)



3,650,000(U.S.)

Export Development Canada Commercial Paper0.05% to 0.08% due fromFeb. 17, 2010 to Apr. 20, 2010 3,848,906 3,832,709

TOTAL MONEY MARKET INSTRUMENTS 4,853,646 4,837,486


Currency Forward Contracts – 0.0% 526OTHER ASSETS, LESS LIABILITIES – 0.2% 171,545

NET ASSETS – 100.0% 82,764,116





December 31, 2009 ($)


(Depreciation)Jan. 29, 2010 Canadian Dollar 5,255,000 U.S. Dollar 5,000,000 5,254,474 526

526





Canadian EquitiesEnergy 13.6 22.6Materials 16.3 9.7Industrials 1.6 –Consumer Discretionary 3.8 4.1Consumer Staples 0.6 –Financials 13.7 10.7Information Technology 3.8 –Telecommunication Services 3.9 6.7Utilities – 4.1

Foreign Equities 36.7 37.9Currency Forwards – –Money Market Instruments 5.8 18.3




(Level 2) ($)



Equities 78,160,041 – – 78,160,041Options (Written Put) (123,327) – – (123,327)Money Market Instruments – 4,837,486 – 4,837,486Currency Forward Contracts – 526 – 526




(Level 2) ($)






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A. Risk managementThe investment objective of the Scotia Cyclical Opportunities Fund (the“Fund”) is long-term capital growth. It invests primarily in a range of NorthAmerican equity and equity-related securities that are sensitive to broad-basedeconomic fluctuations (business cycles).




CurrencyFinancial




U.S. Dollar 32,346,274 (5,254,474) 27,091,800 32.7

Total 32,346,274 (5,254,474) 27,091,800 32.7

December 31, 2008

CurrencyFinancial




U.S. Dollar 19,918,999 – 19,918,999 37.9

Total 19,918,999 – 19,918,999 37.9







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock indices (December 31, 2008 –10%), using a historical measure of the sensitivity of the Fund’s return relativeto the returns of its benchmark stock indices of, 60% S&P/TSX CompositeIndex and 40% S&P 500 Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $8,607,468, 10.4% of the Fund’s Net Assets. As the Fund’s start datewas December 11, 2008, a historical measure of sensitivity of the Fund’s returnsrelative to the returns of its benchmark stock index are unavailable as ofDecember 31, 2008. The Fund’s historical sensitivity measure may not berepresentative of its future sensitivity measure, and accordingly, the impact onNet Assets could be materially different.


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Scotia U.S. Equity Fund(formerly, Scotia Cassels U.S. Equity Fund)



391,288,117 112,222,571

LIABILITIESPayable for securities purchased 10,267,269 2,155,558Distributions payable – 183Accrued expenses 16,415 18,437

10,283,684 2,174,178

Net Assets $381,004,433 $110,048,393

NET ASSETS PER CLASSClass I Units $ 28,552,830 $ –Manager Class Units* $352,451,603 $110,048,393




2009 2008INVESTMENT INCOMEDividends $ 2,320,359 $ 1,804,770Interest 4,800 83,197Securities lending 1,090 3,574Foreign withholding taxes/Tax reclaims (346,778) (267,384)

1,979,471 1,624,157



208,793 199,755


Net realized gain (loss) on investments sold (14,222,809) (17,487,997)Net realized gain (loss) on currency forwards (2,792,805) –Net realized gain (loss) on foreign exchange 713,681 466,288Transaction costs (1,255,695) (462,534)Change in unrealized appreciation (depreciation) of investments 12,245,384 (7,717,507)

Net gain (loss) on investments and transaction costs (5,312,244) (25,201,750)

Increase (decrease) in Net Assets from operations $ (3,541,566) $(23,777,348)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** $ 1,171,644 $ –Manager Class Units* $ (4,713,210) $(23,777,348)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass I Units** $ 0.78 $ –Manager Class Units* $ (0.33) $ (2.38)


2009 2008NET ASSETS – BEGINNING OF PERIODManager Class Units* $110,048,393 $ 51,781,502

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass I Units** 1,171,644 –Manager Class Units* (4,713,210) (23,777,348)

(3,541,566) (23,777,348)


Class I Units** (361,378) –Manager Class Units* (1,334,819) (1,329,845)

(1,696,197) (1,329,845)



Reinvested distributionsClass I Units** 361,378 –Manager Class Units* 1,120,972 1,309,490

Payments on redemptionClass I Units** (308,470) –Manager Class Units* (55,102,517) (32,963,767)

276,193,803 83,374,084


270,956,040 58,266,891


$381,004,433 $110,048,393




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AverageCost ($)

FairValue ($)


354,660 Chesapeake Energy Corporation 9,776,723 9,632,419157,355 Chevron Corporation 12,702,030 12,718,627145,860 ConocoPhillips 7,983,288 7,815,761138,811 Occidental Petroleum Corporation 11,787,496 11,848,10245,011 Schlumberger Limited 2,982,398 3,077,000

45,231,935 45,091,909

Materials – 2.4%110,770 E.I.duPont de Nemours and Company 3,862,262 3,915,89461,185 Freeport-McMoRan Copper & Gold Inc., Class B 4,546,722 5,159,422

8,408,984 9,075,316

Industrials – 11.8%81,614 3M Company 6,630,293 7,079,24243,280 Boeing Company, The 2,523,936 2,458,662

434,770 General Electric Company 6,870,647 6,908,649135,298 Honeywell International Inc. 5,496,868 5,567,375103,100 Illinois Tool Works Inc. 5,287,356 5,195,33530,810 Lockheed Martin Corporation 2,487,461 2,436,260

113,140 Masco Corporation 1,681,053 1,640,98544,270 Norfolk Southern Corporation 2,487,242 2,435,39666,580 Northrop Grumman Corporation 3,924,349 3,901,86899,120 United Technologies Corporation 7,075,297 7,218,380

44,464,502 44,842,152

Consumer Discretionary – 6.3%19,485 DeVry, Inc. 1,114,238 1,160,93544,750 DIRECTV Group Inc., The 1,321,581 1,566,943

236,550 Ford Motor Company 2,223,430 2,479,40993,214 GameStop Corp. 2,392,350 2,147,89230,389 McDonald’s Corporation 1,937,114 1,991,57034,570 McGraw-Hill Companies, Inc., The 1,243,191 1,216,295

6,195 priceline.com Incorporated 926,675 1,417,66496,470 Staples, Inc. 2,508,208 2,491,41143,136 Time Warner Inc. 1,243,211 1,318,79365,760 TJX Companies Inc., The 2,578,281 2,523,626

172,595 Walt Disney Company, The 5,610,356 5,845,916

23,098,635 24,160,454

Consumer Staples – 9.9%45,175 Coca-Cola Company, The 2,531,645 2,702,95666,936 Colgate-Palmolive Company 5,651,770 5,773,72654,265 CVS Caremark Corporation 1,925,312 1,835,14576,255 Kellogg Company 4,109,191 4,259,83758,280 PepsiCo, Inc. 3,730,960 3,719,661

140,295 Procter & Gamble Company, The 8,935,607 8,929,136102,121 Wal-Mart Stores, Inc. 5,748,461 5,730,531123,017 Walgreen Co. 4,606,894 4,739,026

37,239,840 37,690,018

Health Care – 12.9%111,730 AmerisourceBergen Corporation 3,045,658 3,055,663104,062 Johnson & Johnson 6,978,953 7,030,72945,550 McKesson Corporation 3,014,530 2,989,465

128,890 Medtronic, Inc. 5,906,455 5,949,394198,462 Merck & Co., Inc. 7,684,084 7,607,901516,098 Pfizer Inc. 9,905,137 9,859,605135,740 UnitedHealth Group Incorporated 4,507,003 4,343,851135,680 WellPoint Inc. 8,447,106 8,293,416

49,488,926 49,130,024

Financials – 12.3%46,340 American Express Company 1,915,368 1,970,60048,220 Chubb Corporation, The 2,526,049 2,490,637


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Financials (cont’d)

34,523 Goldman Sachs Group, Inc., The 5,859,876 6,112,36445,470 Hartford Financial Services Group, Inc., The 1,305,993 1,110,783

206,314 JPMorgan Chase & Co. 8,801,413 9,029,14998,580 Lincoln National Corporation 2,565,185 2,575,92966,110 MetLife, Inc. 2,485,962 2,454,43363,320 PNC Financial Services Group, Inc., The 3,542,243 3,510,64766,470 Prudential Financial, Inc. 3,583,466 3,473,06920,427 Simon Property Group, Inc. 1,580,813 1,711,993

100,175 Travelers Companies, Inc., The 5,185,134 5,244,682249,665 Wells Fargo & Company 6,908,660 7,063,987

46,260,162 46,748,273

Information Technology – 23.5%96,900 Accenture Ltd. 4,145,127 4,223,44238,320 Apple Inc. 7,477,057 8,474,14791,210 Applied Materials, Inc. 1,270,647 1,327,701

610,370 Cisco Systems, Inc. 15,225,513 15,346,59222,302 Computer Sciences Corporation 1,154,182 1,347,51314,218 Google Inc. 8,407,992 9,257,864

132,170 Hewlett-Packard Company 7,025,774 7,144,662225,067 Intel Corporation 4,657,637 4,822,10560,892 International Business Machines Corporation 8,091,329 8,366,854

471,874 Microsoft Corporation 14,488,360 15,110,474515,700 Oracle Corporation 12,907,983 13,291,26522,106 Teradata Corporation 574,845 728,779

85,426,446 89,441,398

Telecommunication Services – 3.1%223,502 AT&T Inc. 6,517,320 6,579,595153,230 Verizon Communications Inc. 5,308,935 5,331,628

11,826,255 11,911,223

Utilities – 3.1%75,510 Constellation Energy Group Inc. 2,737,400 2,784,38978,801 Sempra Energy 4,451,887 4,632,967

204,424 Xcel Energy, Inc. 4,616,316 4,555,876

11,805,603 11,973,232

TOTAL EQUITIES 363,251,288 370,063,999


(U.S.) 0.08% to 0.11% due fromFeb. 18, 2010 to Mar. 11, 2010 2,832,164 2,819,533


Feb. 11, 2010 to Jun. 2, 2010 18,000,480 18,048,132

20,832,644 20,867,665



NET ASSETS – 100.0% 381,004,433


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101




Energy 11.8 12.3Materials 2.4 3.8Industrials 11.8 10.0Consumer Discretionary 6.3 8.7Consumer Staples 9.9 11.3Health Care 12.9 16.1Financials 12.3 11.4Information Technology 23.5 14.8Telecommunication Services 3.1 4.3Utilities 3.1 4.0Index Units – 0.8Currency Options – 0.1Money Market Instruments 5.5 4.2




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A. Risk managementThe investment objective of the Scotia U.S. Equity Fund (the “Fund”) is long-term capital growth. It invests primarily in a broad range of U.S. equitysecurities listed on major U.S stock exchanges.




CurrencyFinancial




U.S. Dollar 390,960,933 – 390,960,933 102.6

Total 390,960,933 – 390,960,933 102.6

December 31, 2008

CurrencyFinancial




U.S. Dollar 107,845,593 – 107,845,593 98.0

Total 107,845,593 – 107,845,593 98.0


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $39,096,093, 10.3% of the Fund’s Net Assets (December 31,2008-$10,784,559, 9.8% of the Fund’s Net Assets). In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.





F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, S&P 500 Index, as of December 31, 2009,with all other variables held constant, would result in an increase or decrease ofapproximately $67,056,780, 17.6% of the Fund’s Net Assets (December 31,2008-$10,294,016, 9.4% of the Fund’s Net Assets). The Fund’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.


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Scotia U.S. Growth FundS T AT E M E N T O F N E T A S S E T SAs at December 31


31,021,652 33,674,022


65,509 87,328

Net Assets $30,956,143 $33,586,694





2009 2008INVESTMENT INCOMEDividends $ 639,470 $ 821,182Interest 5,025 24,776Securities lending 95 1,152Foreign withholding taxes/Tax reclaims (95,891) (121,753)

548,699 725,357



802,204 1,076,467

Net investment income (loss) (253,505) (351,110)

Net realized gain (loss) on investments sold (4,658,949) (7,129,405)Net realized gain (loss) on foreign exchange (218,812) 182,354Transaction costs (317,731) (185,548)Change in unrealized appreciation (depreciation) of investments 4,220,376 (5,484,033)

Net gain (loss) on investments and transaction costs (975,116) (12,616,632)

Increase (decrease) in Net Assets from operations $(1,228,621) $(12,967,742)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $(1,228,410) $(12,965,057)Class F Units $ (211) $ (2,685)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ (0.24) $ (2.43)Class F Units $ (0.19) $ (2.38)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $33,579,208 $ 50,428,123Class F Units 7,486 10,171

33,586,694 50,438,294

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units (1,228,410) (12,965,057)Class F Units (211) (2,685)

(1,228,621) (12,967,742)



Class A Units (3,601,199) (6,571,545)

(1,401,930) (3,883,858)

INCREASE (DECREASE) IN NET ASSETSClass A Units (2,630,340) (16,848,915)Class F Units (211) (2,685)

(2,630,551) (16,851,600)


$30,956,143 $ 33,586,694


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As at December 31


AverageCost ($)

FairValue ($)


9,347 Chevron Corporation 717,969 755,4965,700 ConocoPhillips 317,218 305,4293,707 Diamond Offshore Drilling, Inc. 364,664 383,1782,003 EOG Resources, Inc. 161,195 204,686

13,924 Exxon Mobil Corporation 1,052,920 996,1704,531 Occidental Petroleum Corporation 338,722 386,740

2,952,688 3,031,699

Materials – 5.0%11,400 Dow Chemical Company, The 337,912 330,811

9,000 E.I.duPont de Nemours and Company 320,776 318,1644,640 Freeport-McMoRan Copper & Gold Inc., Class B 362,342 391,2684,600 Owens-Illinois, Inc. 159,917 158,8017,300 Peabody Energy Corporation 339,604 346,005

1,520,551 1,545,049

Industrials – 10.1%3,494 3M Company 242,912 303,0714,650 Danaher Corporation 371,911 367,253

15,640 General Electric Company 229,149 248,52511,027 Honeywell International Inc. 412,774 453,750

2,600 L-3 Communications Holdings, Inc. 229,761 237,4315,580 Northrop Grumman Corporation 321,708 327,0124,511 Stericycle, Inc. 262,882 261,3797,520 United Technologies Corporation 502,084 547,6413,715 W.W. Grainger, Inc. 359,395 377,801

2,932,576 3,123,863

Consumer Discretionary – 9.6%27,200 AirTran Holdings, Inc. 155,359 149,119

9,800 Bed Bath & Beyond Inc. 405,085 397,59911,000 DIRECTV Group Inc., The 320,437 385,17046,800 Ford Motor Company 387,321 490,536

7,384 McDonald’s Corporation 467,462 483,9171,250 priceline.com Incorporated 160,740 286,0508,160 TJX Companies Inc., The 320,502 313,151

13,480 Walt Disney Company, The 392,242 456,577

2,609,148 2,962,119

Consumer Staples – 11.3%8,000 Campbell Soup Company 286,925 283,9895,203 Colgate-Palmolive Company 374,930 448,7976,251 Kellogg Company 311,774 349,2006,000 Kimberly-Clark Corporation 412,401 401,4705,200 PepsiCo, Inc. 351,117 331,8853,848 Procter & Gamble Company, The 239,237 244,9086,200 Reynolds American Inc. 349,922 344,918

11,516 Wal-Mart Stores, Inc. 638,523 646,22311,603 Walgreen Co. 404,919 446,986

3,369,748 3,498,376

Health Care – 13.8%4,860 Becton, Dickinson and Company 389,672 402,5205,200 DaVita, Inc. 319,146 320,4719,170 Eli Lilly and Company 358,558 343,5329,900 Forest Laboratories, Inc. 307,550 333,7608,816 Johnson & Johnson 580,022 595,6344,500 McKesson Corporation 288,578 295,337


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Health Care (cont’d)

16,129 Merck & Co., Inc. 574,494 618,29433,927 Pfizer Inc. 598,753 648,146

5,821 Stryker Corporation 265,705 307,9396,900 WellPoint Inc. 385,663 421,761

4,068,141 4,287,394

Financials – 12.0%10,000 American Express Company 395,304 425,24813,800 Bank of America Corporation 236,809 218,272

4,590 Chubb Corporation, The 245,504 237,08143,690 Citigroup Inc. 145,990 151,881

3,105 Goldman Sachs Group, Inc., The 485,194 549,74611,160 JPMorgan Chase & Co. 432,271 488,408

5,800 Prudential Financial, Inc. 315,656 303,0512,531 Simon Property Group, Inc. 195,530 212,1246,810 Travelers Companies, Inc., The 357,755 356,5398,000 Unum Group 161,439 163,924

21,197 Wells Fargo & Company 564,672 599,745

3,536,124 3,706,019

Information Technology – 19.6%3,573 Apple Inc. 679,740 790,139

22,150 Applied Materials, Inc. 308,935 322,4275,415 Computer Sciences Corporation 273,860 327,1811,234 Google Inc. 626,861 803,503

11,480 Hewlett-Packard Company 576,150 620,5709,246 Intel Corporation 175,227 198,0972,197 International Business Machines Corporation 272,783 301,878

32,805 Microsoft Corporation 908,580 1,050,49024,780 Oracle Corporation 593,321 638,66110,100 QUALCOMM Incorporated 479,334 490,706

5,393 Teradata Corporation 133,914 177,7947,750 Western Digital Corporation 316,934 359,358

5,345,639 6,080,804

Telecommunication Services – 4.3%26,070 AT&T Inc. 750,535 767,46515,990 Verizon Communications Inc. 535,718 556,371

1,286,253 1,323,836

Utilities – 3.3%6,800 Constellation Energy Group Inc. 231,633 250,7466,505 Sempra Energy 324,667 382,450

17,492 Xcel Energy, Inc. 396,597 389,834

952,897 1,023,030

TOTAL EQUITIES 28,573,765 30,582,189

MONEY MARKET INSTRUMENTS – 1.0%305,000 Export Development Canada Commercial Paper

(U.S.) 0.07% due Apr. 1, 2010 322,544 320,271



NET ASSETS – 100.0% 30,956,143


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Energy 9.8 12.5Materials 5.0 3.7Industrials 10.1 9.8Consumer Discretionary 9.6 8.6Consumer Staples 11.3 12.1Health Care 13.8 15.3Financials 12.0 11.2Information Technology 19.6 14.8Telecommunication Services 4.3 4.5Utilities 3.3 4.0Index Units – 1.3Currency Options – 0.1Money Market Instruments 1.0 1.7




(Level 2) ($)



Equities 30,582,189 – – 30,582,189Money Market Instruments – 320,271 – 320,271

Total Investments 30,582,189 320,271 – 30,902,460


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D I S C U S S I O N O F F I N A N C I A L I N S T R U M E N T R I S KAs at December 31

A. Risk managementThe investment objective of the Scotia U.S. Growth Fund (the “Fund”) is long-term capital growth. It invests primarily in a broad range of U.S. equitysecurities.




CurrencyFinancial




U.S. Dollar 30,954,161 – 30,954,161 100.0

Total 30,954,161 – 30,954,161 100.0

December 31, 2008

CurrencyFinancial




U.S. Dollar 33,565,562 – 33,565,562 99.9

Total 33,565,562 – 33,565,562 99.9


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased , respectively byapproximately $3,095,416, 10.0% of the Fund’s Net Assets (December 31, 2008-$3,356,556, 10.0% of the Fund’s Net Assets). In practice, actual results maydiffer from this sensitivity analysis and the difference could be material.





F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, S&P 500 Index, as of December 31, 2009,with all other variables held constant, would result in an increase or decrease ofapproximately $5,572,106, 18.0% of the Fund’s Net Assets (December 31, 2008-$3,187,177, 9.5% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia U.S. Value FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $77,874,710 $87,777,284Cash 3,165,076 1,646,395Accrued investment income 91,078 127,603Subscriptions receivable 6,556 1,908

81,137,420 89,553,190

LIABILITIESPayable for securities purchased 98,866 –Redemptions payable 12,532 10,959Accrued expenses 22,328 43,537

133,726 54,496

Net Assets $81,003,694 $89,498,694

NET ASSETS PER CLASSClass A Units $16,745,434 $16,369,477Class I Units $64,258,260 $73,129,217

UNITS OUTSTANDINGClass A Units 2,615,125 2,777,464Class I Units 9,484,145 11,922,860



2009 2008INVESTMENT INCOMEDividends $ 1,980,182 $ 2,298,291Interest 1,527 54,413Foreign withholding taxes/Tax reclaims (276,993) (316,299)

1,704,716 2,036,405



458,628 552,305


Net realized gain (loss) on investments sold (9,770,588) (12,079,720)Net realized gain (loss) on foreign exchange (1,502,049) 457,894Transaction costs (94,210) (105,973)Change in unrealized appreciation (depreciation) of investments 18,921,539 (15,620,853)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 1,342,136 $ (5,466,540)Class I Units $ 7,458,644 $(20,398,012)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.50 $ (1.91)Class I Units $ 0.65 $ (1.81)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 16,369,477 $ 23,594,827Class I Units 73,129,217 77,005,178

89,498,694 100,600,005

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 1,342,136 (5,466,540)Class I Units 7,458,644 (20,398,012)

8,800,780 (25,864,552)




(17,295,780) 14,763,241

INCREASE (DECREASE) IN NET ASSETSClass A Units 375,957 (7,225,350)Class I Units (8,870,957) (3,875,961)

(8,495,000) (11,101,311)


$ 81,003,694 $ 89,498,694


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AverageCost ($)

FairValue ($)


42,100 Baker Hughes Incorporated 1,523,956 1,788,08438,900 ConocoPhillips 3,063,457 2,084,417

4,587,413 3,872,501

Materials – 2.7%26,200 Air Products and Chemicals, Inc. 2,255,207 2,228,851

Industrials – 9.4%33,800 Boeing Company, The 3,280,602 1,920,12036,400 Deere & Company 2,234,908 2,065,14539,000 Northrop Grumman Corporation 2,978,748 2,285,56423,760 SPX Corp. 1,361,051 1,364,987

9,855,309 7,635,816

Consumer Discretionary – 9.0%75,000 Gentex Corporation 1,149,364 1,400,51569,000 Home Depot Inc., The 1,834,587 2,094,31341,300 J.C. Penney Company, Inc. 1,082,991 1,152,92124,000 Polo Ralph Lauren Corporation 1,271,539 2,041,19197,000 Warner Music Group Corp. 1,801,232 573,555

7,139,713 7,262,495

Consumer Staples – 16.0%96,000 ConAgra Foods, Inc. 2,241,856 2,324,00422,300 Diageo PLC ADR 1,945,415 1,624,45836,200 Estee Lauder Companies Inc., The 1,855,962 1,838,60945,000 Hershey Company, The 1,898,308 1,691,01541,800 Kellogg Company 2,386,736 2,335,07466,500 Safeway Inc. 2,037,079 1,486,93557,000 Sysco Corporation 1,517,472 1,670,819

13,882,828 12,970,914

Health Care – 7.3%38,000 Baxter International Inc. 2,339,273 2,341,90044,700 Eli Lilly and Company 2,527,753 1,674,57835,600 Hospira, Inc. 1,621,874 1,906,842

6,488,900 5,923,320

Financials – 14.8%30,500 Aflac Incorporated 1,724,591 1,481,51671,780 Banco Santander SA ADR 1,130,009 1,239,36774,280 Bank of America Corporation 2,013,218 1,174,87540,720 Bank of America Corporation 10.00%, Preferred 656,325 637,64759,030 Charles Schwab Corporation, The 1,258,781 1,166,77552,500 JPMorgan Chase & Co. 2,965,656 2,297,61624,000 M&T Bank Corporation 1,286,858 1,686,037

288,000 Mitsubishi UFJ Financial Group, Inc. ADR 2,843,447 1,485,14462,000 Zions Bancorporation 2,635,572 831,529

16,514,457 12,000,506

Information Technology – 24.9%58,000 Adobe Systems Inc. 1,503,173 2,240,44515,200 Apple Inc. 1,658,537 3,361,353

133,000 EMC Corporation 1,856,628 2,437,48421,600 International Business Machines Corporation 2,332,897 2,967,94351,000 Intuit Inc. 1,603,022 1,644,91965,000 Molex Incorporated 1,863,176 1,301,843

107,000 Oracle Corporation 2,249,171 2,757,737


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Information Technology (cont’d)

68,000 Texas Instruments Incorporated 2,270,207 1,858,99367,000 Vodafone Group PLC ADR 1,919,839 1,604,369

17,256,650 20,175,086

Utilities – 7.2%59,500 Dominion Resources, Inc. 2,883,923 2,432,11736,300 FPL Group, Inc. 1,940,896 2,012,57931,200 Questar Corporation 1,293,922 1,360,525

6,118,741 5,805,221


OTHER ASSETS, LESS LIABILITIES - 3.9% 3,128,984

NET ASSETS - 100.0% 81,003,694




Energy 4.8 5.6Materials 2.7 2.3Industrials 9.4 9.0Consumer Discretionary 9.0 11.8Consumer Staples 16.0 18.4Health Care 7.3 10.3Financials 14.8 16.6Information Technology 24.9 17.5Utilities 7.2 6.6




(Level 2) ($)



Equities 77,874,710 – – 77,874,710



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A. Risk managementThe investment objective of the Scotia U.S. Value Fund (the “Fund”) is toachieve long-term capital growth. It invests primarily in equity securities of U.S.companies.




CurrencyFinancial




U.S. Dollar 80,958,893 – 80,958,893 99.9

Total 80,958,893 – 80,958,893 99.9

December 31, 2008

CurrencyFinancial




U.S. Dollar 89,349,856 – 89,349,856 99.8

Total 89,349,856 – 89,349,856 99.8





Where the Fund invests in debt instruments this represents the mainconcentration of credit risk. The market value of debt instruments includesconsideration of the creditworthiness of the issuer, and accordingly, representsthe maximum credit risk exposure to the Fund. Credit risk may also exist inrelation to counter parties of currency forward contracts.









Unrated 100.0 0.8 – –

Total 100.0 0.8 – –




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Scotia International Equity Fund(formerly, Scotia Cassels International Equity Fund)


2009 2008ASSETSInvestments at fair value $109,609,809 $145,693,648Cash 1,169,689 –Accrued investment income 74,501 263,450Receivable for securities sold 419,287 16,781,980Subscriptions receivable 393,797 162,338Receivable for currency forward contracts 15,652 –

111,682,735 162,901,416

LIABILITIESBank indebtedness – 17,209,814Payable for securities purchased 322,614 –Redemptions payable 49,516 301,077Accrued expenses 19,981 65,934

392,111 17,576,825

Net Assets $111,290,624 $145,324,591





2009 2008INVESTMENT INCOMEDividends $ 3,464,401 $ 14,145,972Interest/Overdraft Charges (30,764) 290,696Securities lending 4,703 191,109Foreign withholding taxes/Tax reclaims (190,437) (2,071,041)

3,247,903 12,556,736

EXPENSESManagement fees (note 4) 309,286 1,094,492Audit fees 19,622 19,166Custodian fees 124,221 130,052Filing fees 16,166 16,507Legal fees 4,759 5,781Unitholder reporting costs 7,612 8,119Unitholder administration, service fees and GST 60,517 102,938

542,183 1,377,055Absorbed expenses (210) (17,080)

541,973 1,359,975


Net realized gain (loss) on investments sold (60,449,016) (94,138,499)Net realized gain (loss) on currency forwards (260,622) (909,675)Net realized gain (loss) on foreign exchange 28,234 (640,434)Transaction costs (181,839) (431,946)Change in unrealized appreciation (depreciation) of investments 66,111,602 (79,430,314)Change in unrealized appreciation (depreciation) of currency forwards 15,652 (320,701)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSManager Class Units* $ 7,969,941 $(164,674,808)


Manager Class Units* $ 0.57 $ (4.70)


2009 2008NET ASSETS – BEGINNING OF PERIODManager Class Units* $145,324,591 $ 472,462,669








(39,023,668) (151,222,654)

INCREASE (DECREASE) IN NET ASSETSManager Class Units* (34,033,967) (327,138,078)

NET ASSETS – END OF PERIODManager Class Units* $111,290,624 $ 145,324,591



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Scotia International Equity Fund (Continued)(formerly, Scotia Cassels International Equity Fund)



AverageCost ($)

FairValue ($)


28,300 Australia and New Zealand Banking Group Limited 296,616 604,68525,600 Bendigo and Adelaide Bank Limited 226,280 235,694

3,900 BHP Billiton Limited 103,540 156,84234,700 Challenger Financial Services Group Limited 144,435 136,77724,400 Lend Lease Corporation Limited 210,153 233,50327,600 Macquarie Group Limited 1,033,276 1,240,959

154,539 Macquarie Infrastructure Group 482,211 193,40326,808 National Australia Bank Limited 932,771 685,065

104,825 Qantas Airways Limited 335,277 292,58413,479 QBE Insurance Group Limited 292,304 323,093

129,800 Telstra Corporation Limited 355,512 417,74612,300 Westpac Banking Corporation 267,970 290,759

9,400 WorleyParsons Limited 262,670 255,724

4,943,015 5,066,834

Austria – 0.1%3,500 OMV AG 166,195 160,748

Belgium – 1.0%20,616 Anheuser-Busch InBev NV 797,361 1,117,070

Brazil – 3.0%12,000 Banco do Brasil SA 104,355 213,30347,070 Itau Unibanco Holding SA ADR 624,426 1,127,62314,700 Petroleo Brasileiro SA ADR 553,134 735,50241,300 Vale SA ADR 772,489 1,258,324

2,054,404 3,334,752

China – 1.3%166,000 China Coal Energy Company, Class H 297,236 316,133

1,314,000 Industrial and Commercial Bank of China Ltd, Class H 931,548 1,132,485

1,228,784 1,448,618

Denmark – 1.6%3,475 Carlsberg A/S Series B 279,208 268,938

19,500 Danske Bank AS 541,536 465,6288,790 Novo Nordisk AS, Class B 567,651 589,8126,558 Vestas Wind Systems AS 517,443 420,817

1,905,838 1,745,195

Finland – 0.8%67,600 Nokia Oyj 1,437,465 910,177

France – 9.4%17,912 BNP Paribas 1,677,795 1,482,461

4,100 Casino Guichard-Perrachon SA 318,939 385,3699,800 Compagnie de Saint-Gobain 568,581 551,705

30,962 Credit Agricole SA 1,073,133 566,1157,900 Electricite de France SA 468,843 493,027

26,500 France Telecom SA 744,030 693,9156,200 Klepierre 279,315 264,5174,581 L’Oreal SA 443,925 533,4189,700 Lagardere SCA 863,349 410,497

27,459 Sanofi-Aventis 2,327,419 2,257,43025,120 SES Global SA FDR 593,365 590,754

9,800 Societe Generale 1,524,666 711,1682,400 Unibail-Rodamco 550,798 554,1071,278 Vallourec SA 382,091 243,790

24,040 Vivendi 756,619 744,325

12,572,868 10,482,598

Germany – 9.1%6,800 Allianz SE 1,579,098 892,5997,200 BASF SE 418,988 471,396

19,751 Bayer AG 1,414,198 1,662,42018,643 Bayerische Motoren Werke AG 900,953 894,479

3,900 Celesio AG 101,193 104,509


AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)Germany (cont’d)

12,000 Deutsche Bank AG 1,338,544 889,92831,090 Deutsche Post AG 467,232 627,39437,000 Deutsche Telekom AG 599,310 575,89820,700 E.ON AG 1,163,631 902,616

6,800 Fresenius Medical Care AG & Co. KGaA 387,544 377,6131,873 MAN SE 123,155 152,7956,100 METRO AG 354,106 392,9772,350 Muenchener Rueckversicherungs-Gesellschaft AG 415,119 384,9147,900 SAP AG 390,472 391,720

10,300 Siemens AG 1,032,510 993,3064,000 Volkswagen AG Non-voting 396,513 390,563

11,082,566 10,105,127

Hong Kong – 3.9%410,000 CNOOC Limited 578,130 670,35981,200 Dah Sing Banking Group Limited 135,485 126,55373,163 Esprit Holdings Limited 512,229 505,69931,000 Hong Kong Exchanges & Clearing Limited 516,781 579,58468,000 HSBC Holdings PLC -Ord 814,466 813,00338,000 Li & Fung Limited 120,552 164,240

145,000 New World Development Company Limited 153,587 310,797226,000 PetroChina Company Limited, Class H 270,979 282,77422,000 Sun Hung Kai Properties Limited 321,953 342,83619,600 Tencent Holdings Limited 187,346 443,63740,500 Yue Yuen Industrial (Holdings) Limited 101,496 122,842

3,713,004 4,362,324

Hungary – 0.2%6,000 OTP Bank PLC 170,445 178,018

Ireland – 0.4%14,600 CRH PLC 452,353 414,774

Israel – 1.7%83,200 Bezeq Israeli Telecommunication Corporation Ltd. 160,410 219,95715,100 Israel Chemicals Limited 182,576 207,00924,300 Teva Pharmaceutical Industries Ltd. ADR 1,119,987 1,433,780

1,462,973 1,860,746

Italy – 4.7%29,800 Banca Popolare di Milano Scarl 195,970 221,71650,400 Enel SpA 292,568 306,94732,000 Eni SpA 1,143,668 854,43739,100 Saipem SpA 1,172,211 1,408,723

298,600 Telecom Italia SpA 622,574 485,703259,000 Telecom Italia SpA, di Risp Non Conv. 417,930 299,78843,814 Tenaris SA 730,332 982,475

184,400 UniCredit SpA 620,917 643,310

5,196,170 5,203,099

Japan – 12.4%38,200 AEON Co., Ltd. 455,969 324,55020,100 Asahi Breweries Ltd. 375,049 387,32515,400 Honda Motor Co., Ltd. 522,590 547,13657,000 ITOCHU Corporation 398,131 440,41912,200 JFE Holdings, Inc. 429,886 504,821

54 KDDI Corporation 413,844 299,21721,000 Konica Minolta Holdings Inc. 228,319 226,31166,700 Mitsubishi Corporation 1,701,955 1,742,52642,400 Mitsubishi UFJ Financial Group Inc. 250,205 218,13665,700 Mitsui & Co., Ltd. 1,078,232 977,33334,000 Mitsui Fudosan Co., Ltd. 549,728 599,936

7,400 Murata Manufacturing Co. Ltd. 379,858 383,92820,600 NAMCO BANDAI Holdings Inc. 375,739 205,95620,000 NGK Insulators, Ltd. 375,065 457,27019,000 NGK SPARK PLUG Co., Ltd 227,692 224,760


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AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)Japan (cont’d)

65,000 Nippon Electric Glass Co., Ltd. 709,623 931,73114,000 Nippon Shokubai Co., Ltd. 136,958 126,48715,400 Nippon Telegraph and Telephone Corporation 807,952 636,50672,000 Nippon Yusen Kabushiki Kaisha 337,361 231,47587,400 Nissan Motor Co., Ltd. 1,000,431 802,648

7,850 Orix Corporation 523,992 560,94034,000 Sharp Corporation 686,978 449,54315,400 Sumitomo Mitsui Financial Group Inc. 1,164,873 461,33321,000 Sumitomo Realty And Development Co., Ltd. 319,295 413,85711,400 Tokyo Electric Power Co., Inc. 332,369 300,253

225,000 Toshiba Corporation 1,531,878 1,303,851

15,313,972 13,758,248

Luxembourg – 1.3%5,500 Deutsche Bank AG Warrants on Infosys Technologies Limited

$0.00 Jan. 17, 2017 291,066 323,44327,400 JP Morgan International Warrants on ICICI Bank Limited

$0.00 Apr. 15, 2013 463,608 542,420216,986 JP Morgan International Warrants on Taiwan Semiconductor

Manufacturing Company Ltd. $0.00 Feb. 1, 2012 392,554 458,84471,700 JPMorgan Chase Bank, N.A. Warrants on Taiwan Semiconductor

Manufacturing Company Ltd. $0.00 Sep. 29,2014 151,202 151,619

1,298,430 1,476,326

Netherlands – 5.6%31,670 ArcelorMittal 1,212,900 1,506,46721,000 ASML Holding NV 511,726 749,12037,760 Koninklijke Ahold NV 535,505 525,401

6,400 Koninklijke DSM NV 318,730 329,11012,300 Randstand Holding NV 416,671 637,83248,543 Royal Dutch Shell PLC 1,896,829 1,539,95928,200 Unilever NV 866,091 963,734

5,758,452 6,251,623

New Zealand – 0.1%85,900 Telecom Corporation of New Zealand Limited 134,028 162,873


Republic of Kazakhstan – 0.2%7,300 KazMunaiGas Exploration Production GDR 185,976 190,728

Russia – 0.6%6,250 OAO LUKOIL, Sponsored ADR 552,524 367,686

19,941 Open Joint Stock Company Mining and MetallurgicalCompany Norilsk Nickel ADR 392,671 293,845

945,195 661,531

Singapore – 0.2%81,000 Noble Group Limited 175,071 194,870

South Africa – 0.4%10,500 Bidvest Group Limited 135,262 192,12110,300 Impala Platinum Holdings Limited 281,788 293,282

417,050 485,403

South Korea – 1.7%4,900 Hana Financial Group Inc. 252,143 145,8179,500 Hynix Semiconductor Inc. 187,524 197,2468,000 KB Financial Group, Inc. 364,400 428,0231,120 Samsung Electronics Co., Ltd. 711,547 802,277

500 Samsung Electronics Co., Ltd. GDR 177,436 181,067300 Samsung Electronics Co., Ltd., Preference 183,657 142,193

1,876,707 1,896,623


AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)Spain – 4.5%

136,510 Banco Santander Central Hispano SA 2,393,917 2,352,26615,640 Gamesa Corporation Tecnologica SA 376,745 274,97479,781 Telefonica SA 2,056,457 2,332,103

4,827,119 4,959,343

Sweden – 0.5%26,510 Atlas Copco AB 385,228 406,63212,800 Svenska Cellulosa AB SCA, Class B 235,000 179,463

620,228 586,095

Switzerland – 7.0%25,800 ABB Limited 553,204 517,702

9,000 Adecco SA 469,621 521,31827,924 Credit Suisse Group AG 1,497,405 1,442,92618,275 Julius Baer Group Ltd. 1,059,500 669,65532,293 Nestle SA 1,467,888 1,646,04315,620 Novartis AG 865,309 892,866

6,874 Roche Holdings AG 1,132,320 1,226,8893,089 Syngenta AG 767,572 908,161

7,812,819 7,825,560

Taiwan – 1.0%15,244 AU Optronics Corp. ADR 145,884 191,961

194,894 Credit Suisse Nassau Equity Linked Notes on Hon HaiPrecision Industry Co., Ltd. – Nov. 5, 2010 752,805 969,527

898,689 1,161,488

United Kingdom – 20.7%13,300 Associated British Foods PLC 235,025 185,43616,400 AstraZeneca PLC 796,037 809,60735,700 Aviva PLC 545,123 237,546

178,230 BAE Systems PLC 1,297,163 1,079,11799,900 Barclays PLC 576,214 462,51856,963 BG Group PLC 1,052,731 1,071,73332,623 BHP Billiton PLC 977,937 1,094,832

127,200 BP PLC 1,473,846 1,292,46432,589 British American Tobacco PLC 1,158,568 1,110,73837,684 British Sky Broadcasting Group PLC 324,520 356,654

114,240 BT Group PLC 210,127 259,88024,213 Carnival PLC 663,871 868,70667,533 Centrica PLC 317,130 320,44650,000 GlaxoSmithKline PLC 1,312,826 1,112,78819,600 Greene King PLC 140,060 135,528

118,433 Kingfisher PLC 309,591 456,121110,286 Man Group PLC 1,002,519 569,97537,100 Marks & Spencer Group PLC 255,335 252,86711,402 NEXT PLC 284,075 399,389

233,600 Old Mutual PLC 395,096 428,561191,800 Premier Foods PLC 139,541 115,31425,700 Rio Tinto PLC 1,246,836 1,455,27266,500 Rolls-Royce Group PLC 430,387 545,234

3,186,000 Rolls-Royce Group PLC C Shares – 5,40766,807 Standard Chartered PLC 1,527,452 1,757,733

162,661 Tesco PLC 1,299,408 1,174,20443,500 Thomas Cook Group PLC 165,449 169,73050,400 Tui Travel PLC 208,865 217,94144,050 Tullow Oil PLC 840,985 965,129

611,280 Vodafone Group PLC 1,803,999 1,487,21721,200 Wolseley PLC 462,608 445,582


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AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)United Kingdom (cont’d)

57,200 WPP Group PLC 497,648 586,83385,270 Xstrata PLC 1,235,850 1,577,970

23,186,822 23,008,472


Currency Forward Contracts – 0.0% 15,652OTHER ASSETS, LESS LIABILITIES – 1.5% 1,665,163

NET ASSETS – 100.0% 111,290,624





December 31, 2009 ($)


(Depreciation)Mar. 15, 2010 Canadian Dollar 894,586 British Pound 518,000 878,934 15,652

15,652





Australia 4.6 3.6Austria 0.1 –Belgium 1.0 –Brazil 3.0 1.5China 1.3 1.2Denmark 1.6 1.0Finland 0.8 1.3France 9.4 10.9Germany 9.1 12.1Hong Kong 3.9 0.5Hungary 0.2 –India – 0.1Ireland 0.4 0.6Israel 1.7 1.6Italy 4.7 2.2Japan 12.4 14.6Luxembourg 1.3 –Netherlands 5.6 4.8New Zealand 0.1 –Norway 0.5 1.6Republic of Kazakhstan 0.2 –Russia 0.6 0.7Singapore 0.2 0.1South Africa 0.4 0.4South Korea 1.7 0.9Spain 4.5 3.0Sweden 0.5 2.4Switzerland 7.0 10.5Taiwan 1.0 0.5Thailand – 0.3United Kingdom 20.7 23.8Currency Forward Contracts 0.0 –




(Level 2) ($)



Equities 4,960,493 103,172,990 – 108,133,483Warrants – 1,476,326 – 1,476,326Currency Forward Contracts – 15,652 – 15,652



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A. Risk managementThe investment objective of the Scotia International Equity Fund (the “Fund”)is long-term capital growth. It invests primarily in a broad range of equitysecurities of companies located outside of North America.




CurrencyFinancial




European Euro 39,873,508 – 39,873,508 35.8British Pound 23,041,552 (878,934) 22,162,618 19.9Japanese Yen 13,783,584 – 13,783,584 12.4U.S. Dollar 8,247,561 – 8,247,561 7.4Swiss Franc 7,845,421 – 7,845,421 7.0Hong Kong Dollar 5,825,486 – 5,825,486 5.2Australian Dollar 5,272,118 – 5,272,118 4.7Danish Krone 1,765,221 – 1,765,221 1.6South Korean Won 1,715,557 – 1,715,557 1.5Norwegian Krone 617,131 – 617,131 0.6Swedish Krona 694,869 – 694,869 0.6South African Rand 511,465 – 511,465 0.5Israel Shekel 440,055 – 440,055 0.4Brazilian Real 213,303 – 213,303 0.2Hungary Forint 178,018 – 178,018 0.2Singapore Dollar 194,870 – 194,870 0.2Czech Koruna 12,286 – 12,286 0.0Thai Baht 3,950 – 3,950 0.0

Total 110,235,955 (878,934) 109,357,021 98.2

December 31, 2008

CurrencyFinancial




European Euro 49,836,444 – 49,836,444 34.3British Pound 36,758,062 – 36,758,062 25.3Japanese Yen 21,269,098 – 21,269,098 14.6Swiss Franc 14,834,383 – 14,834,383 10.2U.S. Dollar 7,002,106 – 7,002,106 4.8Australian Dollar 5,291,399 – 5,291,399 3.7Swedish Krona 3,485,034 – 3,485,034 2.4Hong Kong Dollar 2,485,319 – 2,485,319 1.7Norwegian Krone 2,390,414 – 2,390,414 1.7Danish Krone 1,389,768 – 1,389,768 1.0South Korean Won 982,138 – 982,138 0.7South African Rand 550,077 – 550,077 0.4Thai Baht 356,101 – 356,101 0.2Brazilian Real 317,505 – 317,505 0.2Singapore Dollar 213,869 – 213,869 0.1

Total 147,161,717 – 147,161,717 101.3







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital InternationalEurope, Australasia, Far East Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $22,035,544, 19.8% of the Fund’s Net Assets (December 31, 2008-$15,297,833, 10.5% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia International Value FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $75,157,215 $93,839,995Cash 1,844,692 3,208,847Accrued investment income 60,560 121,673Receivable for securities sold 1,194,207 –Subscriptions receivable 17,812 26,403

78,274,486 97,196,918

LIABILITIESPayable for securities purchased 968,494 –Distributions payable – 2Redemptions payable 8,510 8,766Accrued expenses 22,573 35,703

999,577 44,471

Net Assets $77,274,909 $97,152,447

NET ASSETS PER CLASSClass A Units $13,033,820 $11,720,925Advisor Class Units $ 66,526 $ 2,234Class I Units $64,174,563 $85,429,288

UNITS OUTSTANDINGClass A Units 2,179,754 2,330,920Advisor Class Units 11,457 449Class I Units 10,713,475 16,870,883

NET ASSETS PER UNITClass A Units $ 5.98 $ 5.03Advisor Class Units $ 5.81 $ 4.98Class I Units $ 5.99 $ 5.06



1,773,860 3,521,478



406,280 490,693


Net realized gain (loss) on investments sold (21,453,046) (7,386,553)Net realized gain (loss) on foreign exchange (79,296) (129,945)Transaction costs (168,281) (106,929)Change in unrealized appreciation (depreciation) of investments 39,997,390 (32,573,197)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 2,126,222 $ (6,043,721)Advisor Class Units $ 2,292 $ (866)Class F Units $ – $ (5,029)Class I Units $ 17,535,833 $(31,116,223)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.94 $ (2.49)Advisor Class Units $ 0.96 $ (2.07)Class F Units $ – $ (2.73)Class I Units $ 1.21 $ (2.24)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 11,720,925 $ 19,484,818Advisor Class Units 2,234 –Class F Units – 19,228Class I Units 85,429,288 89,174,604

97,152,447 108,678,650

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 2,126,222 (6,043,721)Advisor Class Units 2,292 (866)Class F Units – (5,029)Class I Units 17,535,833 (31,116,223)

19,664,347 (37,165,839)


Class A Units – (15,114)Advisor Class Units (1,301) (23)Class I Units (1,401,535) (3,059,923)

(1,402,836) (3,075,060)


Class A Units 921,371 1,636,581Advisor Class Units 62,000 3,100Class I Units 6,897,742 36,362,967

Reinvested distributionsClass A Units – 15,095Advisor Class Units 1,301 23Class I Units 1,401,535 3,059,923

Payments on redemptionClass A Units (1,734,698) (3,356,734)Class F Units – (14,199)Class I Units (45,688,300) (8,992,060)

(38,139,049) 28,714,696

INCREASE (DECREASE) IN NET ASSETSClass A Units 1,312,895 (7,763,893)Advisor Class Units 64,292 2,234Class F Units – (19,228)Class I Units (21,254,725) (3,745,316)

(19,877,538) (11,526,203)

NET ASSETS – END OF PERIODClass A Units 13,033,820 11,720,925Advisor Class Units 66,526 2,234Class I Units 64,174,563 85,429,288

$ 77,274,909 $ 97,152,447


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FairValue ($)

EQUITIES – 97.3%Belgium – 1.5%

25,100 KBC Groep SA NV 1,194,132 1,140,010

Bermuda – 2.8%38,250 RenaissanceRe Holdings Ltd. 2,143,720 2,133,948

Canada – 3.3%32,400 Gildan Activewear Inc. 652,313 827,90732,721 Magna International Inc. 2,155,646 1,738,201

2,807,959 2,566,108

Finland – 2.3%132,675 Nokia Oyj 2,112,303 1,786,357

France – 15.9%408,525 Alcatel-Lucent SA 3,082,500 1,434,96539,700 Cap Gemini SA 2,046,432 1,885,96093,054 Credit Agricole SA 3,108,176 1,701,41734,300 Lagardere SCA 1,439,940 1,451,550

161,899 Natixis 385,152 845,25856,650 Publicis Groupe 1,636,460 2,410,23083,103 Vivendi 3,255,521 2,573,031

14,954,181 12,302,411

Germany – 1.6%26,079 Henkel AG & Co. KGaA 1,147,603 1,221,491

Hong Kong – 1.3%146,111 Esprit Holdings Limited 1,095,292 1,009,911

Italy – 2.1%100,172 Finmeccanica SpA 2,008,876 1,675,514

Japan – 10.6%19,400 Canon Inc. 833,801 861,764

297,800 Mitsubishi UFJ Financial Group Inc. 3,118,298 1,532,09333,400 NGK SPARK PLUG Co., Ltd 400,210 395,105

106,000 OMRON Corporation 1,743,173 1,937,90242,600 Sumitomo Mitsui Financial Group Inc. 3,253,992 1,276,15576,050 THK Co., Ltd. 1,244,212 1,411,54011,700 Tokyo Electron Limited 500,510 786,108

11,094,196 8,200,667

Netherlands – 13.8%222,621 AEGON NV 2,945,378 1,487,94622,000 Akzo Nobel NV 1,284,448 1,520,82464,092 European Aeronautic Defence and Space Company 1,172,966 1,342,738

193,602 ING Groep NV 3,918,123 1,962,89399,400 Koninklijke (Royal) Philips Electronics NV 3,431,523 3,086,827

5,723 Nutreco Holding NV 337,294 336,46826,425 Unilever NV 838,876 903,074

13,928,608 10,640,770

Norway – 2.9%64,600 DnB NOR ASA 888,195 735,678

102,375 Telenor ASA 907,292 1,506,440

1,795,487 2,242,118

Puerto Rico – 0.6%202,300 Popular, Inc. 2,101,330 469,551

Russia – 2.9%84,700 OAO Gazprom, Sponsored ADR 1,507,678 2,217,471

South Korea – 1.1%48,310 Korea Electric Power Corporation 1,051,188 820,841

Sweden – 0.9%104,900 Skandinaviska Enskilda Banken AB 444,914 676,911

Switzerland – 5.5%102,000 Clariant, AG 1,472,833 1,256,930


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Switzerland (cont’d)

65,200 Gam Holding Ltd. 698,456 832,400133,976 UBS AG 3,387,094 2,159,347

5,558,383 4,248,677

United Kingdom – 22.6%225,498 Aviva PLC 2,887,793 1,500,455142,200 BAE Systems PLC 766,186 860,968245,700 Barclays PLC 1,319,825 1,137,544229,900 BP PLC 2,078,422 2,335,987138,900 Bunzl PLC 1,516,977 1,582,056149,600 Carillion plc 757,201 768,95234,725 GlaxoSmithKline PLC 1,035,721 772,832

154,873 HSBC Holdings PLC 1,835,212 1,856,957407,800 International Power PLC 1,980,960 2,119,884

1,466,112 Royal Bank of Scotland Group PLC, The 6,203,834 722,495158,700 Smith & Nephew PLC 1,331,551 1,712,061100,275 Travis Perkins PLC 1,376,867 1,437,01731,250 Wolseley PLC 640,313 656,813

23,730,862 17,464,021

United States – 5.6%28,700 Amdocs Limited 746,222 859,96016,900 Cooper Industries Ltd. 751,032 756,653

105,900 Tyco Electronics Ltd. 1,883,183 2,723,825

3,380,437 4,340,438



NET ASSETS – 100.0% 77,274,909




Australia – 2.0Belgium 1.5 –Bermuda 2.8 2.8Canada 3.3 1.4Finland 2.3 2.1France 15.9 14.9Germany 1.6 2.1Greece – 0.4Hong Kong 1.3 1.4Ireland – 0.1Italy 2.2 3.4Japan 10.6 22.8Netherlands 13.8 14.2Norway 2.9 0.7Puerto Rico 0.6 1.2Russia 2.9 –South Korea 1.1 5.0Sweden 0.9 –Switzerland 5.5 7.7United Kingdom 22.6 12.5United States 5.6 1.9




(Level 2) ($)



Equities 10,162,283 64,994,932 – 75,157,215



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117


A. Risk managementThe investment objective of the Scotia International Value Fund (the “Fund”) isto achieve long-term capital growth. It invests primarily in equity securities ofcompanies located outside the U.S. and Canada.




CurrencyFinancial




European Euro 28,780,164 – 28,780,164 37.2British Pound 17,464,017 – 17,464,017 22.6U.S. Dollar 12,408,094 – 12,408,094 16.1Japanese Yen 8,200,667 – 8,200,667 10.6Swiss Franc 4,248,678 – 4,248,678 5.5Norwegian Krone 2,242,118 – 2,242,118 2.9Hong Kong Dollar 1,009,911 – 1,009,911 1.3Swedish Krona 676,911 – 676,911 0.9South Korean Won 168,603 – 168,603 0.2

Total 75,199,163 – 75,199,163 97.3

December 31, 2008

CurrencyFinancial




European Euro 36,179,346 – 36,179,346 37.2Japanese Yen 22,112,368 – 22,112,368 22.8British Pound 12,165,289 – 12,165,289 12.5U.S. Dollar 11,286,317 – 11,286,317 11.6Swiss Franc 7,522,989 – 7,522,989 7.7Australian Dollar 1,912,936 – 1,912,936 2.0Hong Kong Dollar 1,337,311 – 1,337,311 1.4Norwegian Krone 682,459 – 682,459 0.7South Korean Won 640,980 – 640,980 0.7

Total 93,839,995 – 93,839,995 96.6







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital InternationalEurope, Australasia and Far East Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $18,236,879, 23.6% of the Fund’s Net Assets (December 31,2008-$9,571,679, 9.9% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia International Value Fund (Continued)

Scotia European FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $22,384,008 $25,615,044Cash 157,923 380,318Accrued investment income 25,084 33,112Receivable for securities sold 72,000 82,300Subscriptions receivable 3,767 1,921

22,642,782 26,112,695

LIABILITIESPayable for securities purchased 27,424 –Distributions payable 377 359Redemptions payable 12,389 8,737Accrued expenses 25,607 52,121Payable for currency forward contracts 36 –

65,833 61,217

Net Assets $22,576,949 $26,051,478

NET ASSETS PER CLASSClass A Units $22,122,890 $21,480,866Class I Units $ 454,059 $ 4,570,612

UNITS OUTSTANDINGClass A Units 2,623,390 2,776,555Class I Units 54,327 599,370



2009 2008INVESTMENT INCOMEDividends $ 953,075 $ 1,467,352Interest 14,686 20,114Securities lending – 21,555Foreign withholding taxes/Tax reclaims (115,235) (88,525)

852,526 1,420,496



563,294 822,908


Net realized gain (loss) on investments sold (5,922,416) (6,427,646)Net realized gain (loss) on currency forwards (12,862) (255,972)Net realized gain (loss) on foreign exchange (28,255) 19,566Transaction costs (27,802) (41,037)Change in unrealized appreciation (depreciation) of investments 7,734,599 (9,742,317)Change in unrealized appreciation (depreciation) of currency forwards (36) (36,500)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 2,105,807 $(13,727,644)Class E Units $ – $ 41,359Class I Units $ (73,347) $ (2,200,033)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.78 $ (4.83)Class E Units $ – $ 0.09Class I Units $ (0.30) $ (3.98)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $21,480,866 $ 37,975,117Class E Units – 5,567,390Class I Units 4,570,612 –

26,051,478 43,542,507

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 2,105,807 (13,727,644)Class E Units – 41,359Class I Units (73,347) (2,200,033)

2,032,460 (15,886,318)


Class A Units (296,060) (326,117)Class I Units (11,262) (235,863)

(307,322) (561,980)


Class A Units 910,371 2,266,987Class E Units – 1,109,050Class I Units 226,913 6,845,839

Reinvested distributionsClass A Units 293,075 325,067Class I Units 11,262 235,845

Payments on redemptionClass A Units (2,371,169) (5,032,544)Class E Units – (6,717,799)Class I Units (4,270,119) (75,176)

(5,199,667) (1,042,731)

INCREASE (DECREASE) IN NET ASSETSClass A Units 642,024 (16,494,251)Class E Units – (5,567,390)Class I Units (4,116,553) 4,570,612

(3,474,529) (17,491,029)

NET ASSETS – END OF PERIODClass A Units 22,122,890 21,480,866Class I Units 454,059 4,570,612

$22,576,949 $ 26,051,478


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Scotia European Fund (Continued)



AverageCost ($)

FairValue ($)

FOREIGN EQUITIES – 99.1%Austria – 0.6%

2,800 OMV AG 121,153 128,598

Belgium – 1.9%4,828 Anheuser-Busch InBev NV 196,626 261,6034,884 Umicore 163,061 170,571

359,687 432,174

Denmark – 1.8%1,550 Carlsberg A/S Series B 117,227 119,9584,100 Danske Bank AS 98,088 97,9012,944 Vestas Wind Systems AS 210,591 188,912

425,906 406,771

Finland – 1.1%18,000 Nokia Oyj 369,990 242,355

France – 16.3%25,188 Alcatel-Lucent SA 118,763 88,474

6,866 BNP Paribas 567,662 568,2551,900 Bouygues Guyancourt 103,106 103,9222,546 Cap Gemini SA 143,955 120,9481,800 Casino Guichard-Perrachon SA 142,679 169,1862,600 Compagnie de Saint-Gobain 150,082 146,371

800 Compagnie Generale des Etablissements Michelin, Class B 57,886 64,3585,023 Credit Agricole SA 114,728 91,8411,900 Electricite de France SA 110,411 118,5769,261 Eutelsat Communications 225,816 311,6236,519 France Telecom SA 199,251 170,7031,471 Ipsen SA 77,211 85,6962,800 Klepierre 122,531 119,4591,700 Lagardere SCA 152,884 71,9432,156 Renault SA 153,526 115,1425,300 Rexel SA 78,322 80,7327,516 Sanofi-Aventis 590,300 617,8976,684 SES Global SA FDR 172,315 157,1901,800 Societe Generale 227,059 130,623

400 Unibail-Rodamco 74,557 92,351430 Vallourec SA 80,806 82,027

5,810 Vivendi 166,068 179,889

3,829,918 3,687,206

Germany – 13.7%1,900 Allianz SE 302,208 249,4032,700 BASF SE 139,641 176,7732,900 Bayer AG 214,926 244,0904,996 Bayerische Motoren Werke AG 218,761 239,7053,100 Celesio AG 132,893 83,0712,400 Deutsche Bank AG 247,624 177,9867,250 Deutsche Post AG 108,165 146,305

10,900 Deutsche Telekom AG 193,220 169,6565,781 E.ON AG 254,105 252,0781,805 Fresenius Medical Care AG & Co. KGaA 97,878 100,234

691 Linde AG 87,710 87,2301,200 METRO AG 58,648 77,307

730 Muenchener Rueckversicherungs-Gesellschaft AG 110,477 119,5692,750 RWE AG 277,609 281,3903,580 Siemens AG 325,014 345,2462,800 ThyssenKrupp AG 101,738 111,3524,445 Tognum AG 68,392 77,3431,541 Volkswagen AG Non-voting 142,425 150,465

3,081,434 3,089,203

Ireland – 1.0%6,286 CRH PLC 169,854 178,5807,460 Irish Life & Permanent PLC 65,731 36,939

235,585 215,519


AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)Italy – 4.3%

10,000 Banca Popolare di Milano Scarl 68,039 74,4019,100 Enel SpA 50,738 55,4217,000 Eni SpA 230,895 186,9084,296 Saipem SpA 111,633 154,779

48,600 Telecom Italia SpA 135,828 79,05377,400 Telecom Italia SpA, di Risp Non Conv. 134,562 89,589

6,279 Tenaris SA 104,619 140,79955,100 UniCredit SpA 169,186 192,225

1,005,500 973,175

Netherlands – 5.8%6,482 ArcelorMittal 266,194 308,3333,200 ASM International NV 66,115 84,4405,929 ASML Holding NV 162,175 211,5013,600 Delta Lloyd NV 90,542 91,229

13,323 ING Groep NV 168,895 135,0796,680 Koninklijke Ahold NV 94,429 92,9471,900 Koninklijke DSM NV 90,862 97,7051,400 Nutreco Holding NV 62,864 82,3094,075 Qiagen NV 84,016 95,4692,300 Randstand Holding NV 84,227 119,269

1,170,319 1,318,281


Spain – 6.4%46,091 Banco Santander Central Hispano SA 736,062 794,21522,691 Telefonica SA 595,856 663,288

1,331,918 1,457,503

Sweden – 1.2%2,150 Autoliv Inc. -Sweden Depository Receipt 82,081 99,7695,860 SKF AB, Class B 85,668 105,6457,550 Volvo AB, Class B 119,673 67,515

287,422 272,929

Switzerland – 7.0%1,100 Adecco SA 51,314 63,7175,487 Credit Suisse Group AG 272,960 283,5323,511 Gam Holding Ltd. 53,616 44,8243,639 Julius Baer Group Ltd. 189,260 133,3454,810 Novartis AG 261,068 274,9481,158 Partners Group Holding AG 131,183 153,0221,920 Roche Holdings AG 369,734 342,687

398 Syngenta AG 106,585 117,011763 Zurich Financial Services AG 169,747 174,055

1,605,467 1,587,141

United Kingdom – 37.4%4,600 AstraZeneca PLC 232,741 227,085

11,400 Aviva PLC 105,285 75,85534,400 BAE Systems PLC 259,243 208,27933,100 Barclays PLC 181,364 153,24716,057 BG Group PLC 263,403 302,10565,491 BP PLC 656,841 665,44624,561 British Airways PLC 64,034 76,98111,326 British American Tobacco PLC 365,999 386,02743,900 BT Group PLC 71,186 99,866

5,684 Carnival PLC 164,403 203,92942,754 Coodson Group PLC 322,057 302,32779,600 Debenhams PLC 109,852 104,293

6,198 easyJet PLC 40,776 36,68853,447 GKN PLC 110,091 104,59411,500 GlaxoSmithKline PLC 293,531 255,94112,100 Greene King PLC 97,744 83,66835,440 HSBC Holdings PLC 434,005 424,932


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AverageCost ($)

FairValue ($)


21,379 ICAP PLC 155,092 155,66129,246 John Wood Group PLC 153,060 151,787

3,600 Kazakhmys PLC 81,466 79,13721,564 Man Group PLC 140,264 111,44617,200 Marks & Spencer Group PLC 116,601 117,23242,000 Old Mutual PLC 82,328 77,05374,900 Premier Foods PLC 55,780 45,03141,100 Rentokil Initial PLC 62,586 80,056

9,326 Rio Tinto PLC 446,083 528,08813,800 Rolls-Royce Group PLC 82,712 113,146

828,000 Rolls-Royce Group PLC C Shares – 1,40513,726 Royal Dutch Shell PLC, Class B 474,007 420,231

9,117 Shire PLC 174,775 187,31815,458 Standard Chartered PLC 419,726 406,70949,409 Tesco PLC 403,829 356,67025,400 Thomas Cook Group PLC 98,012 99,107


AverageCost ($)

FairValue ($)


3,800 Travis Perkins PLC 45,298 54,45714,300 Tui Travel PLC 68,002 61,83613,507 Tullow Oil PLC 259,353 295,937

328,771 Vodafone Group PLC 950,875 799,8863,600 Wolseley PLC 76,222 75,665

11,900 WPP Group PLC 93,251 122,08621,276 Xstrata PLC 227,442 393,725

8,439,319 8,444,932


Currency Forward Contracts – 0.0% (36)OTHER ASSETS, LESS LIABILITIES – 0.9% 192,977

NET ASSETS – 100.0% 22,576,949





December 31, 2009 ($)


(Depreciation)Jan. 15, 2010 Canadian Dollar 470,069 British Pound 277,000 470,105 (36)

(36)





Austria 0.6 0.4Belgium 1.9 0.6Denmark 1.8 –Finland 1.1 1.4France 16.3 14.6Germany 13.7 17.9Greece – 1.6Ireland 1.0 1.0Italy 4.3 2.9Netherlands 5.8 3.2Norway 0.6 1.5Spain 6.4 5.1Sweden 1.2 2.3Switzerland 7.0 10.7United Kingdom 37.4 35.1Currency Forward Contracts 0.0 –




(Level 2) ($)



Equities – 22,384,008 – 22,384,008




(Level 2) ($)



Currency Forward Contracts – 36 – 36

Total Investments – 36 – 36


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A. Risk managementThe investment objective of the Scotia European Fund (the “Fund”) is long-term capital growth. It invests primarily in a broad range of high quality equitysecurities of companies in Europe.




CurrencyFinancial




European Euro 11,576,061 – 11,576,061 51.3British Pound 8,530,754 (470,105) 8,060,649 35.7Swiss Franc 1,592,203 – 1,592,203 7.1Danish Krone 410,696 – 410,696 1.8Swedish Krona 277,897 – 277,897 1.2Norwegian Krone 133,666 – 133,666 0.6Czech Koruna 242 – 242 0.0U.S. Dollar 8,812 – 8,812 0.0

Total 22,530,331 (470,105) 22,060,226 97.7

December 31, 2008

CurrencyFinancial




European Euro 12,802,921 – 12,802,921 49.1British Pound 9,188,479 – 9,188,479 35.3Swiss Franc 2,738,908 – 2,738,908 10.5Swedish Krona 591,337 – 591,337 2.3Norwegian Krone 388,497 – 388,497 1.5U.S. Dollar 89,204 – 89,204 0.3

Total 25,799,346 – 25,799,346 99.0

The amounts in the above tables are based on the fair value of the Fund’sfinancial instruments. Other financial assets (including dividends and interest

receivable and receivable for investments sold) and financial liabilities that aredenominated in foreign currencies do not expose the Fund to significantcurrency risk.

As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $2,206,023, 9.8% of the Fund’s Net Assets (December 31,2008-$2,579,935, 9.9% of the Fund’s Net Assets). In practice, actual results maydiffer from this sensitivity analysis and the difference could be material.





F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital InternationalEurope Index, as of December 31, 2009, with all other variables held constant,would result in an increase or decrease of approximately $4,244,466, 18.8% ofthe Fund’s Net Assets (December 31,2008-$2,612,734, 10.0% of the Fund’s NetAssets). The Fund’s historical sensitivity measure may not be representative ofits future sensitivity measure, and accordingly, the impact on Net Assets couldbe materially different.


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Scotia Pacific Rim FundS T AT E M E N T O F N E T A S S E T SAs at December 31


53,411,181 21,811,208


78,384 54,537

Net Assets $53,332,797 $21,756,671

NET ASSETS PER CLASSClass A Units $25,042,978 $21,009,101Class I Units $28,289,819 $ 747,570

UNITS OUTSTANDINGClass A Units 2,303,642 2,268,596Class I Units 2,361,764 74,461



2009 2008INVESTMENT INCOMEDividends $ 684,099 $ 751,693Interest 1,592 19,083Securities lending – 4,443Foreign withholding taxes/Tax reclaims (82,980) (95,089)

602,711 680,130



660,443 738,515





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 3,660,805 $(11,904,617)Class I Units $ 1,063,071 $ (367,656)



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $21,009,101 $ 33,228,141Class I Units 747,570 899,414

21,756,671 34,127,555

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 3,660,805 (11,904,617)Class I Units 1,063,071 (367,656)

4,723,876 (12,272,273)


Class A Units 3,311,977 4,735,160Class I Units 27,567,599 549,964

Payments on redemptionClass A Units (2,938,905) (5,049,583)Class I Units (1,088,421) (334,152)

26,852,250 (98,611)

INCREASE (DECREASE) IN NET ASSETSClass A Units 4,033,877 (12,219,040)Class I Units 27,542,249 (151,844)

31,576,126 (12,370,884)

NET ASSETS – END OF PERIODClass A Units 25,042,978 21,009,101Class I Units 28,289,819 747,570

$53,332,797 $ 21,756,671


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AverageCost ($)

FairValue ($)


19,155 Australian Stock Exchange Ltd. 621,508 626,521162,000 Australian Worldwide Exploration Limited 406,647 424,68847,621 BHP Billiton Limited 1,453,852 1,915,11630,040 Commonwealth Bank of Australia 1,195,031 1,538,33655,021 Lend Lease Corporation Limited 524,889 526,54012,094 Rio Tinto Limited 709,192 840,37254,590 Toll Holdings Limited 576,168 446,76243,893 Westpac Banking Corporation 955,030 1,037,58517,382 Woodside Petroleum Limited 699,490 767,226

7,141,807 8,123,146

China – 6.0%846,000 Bank of China Ltd., Class H 500,656 475,700440,000 China Coal Energy Company, Class H 729,317 837,944481,580 Comba Telecom Systems Holdings Limited 313,190 584,75065,200 Dongfang Electric Corp Ltd., Class H 362,306 364,30574,000 Hengan International Group Company Limited 427,453 575,241

431,000 Industrial and Commercial Bank of China Ltd, Class H 314,284 371,462

2,647,206 3,209,402

Hong Kong – 16.6%74,300 ASM Pacific Technology Limited 595,888 733,441

182,000 China Life Insurance Co., Limited, Class H 820,292 935,30244,500 China Mobile Limited 572,237 435,616

600,000 CNOOC Limited 905,530 981,013446,000 Dongfeng Motor Group Company Limited 420,618 666,69623,200 Hong Kong Aircraft Engineering Company Limited 358,661 315,65955,000 Hong Kong Exchanges & Clearing Limited 926,423 1,028,29495,500 Kerry Properties Limited 414,169 506,420

286,500 Lifestyle International Holdings Ltd. 534,276 558,082148,000 Shimao Property Holdings Limited 355,552 291,514281,000 Sino-Ocean Land Holdings Ltd. 329,698 269,92824,500 Tencent Holdings Limited 405,104 554,54689,000 Wharf (Holdings) Limited, The 523,748 534,46248,500 Wing Hang Bank Ltd. 515,839 473,295

586,000 Zijin Mining Group Company Limited, Class H 630,411 582,380

8,308,446 8,866,648

India – 3.8%17,080 Larsen & Toubro Limited GDR 430,275 650,369

8,540 Reliance Industries Ltd. GDR 400,533 410,8069,316 State Bank of India GDR 682,942 948,760

1,513,750 2,009,935

Indonesia – 4.4%120,500 P.T. Astra International Tbk 385,067 463,408959,000 P.T. Bank Rakyat Indonesia (Persero) Tbk 734,791 811,239607,666 P.T. United Tractors Tbk 785,548 1,051,871

1,905,406 2,326,518

Japan – 26.2%12,000 Canon Inc. 535,139 533,05011,000 Daikin Industries Ltd. 480,594 451,096

206 eAccess Ltd. 178,406 126,41210,100 East Japan Railway Company 754,599 669,65724,300 Elpida Memory Inc. 341,801 416,487

1,400 Fast Retailing Company Limited 267,858 274,55627,500 Honda Motor Co., Ltd. 962,804 977,02924,000 Japan Steel Works Ltd., The 319,836 317,114

192,000 Kawasaki Heavy Industries, Ltd. 572,717 508,54625,500 Komatsu Ltd. 522,435 558,60857,000 Kubota Corporation 443,316 550,76819,200 Mitsubishi Corporation 489,796 501,597

101,800 Mitsubishi UFJ Financial Group Inc. 849,070 523,73119,000 Mitsui Fudosan Co., Ltd. 356,091 335,25810,800 NIDEC Corporation 857,913 1,042,245

4,300 Nissha Printing Co., Ltd 245,050 222,2303,900 Nitori Co., Ltd. 314,024 304,922

60 Seven & I Holdings Co., Ltd. 2,424 1,280


AverageCost ($)

FairValue ($)

FOREIGN EQUITIES (cont’d)Japan (cont’d)

6,800 Shin-Etsu Chemical Co., Ltd. 445,011 402,74014,000 Shionogi & Co., Ltd. 322,815 318,14023,000 Sumitomo Metal Mining Co., Ltd. 360,288 356,26315,800 Sumitomo Mitsui Financial Group Inc. 890,692 473,31642,500 Sumitomo Rubber Industries Ltd. 389,436 384,42127,900 Suzuki Motor Corporation 691,883 719,86213,900 Terumo Corporation 696,860 874,07818,400 Tokyo Electric Power Co., Inc. 592,760 484,61890,000 Toshiba Corporation 510,512 521,54019,600 Toyota Boshoku Corporation 334,740 457,546

7,000 Unicharm Corporation 667,156 688,580

14,396,026 13,995,690

Malaysia – 1.5%114,400 CIMB Group Holdings Berhad 332,809 450,390247,308 IJM Corporation Berhad 312,685 339,765

645,494 790,155

New Zealand – 0.9%84,347 Fletcher Building Limited 447,396 511,284

Philippines – 1.9%3,494,000 Robinsons Land Corporation 749,971 1,024,820

Singapore – 3.6%274,000 Hotel Properties Limited 472,090 449,689105,000 Keppel Corporation Limited 680,304 641,552161,000 Singapore Telecommunications Limited 388,297 372,300306,000 Wheelock Properties (Singapore) Limited 450,448 453,555

1,991,139 1,917,096

South Korea – 8.9%35,550 Hynix Semiconductor Inc. 615,161 738,117

4,108 Hyundai Mobis 410,411 628,4543,295 LG Chem Ltd. 503,422 674,1944,600 POSCO ADR 455,264 632,8832,890 Samsung Electro-Mechanics Co. 269,148 277,9831,490 Samsung Electronics Co., Ltd. 905,709 1,067,3161,165 Samsung Fire & Marine Insurance Co., Ltd. 219,685 208,674

12,920 Shinhan Financial Group Co., Ltd. 473,938 503,184

3,852,738 4,730,805

Taiwan – 6.8%74,215 Acer Inc. 336,509 456,57225,619 Cathay Financial Holding Co., Ltd. GDR 420,517 502,209

114,157 Hon Hai Precision Industry Co., Ltd. GDR 909,294 1,131,83328,322 MediaTek Inc. 429,254 516,473

237,000 Siliconware Precision Industries Co., Ltd. 361,171 334,33578,000 Silitech Technology Corp. 266,492 292,451

100,000 Taiwan Fertilizer Co., Ltd. 414,583 371,430

3,137,820 3,605,303

Thailand – 2.4%30,700 Banpu Public Company Limited 462,365 559,487

919,900 CP All Public Company Limited 477,726 716,766

940,091 1,276,253



NET ASSETS – 100.0% 53,332,797


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Australia 15.2 14.4China 6.0 2.9Hong Kong 16.6 14.2India 3.8 3.2Indonesia 4.4 1.2Japan 26.2 45.1Malaysia 1.5 –New Zealand 0.9 –Philippines 1.9 0.6Singapore 3.6 3.4South Korea 8.9 8.8Taiwan 6.8 5.1Thailand 2.4 0.8




(Level 2) ($)



Equities 632,883 51,754,172 – 52,387,055

Total Investments 632,883 51,754,172 – 52,387,055


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A. Risk managementThe investment objective of the Scotia Pacific Rim Fund (the “Fund”) is long-term capital growth. It invests primarily in a broad range of equity securities ofcompanies in the western portion of the Pacific Rim.




CurrencyFinancial




Japanese Yen 14,010,924 – 14,010,924 26.3Hong Kong Dollar 12,232,376 – 12,232,376 22.9Australian Dollar 8,155,198 – 8,155,198 15.3U.S. Dollar 4,559,167 – 4,559,167 8.5South Korean Won 4,097,921 – 4,097,921 7.7Jakarta Rupiah 2,330,673 – 2,330,673 4.4Singapore Dollar 1,917,095 – 1,917,095 3.6Taiwan Dollar 1,699,166 – 1,699,166 3.2Thai Baht 1,276,253 – 1,276,253 2.4Philippines Peso 1,024,820 – 1,024,820 1.9Kuala Lumpur Ringgit 790,155 – 790,155 1.5New Zealand Dollar 511,284 – 511,284 0.9

Total 52,605,032 – 52,605,032 98.6

December 31, 2008

CurrencyFinancial




Japanese Yen 9,819,214 – 9,819,214 45.1Hong Kong Dollar 3,714,464 – 3,714,464 17.1Australian Dollar 3,131,060 – 3,131,060 14.4South Korean Won 1,813,248 – 1,813,248 8.3U.S. Dollar 1,133,254 – 1,133,254 5.2Taiwan Dollar 824,024 – 824,024 3.8Singapore Dollar 732,889 – 732,889 3.4Jakarta Rupiah 251,091 – 251,091 1.2Thai Baht 184,632 – 184,632 0.8Philippines Peso 123,182 – 123,182 0.6

Total 21,727,058 – 21,727,058 99.9







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital International AllCountry Pacific Free Total Return Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $11,306,553, 21.2% of the Fund’s Net Assets (December 31,2008-$2,298,385, 10.6% of the Fund’s Net Assets). The Fund’s historical sensitivitymeasure may not be representative of its future sensitivity measure, andaccordingly, the impact on Net Assets could be materially different.


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Scotia Latin American FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $116,868,459 $46,222,814Cash 578,053 1,071,915Accrued investment income 263,528 30,002Receivable for securities sold 978,073 –Subscriptions receivable 83,550 17,206

118,771,663 47,341,937


167,106 114,788

Net Assets $118,604,557 $47,227,149

NET ASSETS PER CLASSClass A Units $ 79,702,020 $44,248,158Class F Units $ 104,341 $ 59,321Class I Units $ 38,798,196 $ 2,919,670

UNITS OUTSTANDINGClass A Units 2,747,624 2,633,939Class F Units 3,545 3,498Class I Units 1,287,757 169,963



2009 2008INVESTMENT INCOMEDividends $ 1,242,095 $ 893,662Interest 726,498 695,062Securities lending 105 2,924Foreign withholding taxes/Tax reclaims (115,011) (101,339)

1,853,687 1,490,309

EXPENSESManagement fees (note 4) 1,212,664 1,575,159Audit fees 14,379 18,104Independent Review Committee fees 684 660Custodian fees 93,682 103,624Filing fees 20,254 19,501Legal fees 6,997 5,880Unitholder reporting costs 23,955 24,389Unitholder administration, service fees and GST 221,759 240,694


1,591,343 1,950,672

Net investment income (loss) 262,344 (460,363)

Net realized gain (loss) on investments sold 4,585,308 (12,767,634)Net realized gain (loss) on foreign exchange (1,020,117) 243,614Transaction costs (627,556) (267,966)Change in unrealized appreciation (depreciation) of investments 37,343,223 (39,202,074)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $32,561,893 $(50,630,063)Class F Units $ 43,078 $ (64,792)Class I Units $ 7,938,231 $ (1,759,568)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 12.17 $ (19.12)Class F Units $ 12.37 $ (18.39)Class I Units $ 15.38 $ (16.36)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 44,248,158 $ 90,631,777Class F Units 59,321 142,835Class I Units 2,919,670 3,432,284

47,227,149 94,206,896

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 32,561,893 (50,630,063)Class F Units 43,078 (64,792)Class I Units 7,938,231 (1,759,568)

40,543,202 (52,454,423)


Class A Units 10,402,562 21,077,260Class F Units 17,740 9,531Class I Units 36,432,988 1,894,302

Reinvested distributionsClass A Units – (307)

Payments on redemptionClass A Units (7,510,593) (16,830,509)Class F Units (15,798) (28,253)Class I Units (8,492,693) (647,348)

30,834,206 5,474,676

INCREASE (DECREASE) IN NET ASSETSClass A Units 35,453,862 (46,383,619)Class F Units 45,020 (83,514)Class I Units 35,878,526 (512,614)

71,377,408 (46,979,747)

NET ASSETS – END OF PERIODClass A Units 79,702,020 44,248,158Class F Units 104,341 59,321Class I Units 38,798,196 2,919,670

$118,604,557 $ 47,227,149


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AverageCost ($)

FairValue ($)

EQUITIES – 98.5%Argentina – 1.1%

30,000 Tenaris SA ADR 1,053,942 1,343,801

Bermuda – 0.9%182,300 GP Investments Ltd. – BDR 1,086,878 1,066,596

Brazil – 64.9%324,700 Banco Bradesco SA, Preference 5,668,241 7,117,688140,000 Banco Santander Brasil SA ADS ADR 1,993,543 2,046,736169,840 Bradespar SA, Preference 2,949,065 3,904,16859,126 Brasil Telecom SA 1,772,792 980,083

200,000 Cielo SA 1,897,904 1,843,807123,600 Companhia Siderurgica Nacional SA 3,350,620 4,140,084

1,550,000 Construtora Tenda SA 5,278,066 5,136,74811,738 Even Construtora Incorporadora SA 45,217 58,562

280,800 Gerdau SA, Preference 3,601,038 4,923,615310,900 Itau Unibanco Holding SA ADR 4,887,096 7,448,01654,690 Itau Unibanco Holding SA, Preference 1,021,482 1,273,983

811,730 Itausa-Investimentos Itau SA, Preference 4,693,536 5,776,376162,000 LPS Brasil – Consultoria de Imoveis SA 2,174,239 2,279,27089,800 Metalurgica Gerdau SA, Preference 1,357,256 1,882,997

160,000 OGX Petroleo e Gas Participacoes SA 982,539 1,638,939693,000 Paranapanema SA 3,061,992 2,781,003203,390 Petroleo Brasileiro SA ADR Non-Voting 6,443,732 9,035,75881,000 Petroleo Brasileriro SA, Preference 1,529,143 1,788,76431,150 Telemar Norte Leste SA, Preference 1,053,500 1,149,067

446,060 Vale SA ADR 7,325,944 11,622,9044,685 Vale SA, Preference 82,411 119,129

61,169,356 76,947,697

Chile – 4.5%18,179 Banco de Credito e Inversiones 500,179 623,45914,200 Banco Santander Chile SA ADR 664,046 962,972

519,580 Empresa Nacional de Electric SA 853,358 914,04436,976 Empresa Nacional de Telecomunicaciones SA 540,065 562,05842,182 Empresas Copec SA 596,461 660,360

824,458 Enersis SA 305,626 396,48017,753 Sociedad Quimica y Minera de Chile SA, Class B 713,071 699,711

245,540 Vina Concha Y Toro SA 512,906 543,447

4,685,712 5,362,531

Mexico – 21.5%119,000 America Movil SAB de CV, Series L, ADR 5,798,013 5,862,826800,000 Bolsa Mexicana de Valores SA 1,051,589 990,511146,800 Carso Global Telecom SAB de CV 659,773 687,43093,000 Cemex SAB de CV ADR 1,098,884 1,154,503

902,622 Cemex SAB de CV 1,049,508 1,121,9201,490,000 Consorcio ARA, SAB de CV 1,057,437 1,088,711

422,720 Fomento Economico Mexicano, SAB de CV 1,588,947 2,121,376108,200 Grupo Bimbo SAB de CV 648,441 740,204341,700 Grupo Financiero Banorte SAB de CV, Series O 951,286 1,294,457

1,126,005 Grupo Mexico SA de CV, Series B 1,739,451 2,698,793173,410 Grupo Modelo SA de CV, Series C 676,174 1,009,478737,100 Telefonos De Mexico SAB de CV SER 687,912 642,749

1,627,700 Telmex Internacional SAB de CV, Class L 1,069,053 1,512,142971,380 Wal-Mart de Mexico SAB de CV, Series V 3,522,433 4,539,385

21,598,901 25,464,485

Peru – 2.0%70,000 Southern Copper Corporation 2,394,110 2,415,061


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Russia – 3.6%

35,000 OAO LUKOIL, Sponsored ADR 1,996,191 2,059,044250,000 Rosneft Oil Company 2,145,389 2,209,244

4,141,580 4,268,288



NET ASSETS – 100.0% 118,604,557




Argentina 1.1 –Bermuda 0.9 –Brazil 64.9 58.0Chile 4.5 3.3Mexico 21.5 24.7Peru 2.0 11.9Russia 3.6 –




(Level 2) ($)



Equities 112,600,171 4,268,288 – 116,868,459



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128


A. Risk managementThe investment objective of the Scotia Latin American Fund (the “Fund”) islong-term capital growth. It invests primarily in a broad range of high qualityequity securities of companies in Latin America.




CurrencyFinancial




Brazilian Real 47,860,879 – 47,860,879 40.4U.S. Dollar 46,212,041 – 46,212,041 39.0Mexican Peso 18,447,156 – 18,447,156 15.6Chile Peso 4,399,558 – 4,399,558 3.7

Total 116,919,634 – 116,919,634 98.7

December 31, 2008

CurrencyFinancial




U.S. Dollar 25,995,216 – 25,995,216 55.0Brazilian Real 17,144,067 – 17,144,067 36.3Mexican Peso 3,181,846 – 3,181,846 6.8Chile Peso 664,302 – 664,302 1.4

Total 46,985,431 – 46,985,431 99.5







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital InternationalEmerging Markets Latin American Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $28,702,303, 24.2% of the Fund’s Net Assets (December 31,2008-$5,315,624, 11.3% of the Fund’s Net Assets). The Fund’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.


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Scotia Global Growth FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $251,344,220 $245,958,214Cash 2,392,723 1,962,788Accrued investment income 306,718 401,782Receivable for securities sold 49,013 –Subscriptions receivable 30,535 5,671

254,123,209 248,328,455

LIABILITIESPayable for securities purchased 465,295 –Distributions payable – 41Redemptions payable 22,154 8,779Accrued expenses 99,512 159,489

586,961 168,309

Net Assets $253,536,248 $248,160,146

NET ASSETS PER CLASSClass A Units $ 80,774,878 $ 67,039,802Advisor Class Units $ 27,736 $ 13,746Class I Units $172,733,634 $181,106,598

UNITS OUTSTANDINGClass A Units 2,952,775 3,013,665Advisor Class Units 1,014 618Class I Units 6,146,898 7,900,102

NET ASSETS PER UNITClass A Units $ 27.36 $ 22.25Advisor Class Units $ 27.36 $ 22.25Class I Units $ 28.10 $ 22.92


2009 2008INVESTMENT INCOMEDividends $ 5,583,936 $ 8,416,018Interest 435,543 398,363Securities lending 39,566 107,461Foreign withholding taxes/Tax reclaims (757,157) (617,759)

5,301,888 8,304,083



1,941,879 2,338,015


Net realized gain (loss) on investments sold (24,700,673) (29,440,354)Net realized gain (loss) on foreign exchange (372,345) 295,835Transaction costs (204,091) (242,935)Change in unrealized appreciation (depreciation) of investments 79,898,329 (77,234,969)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 15,314,503 $ (32,790,072)Advisor Class Units $ 4,990 $ (5,119)Class I Units $ 42,661,736 $ (67,861,164)


Class A Units $ 5.10 $ (10.63)Advisor Class Units $ 5.33 $ (17.77)Class I Units $ 5.78 $ (10.09)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 67,039,802 $ 104,687,459Advisor Class Units 13,746 –Class I Units 181,106,598 184,213,507

248,160,146 288,900,966

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 15,314,503 (32,790,072)Advisor Class Units 4,990 (5,119)Class I Units 42,661,736 (67,861,164)

57,981,229 (100,656,355)


Class I Units (3,443,035) (2,153,249)


Class A Units 6,322,936 7,956,956Advisor Class Units 9,000 18,865Class I Units 13,861,607 76,325,422

Reinvested distributionsClass I Units 3,443,035 2,153,208


(49,162,092) 62,068,784

INCREASE (DECREASE) IN NET ASSETSClass A Units 13,735,076 (37,647,657)Advisor Class Units 13,990 13,746Class I Units (8,372,964) (3,106,909)

5,376,102 (40,740,820)

NET ASSETS – END OF PERIODClass A Units 80,774,878 67,039,802Advisor Class Units 27,736 13,746Class I Units 172,733,634 181,106,598

$253,536,248 $ 248,160,146


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Scotia Global Growth Fund (Continued)



AverageCost ($)

FairValue ($)

EQUITIES – 99.1%Australia – 1.0%

379,769 Brambles Limited 3,806,686 2,416,040

Belgium – 1.7%44,286 Groupe Bruxelles Lambert SA 4,954,764 4,371,060

Bermuda – 0.8%73,869 Seadrill Ltd. 1,641,151 1,962,935

Brazil – 6.8%293,800 BM&F BOVESPA SA 2,250,355 2,168,612216,982 Itau Unibanco Holding SA ADR 3,368,336 5,198,088130,000 OGX Petroleo e Gas Participacoes SA 1,233,843 1,331,638117,900 Petroleo Brasileiro SA ADR Non-Voting 3,507,170 5,237,799126,900 Vale SA ADR 2,406,148 3,306,610

12,765,852 17,242,747

Canada – 2.1%78,316 Ritchie Bros. Auctioneers Incorporated 1,860,728 1,844,907

8,361 Fairfax Financial Holdings Limited 2,900,295 3,424,309

4,761,023 5,269,216

China – 2.7%1,018,000 China National Building Material Company Ltd. 1,891,278 2,177,272

47,900 Shanda Interactive Entertainment Ltd. 2,622,399 2,625,53342,200 SINA Corporation 1,597,273 1,996,206

6,110,950 6,799,011

Denmark – 1.0%277 AP Moeller – Maersk A/S 3,088,115 2,031,360

13,265 Jyske Bank AS 514,808 541,470

3,602,923 2,572,830

Egypt – 0.6%312,400 Egyptian Financial Group-Hermes Holding 1,926,814 1,488,291

France – 1.5%31,916 Electricite de France SA 2,831,642 1,991,82930,252 Essilor International SA 1,897,696 1,888,878

4,729,338 3,880,707

Germany – 2.2%72,789 Celesio AG 4,572,567 1,950,54326,400 Deutsche Boerse AG 2,270,547 2,298,83924,393 SAP AG 1,359,741 1,209,523

8,202,855 5,458,905

Hong Kong – 1.6%231,500 China Mobile Limited 3,514,994 2,266,18193,800 Hong Kong Exchanges & Clearing Limited 1,319,146 1,753,708

4,834,140 4,019,889

Ireland – 0.9%48,600 CRH PLC 1,394,897 1,380,687

127,753 Dragon Oil PLC 831,477 841,884

2,226,374 2,222,571

Israel – 0.9%36,900 Teva Pharmaceutical Industries Ltd. ADR 1,649,727 2,177,222

Japan – 6.6%151,500 Asahi Breweries Ltd. 2,458,064 2,919,39334,750 Canon Inc. 1,958,003 1,543,624

861 Japan Tobacco Inc. 3,713,513 3,052,61092,400 Kao Corporation 2,694,919 2,266,55995,400 Mitsui Sumitomo Insurance Group Holdings Inc. 4,009,077 2,544,10552,000 Olympus Corporation 869,868 1,755,64419,800 ROHM Co., Ltd. 1,168,875 1,359,96390,200 Yamaha Motor Co., Ltd. 1,192,531 1,190,209

18,064,850 16,632,107


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Mexico – 2.0%

63,222 America Movil SAB de CV, Series L, ADR 3,043,244 3,114,787441,600 Wal-Mart de Mexico SAB de CV, Series V 1,490,794 2,063,654

4,534,038 5,178,441

Netherlands – 1.2%239,600 Reed Elsevier NV 3,849,476 3,083,329

Russia – 1.6%156,650 OAO Gazprom, Sponsored ADR 6,560,570 4,101,145

Singapore – 2.2%496,500 DBS Group Holdings Limited 5,293,910 5,668,660

South Africa – 3.4%153,888 Naspers Limited, N Shares 3,388,071 6,519,224142,749 Standard Bank Group Limited 1,807,369 2,053,454

5,195,440 8,572,678

South Korea – 1.1%7,850 Samsung Electronics Co., Ltd. GDR 1,905,438 2,842,759

Sweden – 4.7%255,979 Atlas Copco AB, Class B 4,217,568 3,485,290109,735 Investor AB, Class B 2,848,851 2,129,201212,761 Svenska Handelsbanken AB 5,710,587 6,386,742

12,777,006 12,001,233

Switzerland – 8.2%111,500 ABB Limited 2,992,715 2,237,35689,130 Compagnie Financiere Richemont AG 2,730,805 3,129,06342,500 Gam Holding Ltd. 669,877 542,59242,500 Julius Baer Group Ltd. 2,310,877 1,557,33794,752 Nestle SA 4,102,934 4,829,71178,441 Schindler Holdings AG 5,355,311 6,313,646

138,864 UBS AG 5,627,493 2,238,130

23,790,012 20,847,835

Taiwan – 0.9%199,696 Taiwan Semiconductor Manufacturing Company Ltd. ADR 2,191,612 2,397,233

Turkey – 1.2%115,200 Anadolu Efes Biracilik ve Malt Sanayii AS 1,364,471 1,352,521391,900 Turkiye Garanti Bankasi AS 1,156,713 1,744,279

2,521,184 3,096,800

United Kingdom – 9.8%117,700 Aggreko PLC 1,392,775 1,840,78385,057 British American Tobacco PLC 3,200,980 2,899,017

225,060 Bunzl PLC 2,982,229 2,563,409352,250 Cairn Energy PLC 1,831,303 1,972,254292,027 HSBC Holdings PLC 3,767,759 3,501,460156,800 Man Group PLC 2,059,460 810,366243,000 Prudential PLC 2,428,641 2,600,801295,907 Rolls-Royce Group PLC 3,069,454 2,426,143

17,754,420 Rolls-Royce Group PLC, C Shares – 30,129939,227 Vodafone Group PLC 3,303,871 2,285,096192,033 Wolseley PLC 7,838,459 4,036,151

31,874,931 24,965,609

United States – 32.4%24,600 AGCO Corporation 1,566,258 835,54569,728 Altria Group, Inc. 1,559,216 1,436,81521,404 Amazon.com, Inc. 1,425,896 3,023,963

2,700 Baidu Inc. 1,249,192 1,166,12034,300 Bed Bath & Beyond Inc. 1,077,138 1,391,597

1,000 Berkshire Hathaway Inc., Class B 4,335,344 3,450,09797,700 Cisco Systems, Inc. 1,908,083 2,456,48131,759 Deere & Company 2,421,051 1,801,83989,418 eBay Inc. 3,173,329 2,210,68149,259 EOG Resources, Inc. 4,391,557 5,033,765


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AverageCost ($)

FairValue ($)

EQUITIES (cont’d)United States (cont’d)

5,950 Google Inc. 2,784,376 3,874,265161,390 International Game Technology 2,066,964 3,181,52640,300 Johnson & Johnson 2,614,441 2,722,78430,100 M&T Bank Corporation 1,814,429 2,114,571

7,486 Markel Corporation 3,364,804 2,666,93921,300 Medco Health Solutions, Inc. 1,083,285 1,429,69449,828 Microchip Technology Incorporated 1,850,473 1,520,77122,700 Mohawk Industries, Inc. 1,149,518 1,134,82149,395 Moody’s Corporation 3,633,374 1,390,31226,826 National-Oilwell Varco Inc. 2,017,475 1,242,19790,230 New York Community Bancorp 1,081,431 1,375,03363,394 Omnicom Group Inc. 3,507,537 2,606,60162,211 Patterson Companies, Inc. 2,536,420 1,828,14079,771 PepsiCo, Inc. 5,820,858 5,091,30267,728 Philip Morris International Inc. 3,607,318 3,423,56625,703 Praxair, Inc. 1,918,736 2,167,94478,618 Progressive Corporation, The 1,704,020 1,483,76434,538 Schlumberger Limited 2,658,318 2,361,05528,100 Varian Medical Systems, Inc. 1,140,187 1,381,46444,400 Wal-Mart Stores, Inc. 2,537,153 2,491,511

179,692 Walgreen Co. 7,580,252 6,922,33533,900 Walt Disney Company, The 1,024,827 1,148,21772,131 WellPoint Inc. 5,765,938 4,408,99545,600 Whole Foods Markets, Inc. 907,543 1,300,257

87,276,741 82,074,967



NET ASSETS – 100.0% 253,536,248




Australia 1.0 1.3Belgium 1.7 2.1Bermuda 0.8 0.3Brazil 6.8 4.3Canada 2.1 1.3China 2.7 1.6Denmark 1.0 0.9Egypt 0.6 0.3France 1.5 2.0Germany 2.2 2.3Hong Kong 1.6 2.8Ireland 0.9 0.7Israel 0.9 1.0Japan 6.6 6.7Luxembourg – 0.1Mexico 2.0 1.9Netherlands 1.2 1.3Russia 1.6 1.7Singapore 2.2 1.7South Africa 3.4 3.4South Korea 1.1 –Sweden 4.7 4.0Switzerland 8.2 10.7Taiwan 0.9 1.0Turkey 1.2 –United Kingdom 9.8 10.6United States 32.4 35.1




(Level 2) ($)



Equities 115,537,256 135,806,964 – 251,344,220



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A. Risk managementThe investment objective of the Scotia Global Growth Fund (the “Fund”) islong-term capital growth. It invests primarily in a broad range of equitysecurities of companies around the world.




CurrencyFinancial




U.S. Dollar 120,341,566 – 120,341,566 47.5British Pound 25,807,493 – 25,807,493 10.2Swiss Franc 20,847,835 – 20,847,835 8.2European Euro 18,213,779 – 18,213,779 7.2Japanese Yen 16,632,107 – 16,632,107 6.6Swedish Krona 12,001,233 – 12,001,233 4.7South African Rand 8,572,680 – 8,572,680 3.4Hong Kong Dollar 6,197,161 – 6,197,161 2.4Singapore Dollar 5,668,659 – 5,668,659 2.2Brazilian Real 3,500,250 – 3,500,250 1.4Turkish Lira 3,096,800 – 3,096,800 1.2Danish Krone 2,572,829 – 2,572,829 1.0Australian Dollar 2,416,040 – 2,416,040 1.0Mexican Peso 2,063,654 – 2,063,654 0.8Norwegian Krone 1,962,935 – 1,962,935 0.8Egyptian Pound 1,488,291 – 1,488,291 0.6

Total 251,383,312 – 251,383,312 99.2

December 31, 2008

CurrencyFinancial




U.S. Dollar 114,993,030 – 114,993,030 46.3Swiss Franc 26,579,644 – 26,579,644 10.7British Pound 26,255,906 – 26,255,906 10.6European Euro 21,136,692 – 21,136,692 8.5Japanese Yen 16,641,380 – 16,641,380 6.7Swedish Krona 10,041,048 – 10,041,048 4.0Hong Kong Dollar 9,940,103 – 9,940,103 4.0South African Rand 8,314,401 – 8,314,401 3.4Singapore Dollar 4,333,113 – 4,333,113 1.7Australian Dollar 3,126,484 – 3,126,484 1.3Danish Krone 2,109,535 – 2,109,535 0.9Mexican Peso 1,722,137 – 1,722,137 0.7Norwegian Krone 826,221 – 826,221 0.3Egyptian Pound 672,090 – 672,090 0.3

Total 246,691,784 – 246,691,784 99.4







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital International WorldIndex, as of December 31, 2009, with all other variables held constant, wouldresult in an increase or decrease of approximately $53,749,685, 21.2% of theFund’s Net Assets (December 31, 2008-$26,071,571, 10.5% of the Fund’s NetAssets). The Fund’s historical sensitivity measure may not be representative ofits future sensitivity measure, and accordingly, the impact on Net Assets couldbe materially different.


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Scotia Global Small Cap FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $37,192,693 $83,866,246Cash 1,074,316 1,747,473Accrued investment income 14,597 107,622Subscriptions receivable 625 498

38,282,231 85,721,839

LIABILITIESDistributions payable – 1,424Accrued expenses 4,932 12,314

4,932 13,738

Net Assets $38,277,299 $85,708,101

NET ASSETS PER CLASSClass A Units $ 2,190,402 $ 1,887,194Class I Units $36,086,897 $83,820,907

UNITS OUTSTANDINGClass A Units 374,816 351,521Class I Units 6,116,016 15,382,809



2009 2008INVESTMENT INCOMEDividends $ 1,586,347 $ 1,838,211Interest 41,810 226,561Capital gains distributions received – 869Foreign withholding taxes/Tax reclaims (167,783) (222,366)

1,460,374 1,843,275



163,021 191,295





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 215,127 $ (1,367,890)Class I Units $ 8,846,515 $(41,519,455)


Class A Units $ 0.59 $ (3.80)Class I Units $ 0.70 $ (3.56)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 1,887,194 $ 3,463,208Class I Units 83,820,907 92,385,575

85,708,101 95,848,783

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 215,127 (1,367,890)Class I Units 8,846,515 (41,519,455)

9,061,642 (42,887,345)


Class A Units (37,308) –Class I Units (1,395,079) (1,741,498)

(1,432,387) (1,741,498)


Class A Units 389,271 323,594Class I Units 6,712,348 44,044,735

Reinvested distributionsClass A Units 37,212 –Class I Units 1,395,079 1,740,074

Payments on redemptionClass A Units (301,094) (531,718)Class I Units (63,292,873) (11,088,524)

(55,060,057) 34,488,161

INCREASE (DECREASE) IN NET ASSETSClass A Units 303,208 (1,576,014)Class I Units (47,734,010) (8,564,668)

(47,430,802) (10,140,682)


$ 38,277,299 $ 85,708,101


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Scotia Global Small Cap Fund (Continued)



AverageCost ($)

FairValue ($)


378,000 Boart Longyear Group 123,947 124,78777,500 IOOF Holdings Limited 295,822 439,503

9,500 JB Hi-Fi Limited 81,058 200,652164,000 Minara Resources Limited 152,411 123,50617,600 Mineral Resources Ltd. 109,164 115,783

762,402 1,004,231

Bermuda – 0.7%2,800 Axis Capital Holdings Limited 104,677 83,5462,400 Enstar Group Ltd. 203,642 174,754

308,319 258,300

Canada – 6.2%27,900 Alimentation Couche-Tard Inc., Class B 533,649 578,92541,100 Capstone Mining Corp. 122,279 115,49114,300 Cascades Inc. 105,936 127,842

4,000 Constellation Software Inc. 108,281 146,0003,800 Dorel Industries Inc., Class B 105,398 122,3223,000 Franco-Nevada Corporation 78,684 84,2403,200 Home Capital Group Inc. 104,975 133,4088,000 IAMGOLD Corporation 83,968 131,9209,000 Laurentian Bank of Canada 343,679 383,580

61,800 Lundin Mining Corporation 195,071 263,88645,800 Western Coal Corporation 141,139 148,850

9,300 Westshore Terminals Income Fund 120,338 132,432

2,043,397 2,368,896

Denmark – 0.3%2,000 NKT Holdings A/S 131,560 116,634

Finland – 0.4%33,700 Raisio Group PLC, Class V 82,830 134,554

France – 3.5%2,800 Boiron SA 111,245 125,1963,800 Legrand Promesses 113,515 111,1326,500 Rubis 466,558 597,9612,100 SEB SA 127,572 124,7731,700 Societe BIC SA 119,695 123,4013,700 Technip 258,773 271,922

1,197,358 1,354,385

Germany – 2.6%10,900 Aixtron AG 279,136 382,688

2,500 Hannover Rueckversicherung AG 111,762 123,525500 KWS Saat AG 79,462 89,999

1,558 Schaltbau Holding AG 85,527 91,5211,100 Software AG 91,027 126,378

600 Vossloh AG 79,532 62,6924,300 Wuestenrot & Wuerttemberg AG 114,187 108,466

840,633 985,269

Hong Kong – 3.3%499,000 Chow Sang Sang Holdings International Limited 531,830 625,523322,000 Galaxy Entertainment Group Limited 100,432 138,240431,000 Geely Automobile Holdings Limited 88,013 246,323248,000 Skyworth Digital Holdings Limited 106,511 266,472

826,786 1,276,558

Italy – 3.1%20,700 Ansaldo STS SpA 372,569 411,940

8,600 Azimut Holding SpA 117,274 120,4019,500 Banca Generali SpA 100,207 120,686

10,800 David Campari-Miland SpA 90,051 118,008111,400 Maire Tecnimont SpA 560,188 415,056

1,240,289 1,186,091


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Japan – 9.8%

14,000 Central Glass Co., Ltd. 62,141 56,1659,600 Century Tokyo Leasing Corp. 93,120 106,484

56,000 Chubu Shiryo Co., Ltd. 531,119 565,50033,000 Chuetsu Pulp & Paper Co., Ltd. 96,473 59,29515,500 cocokara fine HOLDINGS Inc. 298,845 295,48842,000 Daiichikosho Company Limited 447,913 496,49316,000 Hitachi Capital Corporation 180,135 203,22917,000 INES Corporation 112,587 137,75026,000 Kaken Pharmaceutical Co., Ltd. 234,307 231,48920,000 Keihanshin Real Estate Co., Ltd. 79,428 96,321

5,000 Kyorin Co., Ltd. 87,079 76,7378,000 Kyowa Exeo Corporation 85,217 70,870

155 MID Real Estate Investment Trust, Inc. 513,557 342,52262,000 Nippo Corporation 590,216 464,708

1,000 Okinawa Electric Power Co., Inc. 82,897 55,8024,800 Ricoh Leasing Co. Ltd 115,834 99,612

24,200 UNIPRES CORPORATION 223,974 401,076

3,834,842 3,759,541

Netherlands – 0.4%17,400 James Hardie Industries NV 132,635 137,780

Portugal – 0.3%28,113 Redes Energeticas Nacionais SA 113,470 126,652

Spain – 3.5%14,500 Banco De Sabadell SA 109,726 84,469

769 Construcciones y Auxiliar de Ferrocarriles SA 340,046 432,6744,800 Corporacion Financiera Alba, SA 299,981 263,7202,600 Duro Felguera SA 30,020 27,9925,000 Grupo Catalana Occidente, SA 127,423 117,584

11,200 Obrascon Huarte Lain SA 331,666 315,4853,700 Viscofan SA 87,173 98,459

1,326,035 1,340,383

Sweden – 0.3%7,100 JM AB 129,460 127,232

Switzerland – 3.6%1,000 Allreal Holding AG 128,125 124,7882,500 Bank Sarasin & Cie AG, Class B 115,779 99,128

400 Helvetia Holding AG 163,957 129,6172,100 PSP Swiss Property AG 118,647 124,682

900 Schweiter Technologies AG-BR 510,762 495,868161,300 Swisslog Holding AG 135,999 142,411

8,100 Vontobel Holding AG 289,536 242,727

1,462,805 1,359,221

United Kingdom – 7.9%22,000 Amlin PLC 153,895 132,710

103,400 Barratt Developments PLC 265,973 217,17024,600 Bellway PLC 355,493 339,22716,700 Bovis Homes Group PLC 134,597 122,386

6,100 Chemring Group PLC 262,872 301,58512,300 CSR PLC 102,730 84,710

281,200 Debenhams PLC 435,555 368,43491,000 Dimension Data Holdings PLC 114,313 114,233

138,200 GAME GROUP PLC 378,740 248,38744,400 Micro Focus International PLC 239,887 343,01052,300 Pace PLC 183,757 185,26377,800 Paragon Group Companies PLC 207,860 172,77080,000 Tullett Prebon PLC 559,316 374,368

3,394,988 3,004,253

United States – 48.7%17,400 Actuate Corporation 74,859 77,666

3,000 Aeropostale, Inc. 86,935 107,2848,800 Alkermes, Inc. 122,514 86,415


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FairValue ($)


1,900 Allied World Assurance Company Holdings, Ltd. 88,794 91,8923,700 American Physicians Service Group, Inc. 85,318 89,454

10,300 American Reprographics Company 138,813 75,83214,800 Approach Resources Inc. 121,431 119,532

5,800 Arrow Electronics, Inc. 208,259 180,3693,700 Bally Technologies Inc. 83,850 160,4518,000 Bare Escentuals, Inc. 85,037 102,001

13,000 Cabot Corporation 329,500 358,1269,500 CKE Restaurants, Inc. 87,672 84,3095,600 CNA Surety Corporation 110,576 87,574

42,300 Compuware Corporation 429,312 321,1982,800 Concho Resources Inc. 112,206 132,0384,000 Coventry Health Care, Inc. 252,561 101,833

10,800 Crown Holdings, Inc. 259,837 290,1489,700 DaVita, Inc. 553,700 597,801

13,998 Deltek, Inc. 66,259 114,0837,500 Digi International Inc. 83,525 71,8372,300 Emergency Medical Services Corporation 118,224 130,5877,600 Endo Pharmaceutical Holdings Inc. 183,899 163,550

19,800 EnerSys 482,249 453,7478,600 Esterline Technologies Corporation 409,999 367,5207,100 EZCORP, Inc. 135,651 127,7352,200 FactSet Research Systems Inc. 135,620 151,8738,900 Frontier Oil Corporation 181,649 112,541

20,800 GameStop Corp. 787,573 479,28512,900 GenCorp Inc. 111,580 94,56737,235 Glatfelter 499,252 474,74912,200 Global Industries Ltd. 110,457 91,229

6,300 Graham Corporation 120,312 136,43415,500 Great Lakes Dredge & Dock Company 111,645 105,16213,300 Harris Corporation 711,107 664,19611,300 Health Net Inc. 548,192 276,403

9,000 Heartland Payment Systems, Inc. 90,400 123,92010,800 Hi-Tech Parmacal Co., Inc. 95,862 317,597

6,100 Hospitality Properties Trust 82,820 151,8996,700 Interactive Intelligence, Inc. 77,900 128,983

37,600 Jabil Circuit, Inc. 564,009 685,9332,600 Jos. A. Bank Clothiers, Inc. 115,346 114,8523,900 KBR, Inc. 121,776 77,8243,700 Lincare Holdings Inc. 127,692 144,1683,800 M&F Worldwide Corp. 119,403 157,6031,800 MEMC Electronic Materials, Inc. 118,055 25,729

15,500 Mentor Graphics Corporation 158,437 142,76610,049 Michael Baker Corporation 357,211 435,880

3,900 Multi-Fineline Electronix, Inc. 89,144 115,9583,900 Myriad Genetics, Inc. 106,220 106,619

30,572 Nelnet, Inc. 488,880 551,6211,000 NewMarket Corporation 116,921 120,233

42,700 Omnova Solutions Inc. 108,027 274,0084,800 Par Pharmaceutical Companies Inc. 114,541 136,415

28,800 Pep Boys -Manny, Moe & Jack 326,352 255,8923,600 Plantronics, Inc. 101,990 98,1902,900 Platinum Underwriters Holdings, Ltd 92,199 116,6213,700 PriceSmart, Inc. 81,788 78,7684,100 Progress Software Corporation 132,405 125,7804,600 Quaker Chemical Corporation 113,769 99,715

90,325 Retail Ventures, Inc. 380,028 841,4452,000 Rock-Tenn Company 108,256 105,887

13,000 SanDisk Corporation 295,053 395,8096,300 SkyWest Inc. 109,932 111,357

21,800 SonicWALL, Inc. 124,736 172,40410,500 Sport Supply Group Inc. 93,763 138,83839,830 Standard Motor Products, Inc. 613,272 355,569

1,700 Stepan Company 114,840 115,71431,400 Sun Healthcare Group, Inc. 422,016 300,43025,200 Symyx Technologies, Inc. 146,194 145,301


AverageCost ($)

FairValue ($)


7,300 Syniverse Holdings Inc. 121,196 133,78736,100 TechTeam Global, Inc. 384,363 287,769

7,000 Teletech Holdings, Inc. 87,506 147,18324,600 Temple-Inland Inc. 355,515 545,404

8,300 Tesoro Corporation 138,390 118,1173,500 Tessera Technologies Inc. 98,958 85,354

11,100 Tidewater Inc. 670,926 558,41012,500 Transatlantic Holdings Inc. 828,996 683,847

9,100 U.S. Physical Therapy, Inc. 146,456 161,4234,800 Unitrin, Inc. 87,939 111,1594,600 Universal Health Services, Inc., Class B 136,972 147,351

14,100 Vishay Intertechnology, Inc. 92,525 123,65218,700 Watson Pharmaceuticals, Inc. 518,868 777,145

2,200 Weis Markets, Inc. 90,692 83,85029,300 Zoran Corp. 385,967 339,113

18,482,873 18,652,713



NET ASSETS – 100.0% 38,277,299




Australia 2.6 2.6Belgium – 0.2Bermuda 0.7 2.0Canada 6.2 4.2Denmark 0.3 –Finland 0.4 0.2France 3.5 4.9Germany 2.6 1.1Hong Kong 3.3 1.6Italy 3.1 1.1Japan 9.8 12.7Liberia – 0.1Netherlands 0.4 –Portugal 0.3 0.4Singapore – 1.2Spain 3.5 1.3Sweden 0.3 2.8Switzerland 3.6 3.1United Kingdom 7.9 7.8United States 48.7 50.6




(Level 2) ($)



Equities 21,133,909 16,058,784 – 37,192,693



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A. Risk managementThe investment objective of the Scotia Global Small Cap Fund (the “Fund”) islong-term capital growth. It invests primarily in equity securities of smallercompanies located around the world.




CurrencyFinancial




U.S. Dollar 19,301,158 – 19,301,158 50.4European Euro 5,155,850 – 5,155,850 13.5Japanese Yen 3,916,210 – 3,916,210 10.2British Pound 3,267,025 – 3,267,025 8.5Swiss Franc 1,363,467 – 1,363,467 3.6Hong Kong Dollar 1,276,735 – 1,276,735 3.3Australian Dollar 1,142,475 – 1,142,475 3.0Swedish Krona 136,151 – 136,151 0.4Danish Krone 123,959 – 123,959 0.3Norwegian Krone 250 – 250 0.0Singapore Dollar 163 – 163 0.0

Total 35,683,443 – 35,683,443 93.2

December 31, 2008

CurrencyFinancial




U.S. Dollar 45,212,699 – 45,212,699 52.7Japanese Yen 10,991,331 – 10,991,331 12.8European Euro 7,911,880 – 7,911,880 9.2British Pound 6,780,487 – 6,780,487 7.9Swiss Franc 2,708,641 – 2,708,641 3.2Swedish Krona 2,406,853 – 2,406,853 2.8Australian Dollar 2,279,681 – 2,279,681 2.7Hong Kong Dollar 1,361,648 – 1,361,648 1.6Singapore Dollar 1,033,934 – 1,033,934 1.2

Total 80,687,154 – 80,687,154 94.1







F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, S&P/Citigroup World Extended MarketIndex, as of December 31, 2009, with all other variables held constant, wouldresult in an increase or decrease of approximately $6,966,468, 18.2% of theFund’s Net Assets (December 31, 2008-$8,889,822, 10.4% of the Fund’s NetAssets). The Fund’s historical sensitivity measure may not be representative ofits future sensitivity measure, and accordingly, the impact on Net Assets couldbe materially different.


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Scotia Global Opportunities FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $66,752,597 $57,674,202Cash 1,281,871 2,585,510Accrued investment income 271,980 210,917Receivable for securities sold 1,019,206 –Subscriptions receivable 2,301 17,143Receivable for currency forward contracts 24,469 –

69,352,424 60,487,772

LIABILITIESPayable for securities purchased 500,914 –Redemptions payable 3,382 –Accrued expenses 9,241 20,795Payable for currency forward contracts – 15,499

513,537 36,294

Net Assets $68,838,887 $60,451,478

NET ASSETS PER CLASSClass A Units $ 5,363,835 $ 4,428,519Advisor Class Units $ 14,639 $ 11,792Class F Units $ 20,625 $ 5,103Class I Units $63,439,788 $56,006,064

UNITS OUTSTANDINGClass A Units 725,925 737,902Advisor Class Units 2,039 2,021Class F Units 2,855 831Class I Units 8,541,903 9,237,104

NET ASSETS PER UNITClass A Units $ 7.39 $ 6.00Advisor Class Units $ 7.18 $ 5.83Class F Units $ 7.22 $ 6.14Class I Units $ 7.43 $ 6.06



2,160,409 2,224,724EXPENSESManagement fees (note 4) 103,187 118,157Audit fees 17,533 14,280Independent Review Committee fees 70 65Custodian fees 9,411 24,312Filing fees 29,738 16,321Legal fees 7,150 7,133Unitholder reporting costs 9,282 11,063Unitholder administration, service fees and GST 58,022 60,219


199,129 225,567Net investment income (loss) 1,961,280 1,999,157Net realized gain (loss) on investments sold (11,861,355) (9,836,113)Net realized gain (loss) on currency forwards 10,151 604,371Net realized gain (loss) on foreign exchange (379,629) (220,952)Transaction costs (123,194) (135,123)Change in unrealized appreciation (depreciation) of investments 25,955,436 (19,882,867)Change in unrealized appreciation (depreciation) of currency forwards 39,968 (28,548)Net gain (loss) on investments and transaction costs 13,641,377 (29,499,232)Increase (decrease) in Net Assets from operations $ 15,602,657 $(27,500,075)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 1,054,626 $ (2,415,098)Advisor Class Units $ 2,847 $ (5,073)Class F Units $ (139) $ (2,820)Class I Units $ 14,545,323 $(25,077,084)INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 1.44 $ (3.61)Advisor Class Units $ 1.41 $ (6.25)Class F Units $ (0.12) $ (3.44)Class I Units $ 1.63 $ (3.26)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 4,428,519 $ 4,566,187Advisor Class Units 11,792 –Class F Units 5,103 7,923Class I Units 56,006,064 60,687,845

60,451,478 65,261,955

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 1,054,626 (2,415,098)Advisor Class Units 2,847 (5,073)Class F Units (139) (2,820)Class I Units 14,545,323 (25,077,084)

15,602,657 (27,500,075)


Class A Units (43,928) (10,118)Advisor Class Units (126) (288)Class F Units (628) (65)Class I Units (1,929,817) (1,832,562)

(1,974,499) (1,843,033)


Class A Units 547,460 3,113,757Advisor Class Units – 16,865Class F Units 20,100 –Class I Units 5,929,132 25,415,161

Reinvested distributionsClass A Units 43,928 10,111Advisor Class Units 126 288Class F Units 628 65Class I Units 1,929,817 1,832,562

Payments on redemptionClass A Units (666,770) (836,320)Class F Units (4,439) –Class I Units (13,040,731) (5,019,858)

(5,240,749) 24,532,631

INCREASE (DECREASE) IN NET ASSETSClass A Units 935,316 (137,668)Advisor Class Units 2,847 11,792Class F Units 15,522 (2,820)Class I Units 7,433,724 (4,681,781)

8,387,409 (4,810,477)

NET ASSETS – END OF PERIODClass A Units 5,363,835 4,428,519Advisor Class Units 14,639 11,792Class F Units 20,625 5,103Class I Units 63,439,788 56,006,064

$ 68,838,887 $ 60,451,478


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AverageCost ($)

FairValue ($)

EQUITIES – 87.5%Austria – 2.1%

36,700 Erste Group Bank AG 1,733,662 1,426,729Bermuda – 9.6%

72,895 Dockwise Ltd. 3,336,151 2,371,651285,056 Global Crossing Ltd. 4,096,695 4,245,228

7,432,846 6,616,879China – 0.9%

224,750 China Merchants Bank Co., Ltd., Class H 446,791 612,320Germany – 0.5%

7,900 E.ON AG 257,322 344,477Hong Kong – 4.8%

220,500 China Mobile Limited 2,654,129 2,158,5012,186,000 China Resources Cement Holding Limited 1,165,154 1,131,774

3,819,283 3,290,275Israel – 5.2%

60,200 Teva Pharmaceutical Industries Ltd. ADR 2,895,743 3,551,999Italy – 2.2%

58,300 Eni SpA 1,939,159 1,556,677Japan – 2.3%

137,000 Tokyo Steel Manufacturing Co., Ltd. 1,744,315 1,619,512Luxembourg – 1.0%

8,800 Millicom International Cellular SA 627,974 681,800Netherlands – 3.2%

214,300 ING Groep NV 2,084,562 2,172,746Russia – 2.6%

67,800 OAO Gazprom, Sponsored ADR 2,075,700 1,775,025Switzerland – 6.5%

17,312 Bachem Holding AG, Class B 1,544,728 1,165,50937,700 Liechtensteinische Landesbank AG 2,584,984 2,636,372

3,900 Roche Holdings AG 642,061 696,0824,771,773 4,497,963


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)United Kingdom – 3.2%

337,225 Telecity Group PLC 1,294,730 2,181,833United States – 43.4%

49,800 Amdocs Limited 1,160,779 1,492,196243,436 Apollo Investment Corporation 1,735,148 2,436,53341,300 Crown Castle International Corp. 853,563 1,692,079

216,100 Dell Inc. 4,441,576 3,259,14657,525 Eclipsys Corporation 1,216,011 1,115,882

153,900 Fifth Third Bancorp 1,164,087 1,564,6191,900 Google Inc. 863,098 1,237,160

80,400 Hartford Financial Services Group, Inc., The 1,667,931 1,964,085950 Huntington Bancshares 8.50% Preferred, Series A 595,916 833,115

178,900 KKR Financial Holdings LLC 1,035,026 1,086,007482,583 Level 3 Communications, Inc. 1,391,386 750,116173,000 Prospect Capital Corporation 1,652,855 2,143,990136,600 Spirit AeroSystems Holdings Inc. 2,276,679 2,846,34151,800 SVB Financial Group 1,262,282 2,265,89332,633 United States Steel Corporation 1,719,870 1,889,12617,700 Walgreen Co. 574,338 681,86395,300 Willis Group Holdings Limited 2,933,542 2,638,353

26,544,087 29,896,504TOTAL EQUITIES 57,667,947 60,224,739

BONDS AND DEBENTURES – 9.5%8,020,000 Swiss Re Capital I LP

6.85% due May 25, 2016 3,386,366 6,527,858TOTAL INVESTMENT PORTFOLIO 61,054,313 66,752,597

Currency Forward Contracts – 0.0% 24,469OTHER ASSETS, LESS LIABILITIES – 3.0% 2,061,821NET ASSETS – 100.0% 68,838,887





December 31, 2009 ($)


(Depreciation)Feb. 22, 2010 U.S. Dollar 2,756,000 European Euro 1,956,900 2,942,199 (47,697)Apr. 6, 2010 U.S. Dollar 2,597,965 Swiss Franc 2,700,000 2,740,748 (12,223)Jun. 10, 2010 Japanese Yen 8,100,000 U.S. Dollar 89,227 93,643 (2,258)Jun. 10, 2010 U.S. Dollar 1,658,878 Japanese Yen 146,600,000 1,655,597 86,647

24,469



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Australia – 2.7Austria 2.1 –Bermuda 9.6 3.9Canada – 4.6China 0.9 2.3Finland – 3.2Germany 0.5 –Greece – 3.7Hong Kong 4.8 3.9India – 2.3Israel 5.2 3.5Italy 2.2 3.7Japan 2.3 –Luxembourg 1.0 3.3Netherlands 3.2 –Russia 2.6 2.0Spain – 3.8Switzerland 6.5 13.4United Kingdom 3.2 1.0United States 43.4 31.6Bonds and Debentures 9.5 6.5Currency Forward Contracts 0.0 0.0




(Level 2) ($)



Equities 38,375,531 21,849,208 – 60,224,739Bonds and Debentures – 6,527,858 – 6,527,858Currency Forward Contracts – 24,469 – 24,469



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A. Risk managementThe investment objective of the Scotia Global Opportunities Fund (the “Fund”)is to achieve long-term capital growth. It invests primarily in a moreconcentrated portfolio of equity securities of companies located around theworld.




CurrencyFinancial




U.S. Dollar 47,000,624 7,244,900 54,245,524 78.8Hong Kong Dollar 3,902,596 – 3,902,596 5.7European Euro 5,500,628 (2,942,199) 2,558,429 3.7Norwegian Krone 2,371,680 – 2,371,680 3.4British Pound 2,181,833 – 2,181,833 3.2Swiss Franc 4,497,963 (2,740,748) 1,757,215 2.5Japanese Yen 1,619,512 (1,561,953) 57,559 0.1Brazilian Real 65 – 65 0.0

Total 67,074,901 – 67,074,901 97.4

December 31, 2008

CurrencyFinancial




U.S. Dollar 34,003,001 7,322,245 41,325,246 68.3European Euro 8,783,095 (3,275,904) 5,507,191 9.1Swiss Franc 8,083,496 (4,046,341) 4,037,155 6.7Hong Kong Dollar 3,757,025 – 3,757,025 6.2Australian Dollar 1,607,621 – 1,607,621 2.7British Pound 585,501 – 585,501 1.0Norwegian Krone 392,191 – 392,191 0.6

Total 57,211,930 – 57,211,930 94.6



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearing

financial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, Net Assets would have decreased orincreased by approximately $155,023, 0.2% of the Fund’s Net Assets. TheFund’s sensitivity to interest rate fluctuations was estimated using the weightedaverage duration of the Fund’s portfolio of bonds. In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.





Less than 1 year – –1-3 years – –3-5 years – –5-10 years 6,527,858 –H 10 years – –

Total 6,527,858 –












Unrated 100.0 0.8 – –

Total 100.0 0.8 – –


F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital International AllCountry World Index, as of December 31, 2009, with all other variables heldconstant, would result in an increase or decrease of approximately $15,695,266,22.8% of the Fund’s Net Assets (December 31, 2008-$5,913,978, 9.8% of theFund’s Net Assets). The Fund’s historical sensitivity measure may not berepresentative of its future sensitivity measure, and accordingly, the impact onNet Assets could be materially different.


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Scotia Global Climate Change FundS T AT E M E N T O F N E T A S S E T SAs at December 31


38,251,685 7,551,414

LIABILITIESPayable for securities purchased – 113,311Redemptions payable 2,914 –Accrued expenses 14,071 14,815

16,985 128,126

Net Assets $38,234,700 $7,423,288

NET ASSETS PER CLASSClass A Units $ 8,260,485 $6,998,639Advisor Class Units $ 423,594 $ 424,649Class I Units $29,550,621 $ –

UNITS OUTSTANDINGClass A Units 1,120,591 1,027,368Advisor Class Units 57,463 62,338Class I Units 3,988,171 –

NET ASSETS PER UNITClass A Units $ 7.37 $ 6.81Advisor Class Units $ 7.37 $ 6.81Class I Units $ 7.41 $ –


2009 2008*INVESTMENT INCOMEDividends $ 353,868 $ 84,495Interest/Overdraft charges (3,469) 6,506Foreign withholding taxes/Tax reclaims (49,416) (12,883)

300,983 78,118



222,404 131,670

Net investment income (loss) 78,579 (53,552)

Net realized gain (loss) on investments sold 84,169 (2,869,291)Net realized gain (loss) on foreign exchange (261,892) 19Transaction costs (33,994) (11,250)Change in unrealized appreciation (depreciation) of investments 787,140 (421,381)

Net gain (loss) on investments and transaction costs 575,423 (3,301,903)

Increase (decrease) in Net Assets from operations $ 654,002 $(3,355,455)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 746,004 $(3,106,366)Advisor Class Units $ 26,230 $ (249,089)Class I Units** $(118,232) $ –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.66 $ (4.40)Advisor Class Units $ 0.46 $ (5.76)Class I Units** $ (0.03) $ –


2009 2008*NET ASSETS – BEGINNING OF PERIODClass A Units $ 6,998,639 $ –Advisor Class Units 424,649 –

7,423,288 –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 746,004 (3,106,366)Advisor Class Units 26,230 (249,089)Class I Units** (118,232) –

654,002 (3,355,455)


Class A Units 2,008,597 10,555,777Advisor Class Units 92,715 806,193Class I Units** 30,079,051 –

Payments on redemptionClass A Units (1,492,755) (450,772)Advisor Class Units (120,000) (132,455)Class I Units** (410,198) –

30,157,410 10,778,743

INCREASE (DECREASE) IN NET ASSETSClass A Units 1,261,846 6,998,639Advisor Class Units (1,055) 424,649Class I Units** 29,550,621 –

30,811,412 7,423,288

NET ASSETS – END OF PERIODClass A Units 8,260,485 6,998,639Advisor Class Units 423,594 424,649Class I Units** 29,550,621 –

$38,234,700 $ 7,423,288

* For the period since Fund start date February 4, 2008.

** Start date September 8, 2009.


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AverageCost ($)

FairValue ($)


65,179 Arrow Energy Ltd. 241,316 253,392

Austria – 1.5%12,742 Oesterreichische Elektrizitatswirtschafts AG 704,561 573,919

Belgium – 0.9%9,656 Umicore 240,229 337,231

Brazil – 5.0%59,100 Aes Tiete SA, Preference 680,332 684,43914,800 Companhia de Saneamento Basico do Estado de Sao Paulo ADR 557,526 606,82948,800 Tractebel Energia SA 533,622 624,552

1,771,480 1,915,820

Denmark – 1.2%6,963 Vestas Wind Systems AS 574,120 446,806

Finland – 1.4%22,500 Lassila & Tikanoja Oyj 514,246 538,239

France – 13.4%15,048 Alstom SA 1,175,181 1,120,54720,840 Electricite de France SA 1,238,336 1,300,59328,220 GDF SUEZ 1,360,061 1,284,018

8,887 Nexans SA 703,841 735,67828,789 Suez Environment Co. 672,660 697,523

5,150,079 5,138,359

Germany – 9.7%6,163 Allianz SE 748,941 808,983

60,991 CENTROTEC Sustainable AG 892,987 864,5987,396 Muenchener Rueckversicherungs-Gesellschaft AG 1,189,061 1,211,4144,526 SMA Solar Technology AG 378,930 634,963

10,393 ZhongDe Waste Technology AG 195,025 188,509

3,404,944 3,708,467

Italy – 0.9%18,230 Prysmian SpA 342,989 334,679

Japan – 7.3%41,300 Bridgestone Corporation 739,474 760,490

9,600 East Japan Railway Company 709,262 636,50669,000 Kubota Corporation 594,921 666,71917,000 Shimano Inc. 777,940 714,943

2,821,597 2,778,658

Netherlands – 1.4%17,062 Koninklijke (Royal) Philips Electronics NV 487,436 529,854

Norway – 1.8%140,189 Tomra Systems ASA 702,785 698,257

Philippines – 1.9%2,073,000 Manila Water Company 744,365 739,358

Singapore – 1.7%250,000 Hyflux Limited 509,625 659,321

Spain – 3.0%4,324 Acciona SA 656,744 589,007

32,355 Gamesa Corporation Tecnologica SA 785,970 568,848

1,442,714 1,157,855

Switzerland – 3.8%45,509 ABB Limited 958,375 913,182

1,795 Syngenta AG 464,628 527,727

1,423,003 1,440,909

United Kingdom – 3.0%237,430 eaga PLC 608,028 575,50182,113 FirstGroup PLC 588,190 588,548

1,196,218 1,164,049


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)United States – 39.8%

29,122 AGCO Corporation 946,377 989,13649,519 CA, Inc. 1,147,904 1,168,09050,278 Calgon Carbon Corporation 819,722 733,98528,307 Cameco Corporation 775,550 956,40021,910 Cisco Systems, Inc. 546,387 550,88526,099 Convanta Holding Corporation 539,441 494,76110,239 Deere & Company 491,647 580,907

8,472 Exelon Corporation 453,223 434,65525,742 Informatica Corporation 648,863 691,30229,896 Intel Corporation 630,796 640,528

2,549 IntercontinentalExchange Inc. 243,417 300,26316,891 ITT Corporation 946,061 882,38018,029 Johnson Controls, Inc. 523,914 515,60122,927 Metabolix, Inc. 265,904 264,390

7,350 Monsanto Company 667,532 631,05911,681 Norfolk Southern Corporation 555,066 642,59910,647 Ormat Technologies Inc. 421,112 422,45824,540 Polycom, Inc. 669,342 642,01228,636 Quanta Services, Inc. 743,636 626,76516,740 Roper Industries, Inc. 855,204 920,73121,700 STR Holdings Inc. 236,489 357,58317,923 SunPower Corporation 571,014 444,80411,042 Union Pacific Corporation 719,674 740,34716,246 Waste Management, Inc. 543,092 576,881

14,961,367 15,208,522



NET ASSETS – 100.0% 38,234,700




Australia 0.7 4.6Austria 1.5 –Belgium 0.9 2.2Brazil 5.0 1.0Canada – 2.3Denmark 1.2 –Finland 1.4 2.0France 13.4 10.3Germany 9.7 5.3Italy 0.9 –Japan 7.3 7.9Netherlands 1.4 1.1Norway 1.8 3.6Philippines 1.9 3.5Singapore 1.7 2.3Spain 3.0 3.4Switzerland 3.8 3.3United Kingdom 3.0 4.3United States 39.8 35.0




(Level 2) ($)



Equities 17,124,342 20,499,353 – 37,623,695



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Scotia Global Climate Change Fund (Continued)



143

Scotia Global Climate Change Fund (Continued)


A. Risk managementThe investment objective of the Scotia Global Climate Change Fund (the“Fund”) is to achieve long-term capital growth. It invests primarily in adiversified portfolio of equity securities of companies located around the worldthat are expected to profit from direct or indirect actions taken by suchcompanies to mitigate the impact of climate change on the environment.




CurrencyFinancial




U.S. Dollar 15,936,773 – 15,936,773 41.7European Euro 12,324,443 – 12,324,443 32.2Japanese Yen 2,800,378 – 2,800,378 7.3Swiss Franc 1,440,910 – 1,440,910 3.8Brazilian Real 1,308,991 – 1,308,991 3.4British Pound 1,164,049 – 1,164,049 3.0Philippines Peso 747,700 – 747,700 2.0Norwegian Krone 698,257 – 698,257 1.8Singapore Dollar 659,321 – 659,321 1.7Danish Krone 446,806 – 446,806 1.2Australian Dollar 253,392 – 253,392 0.7

Total 37,781,020 – 37,781,020 98.8

December 31, 2008

CurrencyFinancial




U.S. Dollar 3,240,478 – 3,240,478 43.7European Euro 1,812,609 – 1,812,609 24.4Japanese Yen 591,268 – 591,268 8.0Australian Dollar 341,532 – 341,532 4.6British Pound 328,454 – 328,454 4.4Norwegian Krone 266,801 – 266,801 3.6Philippines Peso 262,734 – 262,734 3.5Swiss Franc 249,879 – 249,879 3.4Singapore Dollar 173,250 – 173,250 2.3

Total 7,267,005 – 7,267,005 97.9


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $3,778,102, 9.9% of the Fund’s Net Assets (December 31, 2008-$726,701, 9.8% of the Fund’s Net Assets). In practice, actual results may differfrom this sensitivity analysis and the difference could be material.





F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital International WorldIndex, as of December 31, 2009, with all other variables held constant, wouldresult in an increase or decrease of approximately $8,793,981, 23.0% of theFund’s Net Assets (December 31, 2008-$977,614, 13.2% of the Fund’s NetAssets). The Fund’s historical sensitivity measure may not be representative ofits future sensitivity measure, and accordingly, the impact on Net Assets couldbe materially different.


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Scotia Canadian Bond Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $283,995,992 $133,052,439Cash 2,320,131 372,887Accrued investment income 1,903,999 1,131,427Subscriptions receivable 847,191 203,763

289,067,313 134,760,516

LIABILITIESPayable for securities purchased 2,095,745 –Distributions payable 10 195Redemptions payable 1,806,545 8,472Accrued expenses 83,482 77,890

3,985,782 86,557

Net Assets $285,081,531 $134,673,959

NET ASSETS PER CLASSClass A Units $230,480,791 $ 94,383,142Class F Units $ 268,020 $ 501,645Class I Units $ 54,332,720 $ 39,789,172

UNITS OUTSTANDINGClass A Units 21,289,361 8,740,486Class F Units 24,706 46,331Class I Units 5,033,180 3,686,419




8,634,809 6,204,572

EXPENSESManagement fees (note 4) 1,040,997 597,678Audit fees 21,570 19,258Independent Review Committee fees 520 412Custodian fees 3,848 5,336Filing fees 19,711 17,354Legal fees 6,602 5,102Unitholder reporting costs 20,651 18,223Unitholder administration, service fees and GST 188,512 153,712

1,302,411 817,075Absorbed expenses (2,305) (7,505)

1,300,106 809,570


Net realized gain (loss) on investments sold 159,570 427,115Change in unrealized appreciation (depreciation) of investments (546,639) 1,678,224

Net gain (loss) on investments and transaction costs (387,069) 2,105,339


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $4,889,096 $4,895,835Class F Units $ 22,278 $ 39,059Class I Units $2,036,260 $2,565,447

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.36 $ 0.61Class F Units $ 0.49 $ 0.68Class I Units $ 0.47 $ 0.67


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 94,383,142 $ 74,618,592Class F Units 501,645 1,154,714Class I Units 39,789,172 34,698,755

134,673,959 110,472,061

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 4,889,096 4,895,835Class F Units 22,278 39,059Class I Units 2,036,260 2,565,447

6,947,634 7,500,341


Class A Units (5,132,384) (3,379,839)Class F Units (18,968) (26,461)Class I Units (1,990,711) (1,950,519)

(7,142,063) (5,356,819)



Reinvested distributionsClass A Units 5,043,464 3,315,995Class F Units 15,003 20,068Class I Units 1,990,763 1,950,577

Payments on redemptionClass A Units (29,344,458) (19,120,129)Class F Units (418,443) (732,990)Class I Units (6,154,448) (8,598,076)

150,602,001 22,058,376

INCREASE (DECREASE) IN NET ASSETSClass A Units 136,097,649 19,764,550Class F Units (233,625) (653,069)Class I Units 14,543,548 5,090,417

150,407,572 24,201,898


$285,081,531 $134,673,959


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AverageCost ($)

FairValue ($)


35,000 Business Development Bank of Canada4.35% due Feb. 28, 2022 35,232 35,425










1,000,000 Canada Housing Trust No. 12.70% due Dec. 15, 2013 997,820 1,001,493







35,000 Canada Mortgage and Housing Corporation4.25% due Feb. 1, 2016 34,106 36,852

130,000 Export Development Canada6.20% due Jun. 22, 2010 132,098 133,431


400,000 Export Development Canada5.80% due Dec. 3, 2012 417,440 439,866



16,000 Farm Credit Canada4.00% due May 24, 2013 15,963 16,776

33,000 Farm Credit Canada4.15% due Dec. 1, 2015 32,816 34,824

180,000 Government of Canada9.50% due Jun. 1, 2010 226,000 186,655

500,000 Government of Canada2.75% due Dec. 1, 2010 495,650 509,399

690,000 Government of Canada9.00% due Mar. 1, 2011 846,882 753,555



10,369,000 Government of Canada1.00% due Sep. 1, 2011 10,262,372 10,317,129


9,200,000 Government of Canada1.25% due Dec. 1, 2011 9,134,035 9,160,900


AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES (cont’d)Federal Bonds (cont’d)

2,000,000 Government of Canada1.50% due Mar. 1, 2012 2,000,900 1,994,181




2,000,000 Government of Canada1.75% due Mar. 1, 2013 1,987,000 1,973,159



418,000 Government of Canada10.25% due Mar. 15, 2014 586,781 544,597



1,880,000 Government of Canada2.00% due Dec. 1, 2014 1,825,842 1,813,770

















139,253,217 139,033,183

Provincial Bonds – 24.4%100,000 Alberta Capital Finance Authority

5.70% due Sep. 1, 2011 108,142 106,872260,000 Alberta Capital Finance Authority

5.85% due Jun. 1, 2012 261,454 283,48051,000 Alberta Capital Finance Authority



4.45% due Dec. 15, 2025 14,953 14,367


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88,000 Alberta Treasury Branches4.10% due Jun. 1, 2011 87,245 91,525

50,000 Alberta Treasury Branches4.10% due Dec. 1, 2011 49,773 52,329

160,000 Financement-Quebec5.25% due Dec. 1, 2011 162,203 170,817

197,000 Financement-Quebec4.25% due Mar. 1, 2014 194,073 207,747

87,000 Financement-Quebec4.25% due Dec. 1, 2015 87,758 90,793

80,000 Financement-Quebec5.25% due Jun. 1, 2034 85,869 82,399

250,000 Hydro-Quebec6.50% due Feb. 15, 2011 256,435 265,422

340,000 Hydro-Quebec10.00% due Sep. 26, 2011 432,337 388,494

125,000 Hydro-Quebec10.25% due Jul. 16, 2012 167,094 150,042

350,000 Hydro-Quebec11.00% due Aug. 15, 2020 557,550 539,769

154,000 Hydro-Quebec10.50% due Oct. 15, 2021 238,623 235,241

160,000 Hydro-Quebec9.63% due Jul. 15, 2022 215,280 233,500

40,000 Hydro-Quebec6.00% due Aug. 15, 2031 37,938 45,375





40,000 Newfoundland and Labrador Hydro4.33% due Oct. 13, 2016 39,910 41,378

60,000 Newfoundland and Labrador Hydro10.25% due Jul. 14, 2017 83,494 84,474

175,000 Newfoundland and Labrador Hydro6.65% due Aug. 27, 2031 174,729 213,388

100,000 Ontario Electricity Financial Corporation10.00% due Feb. 6, 2020 137,618 144,402

140,000 Ontario Electricity Financial Corporation8.90% due Aug. 18, 2022 182,350 196,077

155,000 Ontario Electricity Financial Corporation8.50% due May 26, 2025 194,424 215,256

450,000 Ontario Electricity Financial Corporation8.25% due Jun. 22, 2026 651,077 618,728

40,000 Ontario School Boards Financing Corporation6.30% due Sep. 22, 2010 39,856 41,517

40,000 Ontario School Boards Financing Corporation5.30% due Nov. 7, 2013 40,000 43,347

25,000 Ontario School Boards Financing Corporation5.70% due Oct. 11, 2017 24,935 27,086

29,636 Ontario School Boards Financing Corporation5.90% due Oct. 11, 2027 29,481 31,939

44,583 Ontario School Boards Financing Corporation5.48% due Nov. 26, 2029 44,583 44,846

18,159 Ontario School Boards Financing Corporation4.79% due Aug. 8, 2030 18,159 17,088

24,004 Ontario School Boards Financing Corporation5.07% due Apr. 18, 2031 24,004 23,105

37,000 Ontario School Boards Financing Corporation5.38% due Jun. 25, 2032 37,000 36,381

100,000 Ontario Strategic Infrastructure Finance Authority4.60% due Jun. 1, 2015 99,699 104,696


AverageCost ($)

FairValue ($)


70,000 Ornge Issuer Trust5.73% due Jun. 11, 2034 70,000 70,712

110,000 Province of Alberta4.00% due Dec. 1, 2019 109,107 108,416

260,000 Province of British Columbia6.38% due Aug. 23, 2010 266,744 269,490

320,000 Province of British Columbia5.75% due Jan. 9, 2012 337,243 345,806

275,000 Province of British Columbia8.50% due Aug. 23, 2013 330,706 330,922

80,000 Province of British Columbia5.30% due Jun. 18, 2014 79,504 87,879

90,000 Province of British Columbia4.70% due Dec. 1, 2017 89,674 94,889


1,500,000 Province of British Columbia4.65% due Dec. 18, 2018 1,566,100 1,558,710




290,000 Province of British Columbia6.15% due Nov. 19, 2027 273,509 335,671







100,000 Province of Manitoba5.85% due Jan. 25, 2011 99,708 105,195

50,000 Province of Manitoba5.25% due Dec. 3, 2012 49,883 54,195

46,000 Province of Manitoba4.25% due Jun. 3, 2013 45,822 48,564




1,082,000 Province of Manitoba4.30% due Mar. 1, 2016 1,136,824 1,134,819

1,050,000 Province of Manitoba4.70% due Sep. 22, 2017 1,119,262 1,108,604

45,000 Province of Manitoba4.25% due Mar. 5, 2018 44,811 45,887

40,000 Province of Manitoba4.75% due Feb. 11, 2020 39,630 41,134






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175,000 Province of New Brunswick6.38% due Jun. 15, 2010 174,551 179,555

60,000 Province of New Brunswick5.80% due Jul. 12, 2011 59,440 64,034

200,000 Province of New Brunswick5.85% due Dec. 1, 2011 210,300 215,792


100,000 Province of New Brunswick4.50% due Feb. 4, 2015 99,358 106,249

130,000 Province of New Brunswick8.75% due May 12, 2015 159,667 164,810


75,000 Province of New Brunswick4.70% due Jul. 21, 2016 74,439 79,908


1,000,000 Province of New Brunswick4.45% due Mar. 26, 2018 1,039,640 1,029,729

1,100,000 Province of New Brunswick4.40% due Jun. 3, 2019 1,100,676 1,108,781


90,000 Province of New Brunswick5.50% due Jan. 27, 2034 90,342 96,585


180,000 Province of New Brunswick4.55% due Mar. 26, 2037 172,627 170,852


50,000 Province of Newfoundland and Labrador6.40% due Jul. 25, 2011 49,858 53,844

75,000 Province of Newfoundland and Labrador10.13% due Nov. 22, 2014 102,518 98,618



1,050,000 Province of Newfoundland and Labrador6.55% due Oct. 17, 2030 1,288,861 1,265,665


117,000 Province of Newfoundland and Labrador4.65% due Oct. 17, 2040 112,981 113,450

85,000 Province of Nova Scotia6.40% due Sep. 1, 2010 85,256 88,201

150,000 Province of Nova Scotia6.25% due Jun. 1, 2011 149,454 160,444


40,000 Province of Nova Scotia4.70% due Jan. 14, 2015 39,877 42,796

60,000 Province of Nova Scotia4.60% due Aug. 18, 2016 59,648 63,414

75,000 Province of Nova Scotia4.45% due Oct. 24, 2021 73,511 73,939

130,000 Province of Nova Scotia9.60% due Jan. 30, 2022 179,967 188,885


1,050,000 Province of Nova Scotia5.80% due Jun. 1, 2033 1,196,803 1,169,772


AverageCost ($)

FairValue ($)





178,000 Province of Ontario4.00% due May 19, 2010 176,064 180,412

405,000 Province of Ontario6.10% due Nov. 19, 2010 409,671 423,757

693,000 Province of Ontario4.40% due Dec. 2, 2011 709,193 729,165


1,090,000 Province of Ontario4.50% due Dec. 2, 2012 1,122,907 1,158,312









200,000 Province of Ontario9.50% due Jul. 13, 2022 268,132 292,116

700,000 Province of Ontario8.10% due Sep. 8, 2023 938,210 941,533


110,000 Province of Ontario6.25% due Aug. 25, 2028 110,879 127,703

910,000 Province of Ontario6.50% due Mar. 8, 2029 976,860 1,095,293

90,000 Province of Ontario6.20% due Jun. 2, 2031 89,415 105,657





50,000 Province of Prince Edward Island6.80% due Feb. 21, 2030 49,690 61,374

20,000 Province of Prince Edward Island5.70% due Jun. 15, 2035 19,982 21,995

20,000 Province of Prince Edward Island5.30% due May 19, 2036 19,872 20,924

20,000 Province of Prince Edward Island4.65% due Nov. 19, 2037 19,991 19,080


200,000 Province of Quebec6.00% due Oct. 1, 2012 204,120 220,133



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500,000 Province of Quebec9.38% due Jan. 16, 2023 712,250 723,024

750,000 Province of Quebec8.50% due Apr. 1, 2026 1,031,813 1,045,330


1,364,000 Province of Quebec6.25% due Jun. 1, 2032 1,487,069 1,596,888




85,000 Province of Saskatchewan6.15% due Sep. 1, 2010 94,452 88,073

100,000 Province of Saskatchewan10.25% due Apr. 10, 2014 131,100 129,210

40,000 Province of Saskatchewan5.25% due Jun. 3, 2014 39,699 43,858

30,000 Province of Saskatchewan4.25% due Dec. 3, 2015 29,797 31,474

60,000 Province of Saskatchewan4.50% due Aug. 23, 2016 59,590 63,412



700,000 Province of Saskatchewan5.00% due Mar. 5, 2037 734,794 727,116

142,000 Province of Saskatchewan4.75% due Jun. 1, 2040 145,940 143,052

68,730,017 69,769,996

Municipal Bonds – 0.6%135,000 55 School Board Trust, The

5.90% due Jun. 2, 2033 134,906 143,31160,000 City of Edmonton

11.50% due Dec. 13, 2010 80,700 65,79550,000 City of Edmonton

9.63% due Feb. 13, 2012 62,963 57,750115,000 City of Montreal

6.00% due Jun. 1, 2043 121,597 127,40120,000 City of Toronto

6.25% due Aug. 3, 2010 19,854 20,626130,000 City of Toronto

5.30% due May 21, 2014 129,753 140,96530,000 City of Toronto

4.55% due May 20, 2015 29,826 31,47655,000 City of Toronto

4.85% due Jul. 28, 2016 54,767 58,08237,000 City of Toronto

5.05% due Jul. 18, 2017 36,899 39,12350,000 City of Toronto

4.95% due Jun. 27, 2018 49,848 51,975


AverageCost ($)

FairValue ($)

BONDS AND DEBENTURES (cont’d)Municipal Bonds (cont’d)

100,000 City of Toronto4.50% due Dec. 2, 2019 99,691 98,702

16,930 City of Toronto5.34% due Jul. 18, 2027 16,930 16,901

25,000 City of Vancouver4.70% due Dec. 1, 2017 24,852 25,784

20,000 Municipal Finance Authority of British Columbia4.00% due Dec. 1, 2010 19,950 20,542



25,000 Municipal Finance Authority of British Columbia4.15% due Oct. 13, 2015 24,967 25,777

162,000 Municipal Finance Authority of British Columbia4.65% due Apr. 19, 2016 164,721 171,145


100,000 Municipality of Metropolitan Toronto8.65% due Jun. 8, 2015 124,070 124,635

30,000 Regional Municipality of York4.50% due Sep. 28, 2016 29,921 31,138

32,550 Toronto Hospital5.64% due Dec. 8, 2022 31,834 33,959

25,000 Ville de Montreal4.60% due Jun. 1, 2017 24,950 25,475

108,000 Ville de Montreal5.00% due Dec. 1, 2017 108,530 112,239



1,640,385 1,685,584

Corporate Bonds – 25.8%110,000 407 International Inc.

4.90% due Oct. 4, 2010 109,945 113,198100,000 407 International Inc.

6.47% due Jul. 27, 2029 112,757 110,072555,000 407 International Inc.

5.96% due Dec. 3, 2035 592,562 581,62279,000 407 International Inc.

5.75% due Feb. 14, 2036 78,898 74,938119,200 Aeroports de Montreal

6.95% due Apr. 16, 2032 135,340 122,92750,000 Aeroports de Montreal

5.17% due Sep. 17, 2035 49,939 45,91755,000 Aeroports de Montreal

5.67% due Oct. 16, 2037 54,945 53,93720,000 AGT Limited

8.80% due Sep. 22, 2025 23,974 24,76065,000 Algonquin Credit Card Trust

3.99% due Oct. 15, 2010 65,000 66,108130,976 Alliance Pipeline LP

7.23% due Jun. 30, 2015 134,950 142,77638,307 Alliance Pipeline LP

7.18% due Jun. 30, 2023 40,219 42,23933,459 Alliance Pipeline LP

5.55% due Dec. 31, 2023 33,459 34,65075,692 Alliance Pipeline LP

6.77% due Dec. 31, 2025 75,692 81,22756,766 Alliance Pipeline LP

7.22% due Dec. 31, 2025 60,030 62,567100,000 AltaGas Income Trust

7.42% due Apr. 29, 2014 99,984 106,61030,000 AltaLink LP

5.43% due Jun. 5, 2013 32,363 32,177


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AverageCost ($)

FairValue ($)


325,000 AltaLink LP5.24% due May 29, 2018 333,365 338,012

32,000 AltaLink LP*5.02% due Nov. 21, 2012 32,000 33,225

82,000 American Express Canada Credit Corporation4.30% due Nov. 12, 2010 81,851 83,903

65,000 American Express Canada Credit Corporation4.70% due May 20, 2011 64,995 67,138

105,000 American Express Canada Credit Corporation5.90% due Apr. 2, 2013 104,877 112,245

650,000 American Express Canada Credit Corporation4.85% due Oct. 3, 2014 656,825 667,823

55,000 Asian Development Bank4.75% due Jun. 15, 2017 54,909 57,624

101,000 Asian Development Bank4.65% due Feb. 16, 2027 101,062 95,106

200,000 Bank of Montreal7.00% due Jan. 28, 2010 208,540 200,709

120,000 Bank of Montreal4.69% due Jan. 31, 2011 119,418 124,556

250,000 Bank of Montreal5.04% due Sep. 4, 2012 251,925 267,232

150,000 Bank of Montreal4.65% due Mar. 14, 2013 149,925 158,998

100,000 Bank of Montreal4.78% due Apr. 30, 2014 99,981 106,586

80,000 Bank of Montreal (callable)4.00% due Jan. 21, 2015-(2010) 79,982 80,088

95,000 Bank of Montreal5.10% due Apr. 21, 2016 95,000 100,434

185,000 Bank of Montreal (callable)5.20% due Jun. 21, 2017-(2012) 184,993 196,868

1,868,000 Bank of Montreal5.45% due Jul. 17, 2017 1,972,226 2,042,767

95,000 Bank of Montreal4.55% due Aug. 1, 2017 94,990 98,475

90,000 Bank of Montreal (callable)4.87% due Apr. 22, 2020-(2015) 89,986 94,707

115,000 Bank of Montreal (callable)6.17% due Mar. 28, 2023-(2018) 114,965 126,661

500,000 Bank of Montreal Capital Trust6.69% due Dec. 31, 2011 526,980 539,726

70,000 Bank of Montreal Capital Trust (callable)4.63% due Dec. 31, 2049-(2015) 70,000 70,600

635,000 Bank of Montreal Capital Trust (callable)5.47% due Dec. 31, 2049-(2014) 650,080 668,036

50,000 bcIMC Realty Corporation4.10% due Feb. 10, 2011 49,968 51,364

50,000 bcIMC Realty Corporation4.65% due Feb. 10, 2015 49,965 51,594

130,000 Bell Aliant Regional Communications, Limited Partnership4.72% due Sep. 26, 2011 129,993 135,096

75,000 Bell Aliant Regional Communications, Limited Partnership4.95% due Feb. 26, 2014 74,978 77,994


85,000 Bell Aliant Regional Communications, Limited Partnership5.41% due Sep. 26, 2016 84,961 87,217


240,000 Bell Canada4.85% due Jun. 30, 2014 239,621 251,882

500,000 Bell Canada6.10% due Mar. 16, 2035 458,630 465,843

500,000 Bell Canada*6.55% due May 1, 2029 503,650 489,426


AverageCost ($)

FairValue ($)


250,000 BMO Subordinated Notes Trust5.75% due Sep. 26, 2022 249,962 270,994

65,000 Borealis Infrastructure Trust6.27% due May 3, 2011 67,144 68,783

500,000 British Columbia Ferry Services Inc.6.21% due Dec. 19, 2013 557,830 555,181

45,000 British Columbia Ferry Services Inc.5.74% due May 27, 2014 44,976 49,271

40,000 British Columbia Ferry Services Inc.6.25% due Oct. 13, 2034 39,952 43,166

35,000 British Columbia Ferry Services Inc.5.58% due Jan. 11, 2038 35,000 34,609

90,000 Brookfield Asset Management Inc.*5.95% due Jun. 14, 2035 83,550 67,504



70,000 Canada Life Capital Trust6.68% due Jun. 30, 2012 70,000 76,056

70,000 Canadian Credit Card Trust4.14% due Apr. 26, 2010 70,000 70,659

50,000 Canadian Credit Card Trust4.51% due Apr. 24, 2012 50,000 52,116

100,000 Canadian Imperial Bank of Commerce4.95% due Sep. 2, 2010 101,332 102,703

250,000 Canadian Imperial Bank of Commerce4.40% due Mar. 7, 2011 249,450 259,014

240,000 Canadian Imperial Bank of Commerce (callable)4.55% due Mar. 28, 2011-(2016) 239,618 248,778

92,000 Canadian Imperial Bank of Commerce4.35% due Nov. 1, 2011 92,438 95,974

1,375,000 Canadian Imperial Bank of Commerce5.00% due Sep. 10, 2012 1,443,412 1,463,951

295,000 Canadian Imperial Bank of Commerce3.05% due Jun. 3, 2013 294,844 296,864

75,000 Canadian Imperial Bank of Commerce4.95% due Jan. 23, 2014 74,778 80,316

1,500,000 Canadian Imperial Bank of Commerce3.30% due Nov. 19, 2014 1,499,595 1,494,991

60,000 Canadian Imperial Bank of Commerce4.75% due Dec. 22, 2014 59,846 63,614

210,000 Canadian Imperial Bank of Commerce (callable)3.75% due Sep. 9, 2015-(2010) 209,601 213,534

750,000 Canadian Imperial Bank of Commerce (callable)6.00% due Jun. 6, 2023-(2018) 774,750 821,394

65,000 Canadian Natural Resources Limited5.50% due Dec. 17, 2010 64,968 67,549

65,000 Canadian Natural Resources Limited4.50% due Jan. 23, 2013 64,988 68,071

70,000 Canadian Natural Resources Limited4.95% due Jun. 1, 2015 69,962 72,880

50,000 Canadian Pacific Railway Company4.90% due Jun. 15, 2010 49,919 50,780

50,000 Canadian Tire Corporation, Limited5.22% due Oct. 1, 2010 49,992 51,466

50,000 Canadian Tire Corporation, Limited4.95% due Jun. 1, 2015 49,909 52,430

100,000 Canadian Tire Corporation, Limited5.65% due Jun. 1, 2016 99,960 107,781

30,000 Canadian Tire Corporation, Limited6.32% due Feb. 24, 2034 29,984 29,071

30,000 Canadian Tire Corporation, Limited5.61% due Sep. 4, 2035 30,000 26,368

80,000 Capital Desjardins Inc. (callable)6.32% due Jun. 1, 2017-(2012) 81,480 86,713


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AverageCost ($)

FairValue ($)


77,000 Capital Desjardins Inc. (callable)5.76% due Apr. 1, 2019-(2014) 77,000 83,292

775,000 Capital Desjardins Inc. (callable)5.54% due Jun. 1, 2021-(2016) 775,000 830,843

120,000 CARDS II Trust3.87% due Oct. 15, 2010 120,000 122,594

60,000 Caterpillar Financial Services Limited4.34% due Dec. 6, 2010 59,984 61,663



100,000 CBC Monetization Trust4.69% due May 15, 2027 100,000 98,354

16,000 CHIP Mortgage Trust4.30% due Nov. 1, 2010 16,000 16,325

500,000 CIBC Capital Trust10.25% due Jun. 30, 2039 740,630 715,721


26,000 Citigroup Finance Canada Inc.4.37% due Feb. 3, 2010 25,996 26,030

30,000 Citigroup Finance Canada Inc.5.10% due Jul. 26, 2011 29,981 30,846

50,000 Citigroup Finance Canada Inc.4.75% due Mar. 17, 2014 49,968 49,642

75,000 Clarica Life Insurance Company (callable)6.65% due Oct. 12, 2015-(2010) 74,752 77,791

30,000 Concordia University6.55% due Sep. 2, 2042 29,995 34,246

65,000 Congress Financial Corporation (Canada)4.00% due Feb. 1, 2010 64,956 65,067

75,000 Consumers’ Waterheater Operating Trust, The6.75% due Apr. 30, 2014 74,870 74,456

20,000 CU Inc.5.43% due Jan. 23, 2019 20,000 21,382

14,000 CU Inc.4.80% due Nov. 22, 2021 14,000 13,654

150,000 CU Inc.6.22% due Mar. 6, 2024 150,000 161,153

90,000 CU Inc.5.56% due May 26, 2028 90,000 89,891

31,000 CU Inc.5.18% due Nov. 21, 2035 31,000 29,378

28,000 CU Inc.5.03% due Nov. 20, 2036 28,000 25,984

538,000 CU Inc.5.56% due Oct. 30, 2037 545,500 537,334

500,000 Duke Energy Corporation8.50% due Nov. 23, 2015 605,380 609,127

83,000 Eagle Credit Card Trust4.44% due Mar. 17, 2011 83,000 85,501

200,000 Enbridge Gas Distribution Inc.11.95% due Nov. 30, 2010 281,260 218,733

30,000 Enbridge Gas Distribution Inc.5.16% due Sep. 24, 2014 29,984 32,363

70,000 Enbridge Gas Distribution Inc.7.60% due Oct. 29, 2026 91,570 85,420

50,000 Enbridge Gas Distribution Inc.6.90% due Nov. 15, 2032 62,312 58,816

50,000 Enbridge Gas Distribution Inc.5.21% due Feb. 25, 2036 49,932 47,729

50,000 Enbridge Inc.3.95% due Feb. 15, 2010 49,964 50,165

90,000 Enbridge Inc.6.80% due Mar. 10, 2010 91,125 90,904


AverageCost ($)

FairValue ($)


50,000 Enbridge Inc.4.67% due Mar. 25, 2013 49,985 52,737

250,000 Enbridge Inc.5.17% due May 19, 2016 249,855 265,787

70,000 Enbridge Inc.5.00% due Aug. 9, 2016 69,684 73,651

300,000 Enbridge Inc.4.77% due Sep. 2, 2019 299,859 300,192

20,000 Enbridge Inc.7.22% due Jul. 24, 2030 19,998 22,848

24,000 Enbridge Inc.5.57% due Nov. 14, 2035 23,969 22,753

250,000 Enbridge Inc.5.75% due Sep. 2, 2039 249,752 242,408

41,000 Enbridge Pipelines Inc.4.46% due Dec. 17, 2012 40,995 43,241

130,000 Enbridge Pipelines Inc.6.35% due Nov. 17, 2023 119,675 142,193

96,000 Enbridge Pipelines Inc.6.10% due Jul. 14, 2028 82,368 97,159

26,000 Enbridge Pipelines Inc.5.08% due Dec. 19, 2036 25,980 24,364

90,000 EnCana Corporation5.80% due Jan. 18, 2018 89,764 95,848

555,000 EPCOR Power LP5.95% due Jun. 23, 2036 430,426 477,685


40,000 EPCOR Utilities Inc.5.80% due Jan. 31, 2018 39,949 42,929


250,000 EPCOR Utilities Inc.6.65% due Apr. 15, 2038 277,000 270,945


25,000 Finning International Inc.4.64% due Dec. 14, 2011 24,992 25,909

575,000 Finning International Inc.5.16% due Sep. 3, 2013 580,715 605,241

70,000 Fort Chicago Energy Partners LP5.60% due Jul. 28, 2014 69,982 71,783

50,000 Fortis, Inc.7.40% due Oct. 25, 2010 49,947 52,407

70,000 Fortis, Inc.6.51% due Jul. 4, 2039 69,954 73,675

530,000 FortisAlberta Inc.5.33% due Oct. 31, 2014 567,383 572,533


18,000 FortisAlberta Inc.5.40% due Apr. 21, 2036 17,987 17,518


16,000 FortisBC Inc.5.60% due Nov. 9, 2035 16,058 15,356

29,000 Gaz Metro Inc.5.45% due Jul. 12, 2021 28,903 30,018

30,000 Gaz Metro Inc.6.30% due Oct. 31, 2033 29,824 32,659

29,000 Gaz Metro Inc.5.70% due Jul. 10, 2036 28,954 29,318

120,000 GE Capital Canada Funding Company3.65% due Jun. 7, 2010 119,929 121,185

87,000 GE Capital Canada Funding Company4.40% due Feb. 7, 2011 86,911 89,384


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AverageCost ($)

FairValue ($)


102,000 GE Capital Canada Funding Company4.75% due May 2, 2011 102,032 105,438

150,000 GE Capital Canada Funding Company6.25% due Jul. 24, 2012 153,855 162,014

100,000 GE Capital Canada Funding Company4.38% due Sep. 28, 2012 99,889 103,596



100,000 GE Capital Canada Funding Company4.65% due Feb. 11, 2015 99,952 102,160


596,000 GE Capital Canada Funding Company4.55% due Jan. 17, 2017 551,058 587,262

825,000 GE Capital Canada Funding Company5.53% due Aug. 17, 2017 821,505 852,397

790,000 GE Capital Canada Funding Company5.68% due Sep. 10, 2019 789,407 800,007

224,000 GE Capital Canada Funding Company5.73% due Oct. 22, 2037 222,902 201,862

160,000 Genesis Trust4.00% due Mar. 15, 2010 160,000 160,940

350,000 Genesis Trust4.25% due Sep. 15, 2011 339,115 363,581

100,000 George Weston Limited6.45% due Oct. 24, 2011 99,956 107,040

30,000 George Weston Limited5.05% due Mar. 10, 2014 29,909 31,268

55,000 Glacier Credit Card Trust4.19% due Nov. 19, 2010 55,000 56,324

75,000 Gloucester Credit Card Trust4.45% due Mar. 15, 2011 75,000 76,849

50,000 Golden Credit Card Trust4.05% due Jun. 15, 2010 50,000 50,734

500,000 Golden Credit Card Trust5.11% due Apr. 15, 2011 524,300 521,420


100,000 Great-West Lifeco Inc.6.74% due Nov. 24, 2031 99,885 107,788

90,000 Great-West Lifeco Inc.6.67% due Mar. 21, 2033 90,314 96,707

50,000 Great-West Lifeco Inc.5.00% due Nov. 16, 2039 50,266 49,950

90,000 Greater Toronto Airports Authority6.70% due Jul. 19, 2010 91,284 92,796

100,000 Greater Toronto Airports Authority6.25% due Jan. 30, 2012 99,948 108,259

100,000 Greater Toronto Airports Authority6.25% due Dec. 13, 2012 104,805 110,126



71,000 Greater Toronto Airports Authority5.26% due Apr. 17, 2018 70,994 74,466

500,000 Greater Toronto Airports Authority5.96% due Nov. 20, 2019 499,885 544,546

735,000 Greater Toronto Airports Authority6.45% due Dec. 3, 2027 710,633 787,027




AverageCost ($)

FairValue ($)



28,000 Halifax International Airport Authority5.50% due Jul. 19, 2041 28,000 26,064

42,000 Honda Canada Finance Inc.4.70% due Aug. 25, 2011 42,000 43,589



150,000 Hospital for Sick Children5.22% due Dec. 16, 2049 150,000 147,557

100,000 HSBC Bank of Canada5.31% due Oct. 12, 2010 99,989 103,256

30,000 HSBC Canada Asset Trust (callable)5.15% due Jun. 30, 2049-(2015) 30,000 29,872

105,000 HSBC Financial Corporation Limited4.00% due May 3, 2010 105,209 105,880

125,000 HSBC Financial Corporation Limited4.35% due Oct. 6, 2011 125,097 128,571


40,000 Hydro One Inc.5.77% due Nov. 15, 2012 41,658 43,680

129,000 Hydro One Inc.4.64% due Mar. 3, 2016 128,705 135,952

50,000 Hydro One Inc.5.18% due Oct. 18, 2017 49,973 53,438



20,000 Hydro One Inc.6.35% due Jan. 31, 2034 20,151 22,092

100,000 Hydro One Inc.5.36% due May 20, 2036 99,610 97,344



15,000 Hydro Ottawa Holding Inc.4.93% due Feb. 9, 2015 14,994 15,878

125,000 IGM Financial Inc.7.35% due Apr. 8, 2019 124,930 142,893

40,000 Industrial Alliance Capital Trust5.71% due Dec. 31, 2013 40,000 41,734

30,000 Industrial Alliance Capital Trust (callable)5.13% due Jun. 30, 2019-(2014) 30,076 30,557

100,000 Intact Financial Corporation5.41% due Sep. 3, 2019 99,954 100,237

100,000 Intact Financial Corporation6.40% due Nov. 23, 2039 99,907 96,713

74,000 Inter-American Development Bank4.40% due Jan. 26, 2026 72,986 67,680

70,000 Investors Group Inc.6.75% due May 9, 2011 76,480 74,119

60,000 Investors Group Inc.7.45% due May 9, 2031 63,120 65,541

50,000 Investors Group Inc.7.11% due Mar. 7, 2033 50,229 53,978

45,000 John Deere Credit Inc.5.25% due Oct. 18, 2010 44,977 46,430

140,000 John Deere Credit Inc.3.90% due Jul. 29, 2013 139,840 142,784

150,000 John Hancock Financial Services, Inc.6.82% due May 31, 2011 149,520 159,630


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AverageCost ($)

FairValue ($)


35,000 Loblaw Companies Limited7.10% due May 11, 2010 36,015 35,724




200,000 Loblaw Companies Limited7.10% due Jun. 1, 2016 208,800 230,939





120,000 Manitoba Telecom Services Inc.6.15% due Jun. 10, 2014 119,585 129,079

100,000 Manufacturers Life Insurance Company, The (callable)6.24% due Feb. 16, 2016-(2011) 100,450 104,903

25,000 Manulife Bank of Canada4.19% due Dec. 9, 2010 24,959 25,634



200,000 Manulife Financial Capital Trust6.70% due Jun. 30, 2012 198,460 216,360

925,000 Manulife Financial Capital Trust II (callable)7.41% due Dec. 31, 2108-(2019) 989,500 1,035,754

65,000 Manulife Financial Corporation4.67% due Mar. 28, 2013 64,984 68,309

500,000 Manulife Financial Corporation4.90% due Jun. 2, 2014 500,000 529,454

200,000 Manulife Financial Corporation7.77% due Apr. 8, 2019 200,000 237,498

175,000 Master Credit Card Trust4.44% due Nov. 21, 2011 175,000 182,742

1,000,000 Master Credit Card Trust5.30% due Aug. 21, 2012 1,000,000 1,070,953

50,000 MBNA Canada Bank4.00% due Jun. 28, 2010 49,944 50,328

20,000 McMaster University6.15% due Oct. 7, 2052 19,981 22,385

30,000 Merrill Lynch Canada Finance Company*5.00% due Feb. 18, 2014 29,907 30,584

30,000 METRO Inc.4.98% due Oct. 15, 2015 29,979 31,519

65,000 METRO Inc.5.97% due Oct. 15, 2035 64,955 59,219

47,228 MILIT-AIR Inc.5.75% due Jun. 30, 2019 44,748 51,277

320,000 Molson Coors Capital Finance ULC5.00% due Sep. 22, 2015 319,203 330,095

46,000 NAV Canada4.43% due Feb. 24, 2011 46,000 47,652

175,000 NAV Canada3.43% due Apr. 17, 2012 175,000 179,559

80,000 NAV Canada4.71% due Feb. 24, 2016 80,000 84,296

36,000 NAV Canada7.56% due Mar. 1, 2027 39,384 42,508

30,000 NAV Canada7.40% due Jun. 1, 2027 33,804 36,430


AverageCost ($)

FairValue ($)


500,000 NBC Asset Trust (callable)7.45% due Jun. 30, 2049-(2020) 529,850 539,345

15,000 NOVA Gas Transmission Ltd.9.90% due Dec. 16, 2024 19,238 21,085

15,000 Nova Scotia Power Inc.4.22% due May 17, 2010 14,998 15,176

50,000 Nova Scotia Power Inc.5.75% due Oct. 1, 2013 49,921 54,358

100,000 Nova Scotia Power Inc.6.95% due Aug. 25, 2033 105,394 113,172

24,000 Nova Scotia Power Inc.5.67% due Nov. 14, 2035 23,976 23,234

100,000 Nova Scotia Power Inc.5.95% due Jul. 27, 2039 99,667 101,217

70,000 OMERS Realty Corporation5.48% due Dec. 31, 2012 69,938 75,687

125,000 Ontrea Inc.5.70% due Oct. 31, 2011 130,059 133,601

200,000 Power Corporation of Canada8.57% due Apr. 22, 2039 199,848 248,925

450,000 PSP Capital Inc.4.57% due Dec. 9, 2013 452,390 476,927

550,000 RBC Capital Trust4.87% due Dec. 31, 2015 538,638 563,288

100,000 RBC Capital Trust (callable)6.82% due Jun. 30, 2049-(2018) 100,000 110,436

100,000 RBC Capital Trust Convertible7.29% due Jun. 30, 2010 112,590 102,894

320,000 RBC Capital Trust Convertible7.18% due Jun. 30, 2011 360,605 343,514

1,350,000 RBC Capital Trust II (callable)5.81% due Dec. 31, 2049-(2013) 1,441,299 1,456,344

200,000 RBC Subordinated Notes Trust (callable)4.58% due Apr. 30, 2017-(2012) 199,964 209,620

30,000 RioCan Real Estate Investment Trust4.91% due Mar. 8, 2011 29,992 30,770

20,000 RioCan Real Estate Investment Trust4.70% due Jun. 15, 2012 19,954 20,315

24,000 RioCan Real Estate Investment Trust*5.23% due Mar. 11, 2013 24,001 24,284

487,000 Rogers Communications Inc.5.80% due May 26, 2016 485,865 520,151

490,000 Rogers Communications Inc.5.38% due Nov. 4, 2019 489,662 488,615

380,000 Rogers Communications Inc.6.68% due Nov. 4, 2039 379,609 386,653

264,000 Royal Bank of Canada5.13% due Sep. 27, 2010 263,958 272,375

49,000 Royal Bank of Canada4.17% due Jan. 11, 2011 49,000 50,506

95,000 Royal Bank of Canada4.92% due Jul. 6, 2011 94,991 99,746

175,000 Royal Bank of Canada4.53% due May 7, 2012 174,993 184,245

380,000 Royal Bank of Canada5.20% due Aug. 15, 2012 381,988 407,427

1,000,000 Royal Bank of Canada5.06% due Jul. 17, 2013 999,830 1,075,544

80,000 Royal Bank of Canada5.00% due Jan. 20, 2014 79,925 86,088



295,000 Royal Bank of Canada3.27% due Nov. 10, 2014 294,959 294,886


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AverageCost ($)

FairValue ($)


80,000 Royal Bank of Canada4.71% due Dec. 22, 2014 79,987 85,084

80,000 Royal Bank of Canada (callable)3.70% due Jun. 24, 2015-(2010) 79,978 80,994

750,000 Royal Bank of Canada4.84% due Mar. 11, 2018 777,690 794,353

200,000 Royal Bank of Canada (callable)5.00% due Jun. 6, 2018-(2013) 199,938 213,031

160,000 Royal Bank of Canada (callable)5.45% due Nov. 4, 2018-(2013) 160,000 173,095

1,212,000 Royal Office Finance LP5.21% due Nov. 12, 2032 1,220,295 1,195,165

50,000 SCORE Trust4.95% due Feb. 20, 2014 50,000 50,712

103,000 Shaw Communications Inc.6.50% due Jun. 2, 2014 102,695 112,723

605,000 Shaw Communications Inc.5.65% due Oct. 1, 2019 615,672 608,307

110,000 Shaw Communications Inc.6.75% due Nov. 9, 2039 109,259 108,373

50,000 Simon Fraser University5.61% due Jun. 10, 2043 50,000 50,441

15,000 SNC-Lavalin Group Inc.7.70% due Sep. 20, 2010 15,021 15,614

145,000 SNC-Lavalin Group Inc.*6.19% due Jul. 3, 2019 145,000 153,277

16,000 Summit Real Estate Investment5.38% due Mar. 1, 2012 15,977 15,971

70,000 Sun Life Assurance Company of Canada (callable)6.15% due Jun. 30, 2022-(2012) 71,155 75,238

220,000 Sun Life Capital Trust6.87% due Dec. 31, 2011 221,400 236,898

500,000 Sun Life Capital Trust II5.86% due Dec. 31, 2019 508,555 502,542



95,000 Sun Life Financial Inc. (callable)4.80% due Nov. 23, 2035-(2015) 94,985 97,129


92,000 Sun Life Financial Inc. (callable)5.40% due May 29, 2042-(2037) 91,891 79,103


100,000 Suncor Energy, Inc.5.39% due Mar. 26, 2037 99,720 87,950

57,000 Talisman Energy Inc.4.44% due Jan. 27, 2011 56,995 58,495

175,000 TD Capital Trust (callable)6.63% due Jun. 30, 2108-(2021) 175,000 189,654


1,000,000 TD Capital Trust IV (callable)9.52% due Jun. 30, 2108-(2019) 1,274,420 1,302,515

100,000 TD Capital Trust IV (callable)10.00% due Jun. 30, 2108-(2039) 102,391 145,974

20,000 Telus Communication Inc.12.00% due May 31, 2010 26,330 20,830

30,000 Telus Communication Inc.10.65% due Jun. 19, 2021 38,448 40,561

50,000 Telus Communication Inc.9.65% due Apr. 8, 2022 46,500 63,486

330,000 TELUS Corporation4.95% due May 15, 2014 329,987 346,647


AverageCost ($)

FairValue ($)


250,000 TELUS Corporation4.95% due Mar. 15, 2017 235,000 253,594

725,000 TELUS Corporation5.05% due Dec. 4, 2019 720,788 706,825


20,000 Terasen Gas Inc.5.55% due Sep. 25, 2036 19,997 19,792

55,000 Terasen Gas Inc.6.00% due Oct. 2, 2037 54,803 58,076


550,000 Terasen Gas Inc.5.80% due May 13, 2038 579,123 564,861

198,000 Thomson Reuters Corporation5.20% due Dec. 1, 2014 196,923 213,125

50,000 Toronto Community Housing Corporation Issuer Trust4.88% due May 11, 2037 50,000 46,409

40,000 Toronto Hydro Corporation6.11% due May 7, 2013 39,976 43,872

200,000 Toronto-Dominion Bank, The5.14% due Nov. 19, 2012 200,000 214,943

2,225,000 Toronto-Dominion Bank, The4.85% due Feb. 13, 2013 2,284,000 2,375,546

50,000 Toronto-Dominion Bank, The10.05% due Aug. 4, 2014 64,390 63,412

255,000 Toronto-Dominion Bank, The (callable)4.97% due Oct. 30, 2104-(2015) 251,263 261,882

125,000 Toronto-Dominion Bank, The (callable)4.32% due Jan. 18, 2016-(2011) 125,000 128,717

93,000 Toronto-Dominion Bank, The (callable)4.87% due Oct. 28, 2016-(2011) 93,000 97,667

1,175,000 Toronto-Dominion Bank, The (callable)5.38% due Nov. 1, 2017-(2012) 1,226,506 1,261,862

140,000 Toronto-Dominion Bank, The (callable)5.69% due Jun. 3, 2018-(2013) 147,415 152,335

75,000 Toronto-Dominion Bank, The (callable)5.48% due Apr. 2, 2020-(2015) 75,000 81,237

50,000 Toronto-Dominion Bank, The9.15% due May 26, 2025 62,200 67,783

300,000 Toronto-Dominion Bank, The (callable)4.78% due Dec. 14, 2105-(2016) 300,000 299,726


45,000 Toyota Credit Canada Inc.5.05% due Jul. 27, 2012 44,977 47,532

20,000 Trans Quebec & Maritimes Pipelines Inc.7.05% due Sep. 22, 2010 20,000 20,760

44,000 TransAlta Corporation6.45% due May 29, 2014 43,922 46,796

500,000 TransCanada PipeLines Limited4.30% due Jan. 13, 2011 495,199 515,173

50,000 TransCanada PipeLines Limited9.50% due May 20, 2011 59,417 55,129

250,000 TransCanada PipeLines Limited5.05% due Aug. 20, 2013 249,673 267,883


70,000 TransCanada PipeLines Limited4.65% due Oct. 3, 2016 69,983 72,590


110,000 TransCanada PipeLines Limited9.45% due Mar. 20, 2018 132,946 144,744

50,000 TransCanada PipeLines Limited7.90% due Apr. 15, 2027 53,700 60,688


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FairValue ($)


40,000 TransCanada PipeLines Limited6.28% due May 26, 2028 35,490 41,554

65,000 TransCanada PipeLines Limited7.34% due Jul. 18, 2028 67,506 75,305

50,000 TransCanada PipeLines Limited6.50% due Dec. 9, 2030 57,417 53,615


575,000 TransCanada PipeLines Limited8.05% due Feb. 17, 2039 746,177 752,841

100,000 Union Gas Limited7.90% due Feb. 24, 2014 111,670 116,845

30,000 Union Gas Limited4.64% due Jun. 30, 2016 29,982 31,044

100,000 Union Gas Limited5.35% due Apr. 27, 2018 99,870 105,820

25,000 Union Gas Limited4.85% due Apr. 25, 2022 24,952 24,241

25,000 Union Gas Limited8.65% due Nov. 10, 2025 29,500 33,114

50,000 Union Gas Limited5.46% due Sep. 11, 2036 50,000 48,965

20,000 University of British Columbia4.82% due Jul. 26, 2035 20,000 18,277

20,000 University of Guelph6.24% due Oct. 10, 2042 19,974 21,813

46,679 University of Ontario Institute of Technology6.35% due Oct. 15, 2034 46,679 46,897

35,000 University of Western Ontario4.80% due May 24, 2047 35,000 31,848

25,000 University of Windsor5.37% due Jun. 29, 2046 25,000 23,735

40,000 Vancouver International Airport Authority4.42% due Dec. 7, 2018 40,000 39,451


194,000 Wells Fargo Financial Corporation Canada4.45% due Feb. 28, 2011 193,636 200,357

70,000 Wells Fargo Financial Corporation Canada4.45% due Sep. 13, 2011 69,994 72,576

130,000 Wells Fargo Financial Corporation Canada5.20% due Sep. 13, 2012 129,904 137,765

46,000 Wells Fargo Financial Corporation Canada4.40% due Dec. 12, 2012 45,926 47,824

200,000 Wells Fargo Financial Corporation Canada4.33% due Dec. 6, 2013 190,504 206,223

770,000 Wells Fargo Financial Corporation Canada3.97% due Nov. 3, 2014 769,969 774,789


200,000 Westcoast Energy Inc.7.20% due Jan. 26, 2010 227,260 200,639

50,000 Westcoast Energy Inc.7.15% due Mar. 20, 2031 50,325 57,446

20,000 Wilfrid Laurier University5.43% due Feb. 1, 2045 20,000 19,513

20,000 Winnipeg Airports Authority Inc.5.21% due Sep. 28, 2040 20,000 18,145

100,000 York University6.48% due Mar. 7, 2042 99,972 114,438

71,394,634 73,507,229



NET ASSETS – 100.0% 285,081,531





Federal Bonds 48.8 44.9Provincial Bonds 24.4 26.4Municipal Bonds 0.6 1.5Corporate Bonds 25.8 26.0




(Level 2) ($)



Bonds and Debentures – 283,995,992 – 283,995,992



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A. Risk managementThe investment objective of the Scotia Canadian Bond Index Fund (the “Fund”)is to provide a high level of regular interest income and modest capital gains bytracking the performance of the generally recognized Canadian bond index,currently the DEX Universe Bond Index. The investment portfolio is comprisedprimarily of bonds and treasury bills issued by Canadian federal, provincial andmunicipal governments and Canadian corporations and money market instru-ments issued by Canadian corporations, including commercial paper andbankers’ acceptances.









Less than 1 year 8,289,880 5,239,2661-3 years 71,227,734 28,512,9643-5 years 70,300,405 34,873,1775-10 years 58,884,348 27,543,068H 10 years 75,293,625 36,883,964

Total 283,995,992 133,052,439




Debt instruments, excluding cash and cash equivalents but including preferredshares, held by the Fund have credit rating as follows:








AAA 51.3 51.1 51.0 50.3AA 23.6 23.5 25.1 24.8A 22.7 22.6 22.0 21.8BBB 2.4 2.4 1.9 1.9Unrated 0.0 0.0 0.0 0.0

Total 100.0 99.6 100.0 98.8




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Scotia Canadian Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $237,792,214 $159,402,637Cash 1,102,357 678,626Accrued investment income 593,299 513,247Receivable for securities sold 342,229 –Subscriptions receivable 280,972 112,069

240,111,071 160,706,579

LIABILITIESPayable for securities purchased 707,379 179,191Distributions payable 631 676Redemptions payable 389,493 82,626Accrued expenses 90,894 117,724

1,188,397 380,217

Net Assets $238,922,674 $160,326,362

NET ASSETS PER CLASSClass A Units $209,008,545 $138,440,958Class F Units $ 130,155 $ 16,542Class I Units $ 29,783,974 $ 21,868,862

UNITS OUTSTANDINGClass A Units 10,462,534 9,163,769Class F Units 6,549 1,110Class I Units 1,518,951 1,472,028



2009 2008INVESTMENT INCOMEDividends $ 5,003,768 $ 3,834,450Interest 1,240,820 2,027,257Capital gains distributions received 16,982 5,836Securities lending 66,969 124,476Foreign withholding taxes/Tax reclaims (73) (3,309)

6,328,466 5,988,710



1,735,205 1,817,723


Net realized gain (loss) on investments sold (22,821,696) (99,223)Net realized gain (loss) on foreign exchange (63) (7,412)Transaction costs (43,667) (32,692)Change in unrealized appreciation (depreciation) of investments 78,065,492 (80,131,440)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 52,185,384 $(67,090,673)Class F Units $ 9,924 $ 342Class I Units $ 7,598,019 $ (9,009,449)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 5.27 $ (7.77)Class F Units $ 3.39 $ 0.32Class I Units $ 5.52 $ (7.57)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $138,440,958 $202,357,942Class F Units 16,542 –Class I Units 21,868,862 25,580,998

160,326,362 227,938,940

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 52,185,384 (67,090,673)Class F Units 9,924 342Class I Units 7,598,019 (9,009,449)

59,793,327 (76,099,780)


Class A Units (3,364,121) (3,428,918)Class F Units (2,968) (626)Class I Units (714,605) (829,063)

(4,081,694) (4,258,607)



Reinvested distributionsClass A Units 3,328,989 3,390,305Class F Units 2,968 626Class I Units 714,605 828,966

Payments on redemptionClass A Units (26,455,800) (29,498,567)Class F Units (17,047) –Class I Units (11,919,269) (4,903,018)

22,884,679 12,745,809

INCREASE (DECREASE) IN NET ASSETSClass A Units 70,567,587 (63,916,984)Class F Units 113,613 16,542Class I Units 7,915,112 (3,712,136)

78,596,312 (67,612,578)


$238,922,674 $160,326,362


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AverageCost ($)

FairValue ($)

CANADIAN EQUITIES – 99.5%Energy – 27.6%

28,543 Advantage Oil & Gas Ltd. 416,310 195,52014,700 AltaGas Income Trust 356,141 275,91944,600 ARC Energy Trust 1,076,071 889,32419,956 Baytex Energy Trust 406,701 589,30122,100 Birchcliff Energy Ltd. 286,323 207,74022,700 Bonavista Energy Trust 713,655 505,52972,142 Cameco Corporation 965,394 2,439,12099,632 Canadian Natural Resources Limited 2,607,991 7,539,15288,776 Canadian Oil Sands Trust 2,615,537 2,643,748

6,465 Celtic Exploration Ltd. 132,403 134,407138,496 Cenovus Energy Inc. 2,015,900 3,665,98837,600 Crescent Point Energy Corp. 1,065,652 1,483,32014,200 Crew Energy Inc. 200,565 207,17832,007 Daylight Resources Trust 322,770 325,51169,217 Enbridge Inc. 1,685,464 3,360,485

138,496 EnCana Corporation 2,280,692 4,715,7888,800 Enerflex Systems Income Fund 123,942 127,424

32,230 Enerplus Resources Fund 1,597,355 776,74323,300 Ensign Resource Service, Inc. 159,455 349,50026,000 Fort Chicago Energy Partners LP 282,252 259,220

7,500 Freehold Royalty Trust 157,059 112,87545,280 Husky Energy Inc. 682,423 1,359,30646,717 Imperial Oil Ltd. 1,117,965 1,897,17747,500 Inter Pipeline Fund 459,697 513,47523,395 Just Energy Income Fund 392,694 336,88812,320 Keyera Facilities Income Fund 237,067 299,86915,700 Mullen Group Ltd. 348,517 255,28226,200 NAL Oil & Gas Trust 400,133 357,89295,540 Nexen Inc. 1,277,402 2,401,876

7,900 Niko Resources Ltd. 283,238 776,01717,500 NuVista Energy Ltd. 234,339 217,35032,900 Pacific Rubiales Energy Corp. 189,039 506,66017,837 Paramount Energy Trust 207,606 92,75211,000 Pason Systems Inc. 125,272 127,82027,500 Pembina Pipeline Income Fund 432,219 480,42553,180 Pengrowth Energy Trust 1,005,539 538,18278,704 Penn West Energy Trust 2,610,425 1,457,59811,371 PetroBakken Energy Ltd. 378,087 367,39716,800 Petrobank Energy and Resources Ltd. 395,157 857,30422,500 Peyto Energy Trust 465,757 314,32548,600 Precision Drilling Trust 763,225 369,36031,025 Progress Energy Resources Corp. 464,244 437,45346,400 Provident Energy Trust 551,173 327,12015,600 Savanna Energy Services Corp. 236,572 107,32811,300 ShawCor Ltd. 164,154 330,864

287,778 Suncor Energy, Inc. 4,981,188 10,679,442186,452 Talisman Energy Inc. 1,713,539 3,645,137125,611 TransCanada Corporation 3,346,799 4,540,83823,900 Trican Well Service Ltd. 155,657 334,12224,300 Trinidad Drilling Ltd. 296,592 170,34389,325 Uranium One, Inc. 935,344 267,97592,700 UTS Energy Corporation 253,412 208,57515,000 Vermilion Energy Trust 456,060 486,000

45,028,167 65,865,944

Materials – 19.3%28,764 Agnico-Eagle Mines Limited 899,736 1,633,50828,866 Agrium Inc. 895,043 1,867,91920,600 Alamos Gold Inc. 192,494 257,50026,500 Aurizon Mines Ltd. 150,835 124,550

180,629 Barrick Gold Corporation 5,863,279 7,478,04116,613 Canfor Corporation 141,491 134,565

4,700 CCL Industries Inc., Class B 74,953 131,55312,513 Centerra Gold Inc. 133,638 133,63935,200 Consolidated Thompson Iron Mines Limited 188,129 236,89612,700 Detour Gold Corporation 174,982 226,18798,678 Eldorado Gold Corporation 691,522 1,467,342


AverageCost ($)

FairValue ($)

CANADIAN EQUITIES (cont’d)Materials (cont’d)

113,000 Equinox Minerals Limited 270,896 456,52020,800 European Goldfields Limited 116,506 125,21614,853 First Quantum Minerals Ltd. 578,574 1,191,95319,867 FNX Mining Company Inc. 312,155 228,66920,500 Franco-Nevada Corporation 620,793 575,64036,141 Gabriel Resources Ltd. 160,101 155,76826,300 Gammon Gold, Inc. 262,352 303,50225,500 Gerdau Ameristeel Corporation 230,797 221,850

134,625 Goldcorp, Inc. 2,497,938 5,561,35958,800 Great Basin Gold Ltd. 106,187 105,84026,300 HudBay Minerals, Inc. 294,300 355,57669,432 IAMGOLD Corporation 600,047 1,144,934

9,140 Inmet Mining Corporation 244,942 580,93844,498 Ivanhoe Mines Ltd. 251,986 683,934

127,441 Kinross Gold Corporation 1,599,257 2,463,4355,900 Labrador Iron Ore Royalty Income Fund 154,174 256,886

38,387 Lake Shore Gold Corporation 159,686 156,61997,106 Lundin Mining Corporation 692,376 414,643

4,800 Major Drilling Group International Inc. 178,740 136,80017,600 Methanex Corporation 230,791 359,56812,000 Minefinders Corporation Ltd. 117,277 130,08075,100 New Gold Inc. 347,197 283,87845,300 Osisko Mining Corporation 276,649 381,87919,522 Pan American Silver Corp. 293,901 487,85554,360 Potash Corporation of Saskatchewan Inc. 2,325,604 6,203,02019,329 Quadra Mining Ltd. 290,824 280,27143,000 Red Back Mining Inc. 346,954 639,84030,399 Rubicon Minerals Corp. 151,384 150,17146,061 SEMFAFO Inc. 206,349 201,74754,159 Sherritt International Corporation 494,838 353,65812,500 Silver Standard Resources Inc. 286,488 286,50062,701 Silver Wheaton Corp. 771,305 990,04926,600 Silvercorp Metals Inc. 180,259 184,60440,900 Sino-Forest Corporation 449,510 790,18833,510 Taseko Mines Ltd. 156,488 147,44488,695 Teck Resources Limited, Class B 1,337,781 3,255,10726,600 Thompson Creek Metals Company, Inc. 314,367 327,180

6,113 West Fraser Timber Co. Ltd. 209,276 201,179134,722 Yamana Gold Inc. 1,375,872 1,611,275

28,901,023 46,077,275

Industrials – 5.5%9,400 Aecon Group Inc. 179,416 140,718

275,160 Bombardier Inc., Class B 2,810,805 1,318,01647,000 CAE, Inc. 324,093 409,84086,369 Canadian National Railway Company 2,244,053 4,935,98830,908 Canadian Pacific Railway Limited 844,105 1,752,48432,600 Finning International Inc. 356,604 540,83423,600 Jazz Air Income Fund 156,744 103,60419,500 Ritchie Bros. Auctioneers Incorporated 525,633 459,81011,700 Russel Metals Inc. 134,637 206,50527,745 SNC-Lavalin Group Inc. 450,502 1,496,010

7,950 Stantec Inc. 206,000 240,09017,400 Superior Plus Corp. 329,001 254,21411,700 Toromont Industries Ltd. 120,699 324,558

6,700 Transat A.T. Inc., Class B 126,898 140,63312,600 Transcontinental Inc. 130,518 161,28011,983 TransForce, Inc. 219,887 99,93827,500 WestJet Airlines Ltd. 321,311 339,35011,204 Westshore Terminals Income Fund 136,182 159,545

9,617,088 13,083,417

Consumer Discretionary – 4.4%9,800 Astral Media Inc. 192,788 324,968

14,560 Canadian Tire Corporation, Limited 443,237 835,01611,100 Cineplex Galaxy Income Fund 181,364 202,242

5,000 Cogeco Cable Inc. 174,501 174,60013,300 Corus Entertainment Inc., Class B 259,791 262,675


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CANADIAN EQUITIES (cont’d)Consumer Discretionary (cont’d)

5,100 Dorel Industries Inc., Class B 135,549 164,1695,000 Forzani Group Ltd., The 83,988 70,300

19,048 Gildan Activewear Inc. 290,240 487,05736,737 Groupe Aeroplan, Inc. 613,336 400,06615,700 IESI-BFC Ltd. 321,078 263,28920,562 Magna International Inc. 1,389,131 1,093,487

8,700 Quebecor Inc., Class B 278,911 235,8579,300 Reitmans (Canada) Limited 177,199 154,938

23,590 RONA inc. 329,173 363,9945,500 Sears Canada Inc. 123,954 131,120

68,550 Shaw Communications, Inc., Class B 1,107,178 1,480,68066,740 Thomson Reuters Corporation 2,620,671 2,262,48633,300 Tim Hortons, Inc. 1,013,387 1,067,93190,700 Yellow Pages Income Fund 1,360,435 486,152

11,095,911 10,461,027

Consumer Staples – 2.8%24,200 Alimentation Couche-Tard Inc., Class B 138,974 502,15014,938 Cott Corporation 136,382 128,766

5,200 Empire Company Limited 141,072 245,2848,800 George Weston Limited 538,344 588,016

21,100 Jean Coutu Group (PJC) Inc., The 263,679 204,45918,800 Loblaw Companies Limited 781,808 635,816

7,800 Maple Leaf Foods Inc. 93,949 90,48020,100 Metro Inc. 391,129 787,920

9,000 North West Company Fund, The 156,012 170,91025,196 Saputo Inc. 452,830 774,77739,945 Shoppers Drug Mart Corporation 1,310,078 1,813,10467,800 Viterra, Inc. 643,574 668,508

5,047,831 6,610,190

Health Care – 0.4%28,900 Biovail Corporation 1,175,490 423,09615,800 CML Healthcare Income Fund 225,019 218,19817,312 MDS Inc. 346,421 138,496

4,400 SXC Health Solutions Corp. 147,608 249,480

1,894,538 1,029,270

Financials – 30.3%12,700 AGF Management Limited, Class B 270,556 215,519

101,399 Bank of Montreal 3,747,997 5,657,050188,305 Bank of Nova Scotia, The 5,842,371 9,262,723

7,200 Boardwalk Real Estate Investment Trust 141,243 264,81690,384 Brookfield Asset Management Inc. 1,109,107 2,109,56346,935 Brookfield Properties Corporation 563,391 597,48312,100 Calloway Real Estate Investment Trust 239,280 235,46612,000 Canadian Apartment Properties Real Estate Investment Trust 168,462 168,24071,060 Canadian Imperial Bank of Commerce 3,525,535 4,828,52712,300 Canadian Real Estate Investment Trust 268,503 333,45310,900 Canadian Western Bank 119,693 238,71019,900 Chartwell Seniors Housing Real Estate Investment Trust 221,544 139,49930,200 CI Financial Corp. 422,377 660,474

9,700 Cominar Real Estate Investment Trust 209,997 187,0168,400 Davis + Henderson Income Fund 152,777 141,792

14,000 Dundee Corporation 226,620 168,28014,200 Extendicare Real Estate Investment Trust 165,542 134,616

3,592 Fairfax Financial Holdings Limited 1,011,526 1,471,2835,100 FirstService Corporation 104,608 102,510

48,172 Great-West Lifeco Inc. 870,684 1,291,97326,900 H&R Real Estate Investment Trust 489,181 414,260

5,400 Home Capital Group Inc. 165,181 225,12619,436 IGM Financial, Inc. 463,041 820,78215,000 Industrial Alliance Insurance and Financial Services Inc. 327,623 481,80022,092 Intact Financial Corporation 771,729 814,753

4,700 Laurentian Bank of Canada 123,763 200,314322,326 Manulife Financial Corporation 6,997,724 6,220,89229,606 National Bank of Canada 901,618 1,781,09717,300 Onex Corporation 304,201 406,89661,528 Power Corporation of Canada 1,080,850 1,791,695


AverageCost ($)

FairValue ($)

CANADIAN EQUITIES (cont’d)Financials (cont’d)

41,491 Power Financial Corporation 696,612 1,285,80611,100 Primaris Retail Real Estate Investment Trust 150,552 179,04345,100 RioCan Real Estate Investment Trust 868,320 894,784

261,547 Royal Bank of Canada 7,728,951 14,740,789103,341 Sun Life Financial Inc. 3,109,230 3,117,79813,800 TMX Group Inc. 400,359 456,918


51,124,536 72,501,479

Information Technology – 3.5%39,960 Celestica Inc. 1,818,889 395,20448,393 CGI Group Inc. 620,143 687,181

7,700 MacDonald, Dettwiler and Associates Ltd. 208,880 327,86610,800 Open Text Corporation 290,334 460,51292,024 Research In Motion Limited 3,582,163 6,530,023

6,520,409 8,400,786

Telecommunication Services – 4.2%140,944 BCE Inc. 4,545,919 4,080,32924,279 Bell Aliant Regional Communications Income Fund 797,826 678,59811,800 Manitoba Telecom Services Inc. 364,809 394,23892,372 Rogers Communications, Inc., Class B 1,839,645 3,007,63258,365 TELUS Corporation 1,932,996 1,986,745

9,481,195 10,147,542

Utilities – 1.5%7,700 ATCO Ltd. Class I 177,607 352,8919,620 Brookfield Renewable Power Fund 183,260 183,742

10,600 Canadian Utilities Limited 298,967 463,5387,600 Capital Power Income L.P. 219,005 117,648

20,300 Emera Inc. 334,395 508,92131,600 Fortis, Inc. 555,665 906,28811,900 Northland Power Income Fund 153,382 141,37240,123 TransAlta Corporation 839,334 940,884

2,761,615 3,615,284



NET ASSETS – 100.0% 238,922,674




Energy 27.6 27.2Materials 19.3 17.5Industrials 5.5 6.1Consumer Discretionary 4.4 4.6Consumer Staples 2.8 3.4Health Care 0.4 0.4Financials 30.3 29.1Information Technology 3.5 3.3Telecommunication Services 4.2 6.0Utilities 1.5 1.8




(Level 2) ($)



Equities 237,792,214 – – 237,792,214



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A. Risk managementThe investment objective of the Scotia Canadian Index Fund (the “Fund”) islong-term capital growth by tracking the performance of a generally recognizedCanadian equity index, currently the S&P/TSX Composite Index. It investsprimarily in the stocks that are included in the index.




D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009 and December 31, 2008, the

majority of the Fund’s financial assets and liabilities are non-interest bearing,accordingly, the Fund is not subject to material amounts of risk due tofluctuations in the prevailing levels of interest rates.




F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, S&P/TSX Composite Index, as ofDecember 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $47,306,689, 19.8% of the Fund’s NetAssets (December 31, 2008-$15,780,861, 9.8% of the Fund’s Net Assets). TheFund’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia U.S. Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31


67,207,431 45,496,634

LIABILITIESDistributions payable 10,618 17,653Redemptions payable 89,613 18,553Accrued expenses 19,539 31,545

119,770 67,751

Net Assets $67,087,661 $45,428,883

NET ASSETS PER CLASSClass A Units $40,727,272 $36,613,346Class I Units $26,360,389 $ 8,815,537

UNITS OUTSTANDINGClass A Units 3,809,095 3,665,200Class I Units 2,461,777 879,288



2009 2008INVESTMENT INCOMEDividends $ 1,227,965 $ 1,323,780Interest/Overdraft Charges 1,835 (1,528)Securities lending 15,532 321Foreign withholding taxes/Tax reclaims (178,550) (197,981)

1,066,782 1,124,592



362,189 384,357


Net realized gain (loss) on investments sold (1,909,745) (3,043,543)Net realized gain (loss) on foreign exchange 12,350 (10,833)Transaction costs (1,168) (1,711)Change in unrealized appreciation (depreciation) of investments 6,136,164 (11,472,314)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 3,078,133 $(11,025,762)Class I Units $ 1,864,061 $ (2,762,404)



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $36,613,346 $ 48,043,872Class I Units 8,815,537 15,590,124

45,428,883 63,633,996

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 3,078,133 (11,025,762)Class I Units 1,864,061 (2,762,404)

4,942,194 (13,788,166)


Class A Units (311,066) (530,859)Class I Units (401,789) (194,513)

(712,855) (725,372)



Reinvested distributionsClass A Units 288,114 492,005Class I Units 401,789 194,496


17,429,439 (3,691,575)

INCREASE (DECREASE) IN NET ASSETSClass A Units 4,113,926 (11,430,526)Class I Units 17,544,852 (6,774,587)

21,658,778 (18,205,113)


$67,087,661 $ 45,428,883


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Scotia U.S. Index Fund (Continued)



AverageCost ($)

FairValue ($)


3,210 Anadarko Petroleum Corporation 134,372 210,4382,222 Apache Corporation 108,008 240,7642,122 Baker Hughes Incorporated 98,214 90,1262,100 BJ Services Company 56,860 41,023

500 Cabot Oil & Gas Corporation 33,275 22,8901,500 Cameron International Corporation 64,610 65,8514,300 Chesapeake Energy Corporation 137,505 116,786

12,731 Chevron Corporation 874,399 1,029,0169,228 ConocoPhillips 454,241 494,4731,300 Denbury Resources Inc. 24,920 20,2072,878 Devon Energy Corporation 162,857 222,164

500 Diamond Offshore Drilling, Inc. 44,072 51,6834,892 El Paso Corporation 172,974 50,4021,620 EOG Resources, Inc. 89,137 165,547

900 EQT Corporation 36,502 41,48630,259 Exxon Mobil Corporation 2,000,224 2,164,831

300 First Solar, Inc. 47,390 42,661700 FMC Technologies, Inc. 32,752 42,523

5,984 Halliburton Company 167,938 188,9821,968 Hess Corporation 101,547 124,9654,490 Marathon Oil Corporation 124,666 147,222

400 Massey Energy Company 36,373 17,6191,300 Murphy Oil Corporation 83,958 74,0012,000 Nabors Industries Ltd. 64,828 45,9802,800 National-Oilwell Varco Inc. 120,330 129,6561,200 Noble Energy, Inc. 84,911 89,7595,032 Occidental Petroleum Corporation 194,075 429,5021,800 Peabody Energy Corporation 77,413 85,316

800 Pioneer Natural Resources Company 41,104 40,473900 Range Resources Corporation 47,688 47,082516 Rowan Companies, Inc. 17,263 12,269

7,746 Schlumberger Limited 427,576 529,5251,286 Smith International, Inc. 50,596 36,6292,300 Southwestern Energy Company 105,470 116,431

592 Sunoco, Inc. 26,274 16,228600 Tesoro Corporation 30,237 8,539

3,800 Valero Energy Corporation 121,311 66,8493,945 Williams Companies Inc., The 145,585 87,2573,707 XTO Energy, Inc. 128,034 180,999

6,769,489 7,588,154

Materials – 3.5%1,406 Air Products and Chemicals, Inc. 93,432 119,609

400 Airgas, Inc. 19,826 19,980500 AK Steel Holding Corporation 35,180 11,211

6,596 Alcoa Inc. 205,450 111,671559 Allegheny Technologies, Inc. 49,136 26,284551 Avery Dennison Corporation 36,766 21,116708 Ball Corporation 21,862 38,443694 Bemis Company, Inc. 18,078 21,611270 CF Industries Holdings Inc. 42,248 25,742800 Cliffs Natural Resources Inc. 37,513 38,683

1,107 CONSOL Energy Inc. 61,062 57,8996,936 Dow Chemical Company, The 262,936 201,2735,427 E.I.duPont de Nemours and Company 325,039 191,853

341 Eastman Chemical Company 22,179 21,5491,550 Ecolab Inc. 64,867 72,572

500 FMC Corporation 27,690 29,2812,663 Freeport-McMoRan Copper & Gold Inc., Class B 145,351 224,557

458 International Flavors & Fragrances Inc. 21,528 19,7892,999 International Paper Company 141,709 84,349

971 MeadWestvaco Corporation 32,068 29,1973,522 Monsanto Company 170,370 302,3933,280 Newmont Mining Corporation 133,482 162,9752,168 Nucor Corporation 104,077 106,220

900 Owens-Illinois, Inc. 29,870 31,070850 Pactiv Corporation 20,695 21,523


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Materials (cont’d)

1,110 PPG Industries, Inc. 81,991 68,1981,980 Praxair, Inc. 96,670 167,005

790 Sealed Air Corporation 30,622 18,121700 Sigma-Aldrich Corporation 33,234 37,149300 Titanium Metals Corporation 10,319 3,945821 United States Steel Corporation 50,122 47,528

2,425,372 2,332,796

Industrials – 10.4%4,612 3M Company 324,624 400,0474,793 Boeing Company, The 316,327 272,2821,713 Burlington Northern Santa Fe Corporation 114,448 177,4261,100 C.H. Robinson Worldwide, Inc. 66,499 67,8504,028 Caterpillar Inc. 171,515 241,092

820 Cintas Corporation 33,155 22,4342,486 CSX Corporation 90,239 126,6041,372 Cummins Inc. 49,629 66,0681,734 Danaher Corporation 89,500 136,9502,659 Deere & Company 89,350 150,8581,145 Dover Corporation 56,941 50,038

303 Dun & Bradstreet Corporation, The 29,509 26,8461,112 Eaton Corporation 70,537 74,3014,828 Emerson Electric Co. 201,709 216,009

767 Equifax Inc. 34,552 24,8831,500 Expeditors International of Washington, Inc. 69,276 54,713

700 Fastenal Company 35,959 30,6132,050 FedEx Corporation 138,270 179,4112,000 Fidelity National Information Service, Inc. 54,505 49,2361,100 Fiserv, Inc. 53,941 56,0081,100 FLIR Systems, Inc. 35,503 37,801

300 Flowserve Corporation 24,503 29,7841,204 Fluor Corporation 50,039 56,9412,496 General Dynamics Corporation 128,316 178,520

67,556 General Electric Company 2,735,355 1,073,489891 Goodrich Corporation 46,714 60,124

4,972 Honeywell International Inc. 305,310 204,5932,593 Illinois Tool Works Inc. 120,240 130,6641,000 Iron Mountain Incorporated 28,817 23,9041,247 ITT Corporation 64,094 65,1431,432 Jabil Circuit, Inc. 46,517 26,124

725 Jacobs Engineering Group Inc. 52,397 28,638800 L-3 Communications Holdings, Inc. 75,505 73,056

2,077 Lockheed Martin Corporation 141,361 164,2361,916 Masco Corporation 70,350 27,7901,075 Molex Incorporated 43,634 24,3302,305 Norfolk Southern Corporation 90,664 126,8031,998 Northrop Grumman Corporation 119,808 117,0912,484 PACCAR Inc. 53,063 94,622

902 Pall Corporation 29,502 34,2841,075 Parker-Hannifin Corporation 45,007 60,7871,090 Pitney Bowes Inc. 75,641 26,055

882 Precision Castparts Corp. 106,007 102,2201,500 Quanta Services, Inc. 38,524 32,8311,518 R. R. Donnelley & Sons Company 51,956 35,5052,449 Raytheon Company 140,983 132,5132,221 Republic Services, Inc. 72,379 65,9901,086 Robert Half International, Inc. 43,697 30,488

753 Rockwell Automation, Inc. 52,479 37,154953 Rockwell Collins, Inc. 39,115 55,349589 Roper Industries, Inc. 33,188 32,396367 Ryder System, Inc. 19,905 15,842500 Stericycle, Inc. 37,566 28,971

1,928 Textron Inc. 75,459 38,0273,056 Union Pacific Corporation 141,539 204,8996,362 United Parcel Service, Inc., Class B 547,527 382,9965,856 United Technologies Corporation 303,134 426,461

863 Vulcan Materials Company 56,705 47,739405 W.W. Grainger, Inc. 36,742 41,187


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EQUITIES (cont’d)Industrials (cont’d)

3,304 Waste Management, Inc. 140,162 117,3221,464 Weyerhaeuser Company 96,362 66,285

8,506,254 6,982,623

Consumer Discretionary – 10.0%400 Abercrombie & Fitch Co. 35,290 14,615

2,000 Amazon.com, Inc. 132,872 282,561835 Apollo Group, Inc. 52,443 53,126600 AutoNation, Inc. 12,105 12,042197 AutoZone, Inc. 15,368 32,703

1,768 Bed Bath & Beyond Inc. 52,913 71,7302,327 Best Buy Co., Inc. 99,847 96,438

473 Big Lots, Inc. 15,426 14,396300 Black & Decker Corporation, The 18,985 20,423

2,966 Carnival Corporation 143,754 98,7164,759 CBS Corporation, Class B 202,806 70,2242,200 Coach, Inc. 64,299 84,335

18,385 Comcast Corporation 458,687 325,5491,500 D.R. Horton, Inc. 68,946 17,124

834 Darden Restaurants, Inc. 18,713 30,709400 DeVry, Inc. 20,469 23,832

6,142 DIRECTV Group Inc., The 182,735 215,0651,710 Eastman Kodak Company 162,571 7,5797,200 eBay Inc. 159,897 178,0061,500 Expedia, Inc. 45,136 40,503

845 Family Dollar Stores, Inc. 35,651 24,68921,600 Ford Motor Company 423,870 226,401

1,075 Fortune Brands, Inc. 51,844 48,7741,200 GameStop Corp. 54,633 27,6511,244 Gannett Co., Inc. 116,661 19,4023,157 GAP Inc., The 139,293 69,4631,082 Genuine Parts Company 42,936 43,1371,433 Goodyear Tire & Rubber Company, The 60,603 21,2212,396 H&R Block, Inc. 43,029 56,8961,706 Harley-Davidson, Inc. 79,404 45,152

300 Harman International Industries, Incorporated 37,749 11,103941 Hasbro, Inc. 28,061 31,685

10,441 Home Depot Inc., The 495,388 316,9092,040 International Game Technology 45,835 40,2153,129 Interpublic Group of Companies, Inc., The 162,352 24,1871,659 J.C. Penney Company, Inc. 69,265 46,3124,186 Johnson Controls, Inc. 77,004 119,7132,001 Kohl’s Corporation 125,910 113,337

677 Leggett & Platt, Incorporated 21,092 14,505700 Lennar Corporation 50,332 9,366

1,988 Limited Brands, Inc. 45,384 40,1718,898 Lowe’s Companies, Inc. 190,060 218,4902,894 Macy’s, Inc. 72,466 50,9411,651 Marriott International, Inc. 41,086 47,2402,556 Mattel, Inc. 61,358 53,6356,941 McDonald’s Corporation 379,609 454,8852,196 McGraw-Hill Companies, Inc., The 78,926 77,263

376 Meredith Corporation 17,698 12,167520 Monster Worldwide, Inc. 47,902 9,486548 New York Times Company, The 27,792 7,114

1,556 Newell Rubbermaid Inc. 63,287 24,52914,489 News Corporation 273,753 208,323

2,540 NIKE, Inc., Class B 122,016 176,225956 Nordstrom, Inc. 17,536 37,732

1,000 O’Reilly Automotive, Inc. 42,452 40,0361,173 Office Depot, Inc. 29,591 7,9342,162 Omnicom Group Inc. 104,904 88,896

300 Polo Ralph Lauren Corporation 29,509 25,515200 priceline.com Incorporated 35,772 45,768

1,410 Pulte Home, Inc. 20,638 14,809778 RadioShack Corporation 30,854 15,925700 Ross Stores Inc 32,016 31,399400 Scripps Networks Interactive Inc. 15,522 17,434296 Sears Holdings Corporation 41,609 25,943


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Consumer Discretionary (cont’d)

660 Sherwin-Williams Company, The 38,891 42,734169 Snap-on Incorporated 7,710 7,501

5,214 Southwest Airlines Co. 84,633 62,591534 Stanley Works, The 32,559 28,861

4,831 Staples, Inc. 110,154 124,7644,960 Starbucks Corporation 83,421 120,1261,300 Starwood Hotels & Resorts Worldwide, Inc. 64,776 49,9174,839 Target Corporation 218,558 245,724

896 Tiffany & Co. 40,180 40,4082,373 Time Warner Cable Inc. 344,346 103,1547,669 Time Warner Inc. 841,365 234,4642,768 TJX Companies Inc., The 64,980 106,226

598 VF Corporation 35,162 45,9924,054 Viacom, Inc., Class B 240,413 126,412

11,994 Walt Disney Company, The 451,766 406,24525 Washington Post Company, The, Class B 19,866 11,541

517 Whirlpool Corporation 42,282 43,764996 Wyndham Worldwide Corporation 58,195 21,068400 Wynn Resorts, Limited 19,099 24,412

3,136 Yum! Brands, Inc. 65,755 115,144

8,810,025 6,692,702

Consumer Staples – 11.3%13,352 Altria Group, Inc. 168,354 275,131

4,351 Archer Daniels Midland Company 99,964 143,0762,914 Avon Products, Inc. 86,682 96,404

587 Brown-Forman Corporation, Class B 28,911 33,0261,153 Campbell Soup Company 54,396 40,930

970 Clorox Company, The 62,232 62,14414,614 Coca-Cola Company, The 1,040,094 874,400

1,768 Coca-Cola Enterprises Inc. 52,153 39,3473,198 Colgate-Palmolive Company 236,273 275,8513,057 ConAgra Foods, Inc. 95,951 74,005

900 Constellation Brands, Inc. 32,969 15,0482,619 Costco Wholesale Corporation 160,453 162,7549,080 CVS Caremark Corporation 284,849 307,0691,400 Dean Foods Company 45,871 26,5111,400 Dr. Pepper Snapple Group, Inc. 36,462 41,567

600 Estee Lauder Companies Inc., The 24,170 30,4742,081 General Mills, Inc. 131,140 154,7612,158 H.J. Heinz Company 119,692 96,9131,160 Hershey Company, The 45,502 43,591

300 Hormel Foods Corporation 11,925 12,112800 J.M. Smucker Company, The 41,688 51,883

1,715 Kellogg Company 82,469 95,8052,728 Kimberly-Clark Corporation 203,606 182,5359,433 Kraft Foods Inc. 323,333 269,1754,392 Kroger Co., The 135,884 94,6991,100 Lorillard, Inc. 84,320 92,688

800 McCormick & Company, Incorporated 29,829 30,357897 Mead Johnson Nutrition Co. 39,617 41,112

1,114 Molson Coors Brewing Company, Class B 52,249 52,813969 Pepsi Bottling Group Inc., The 33,815 38,164

10,126 PepsiCo, Inc. 580,586 646,28212,359 Philip Morris International Inc. 375,768 624,73218,605 Procter & Gamble Company, The 1,130,854 1,184,124

1,200 Reynolds American Inc. 67,186 66,7582,574 Safeway Inc. 147,796 57,5544,850 Sara Lee Corporation 108,231 61,9911,230 SUPERVALU INC 39,556 16,4063,982 Sysco Corporation 111,144 116,7231,500 Tyson Foods, Inc. 32,705 19,330

13,833 Wal-Mart Stores, Inc. 878,412 776,2406,386 Walgreen Co. 253,435 246,0101,000 Whole Foods Markets, Inc. 66,590 28,514

7,637,116 7,599,009

Health Care – 12.7%9,990 Abbott Laboratories 584,102 566,0462,652 Aetna Inc. 47,455 88,098


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EQUITIES (cont’d)Health Care (cont’d)

2,016 Allergan, Inc. 102,126 133,4121,812 AmerisourceBergen Corporation 44,392 49,5566,493 Amgen Inc. 417,029 385,7683,813 Baxter International Inc. 219,521 234,9911,573 Becton, Dickinson and Company 83,481 130,2811,911 Biogen Idec Inc. 137,599 107,376

10,197 Boston Scientific Corporation 181,984 96,17111,766 Bristol-Myers Squibb Company 796,684 311,898

594 C. R. Bard, Inc. 28,755 48,5292,450 Cardinal Health, Inc. 140,931 82,932

875 Carefusion Corporation 19,015 22,9842,900 Celgene Corporation 172,160 169,587

500 Cephalon, Inc. 39,711 32,7731,920 CIGNA Corporation 71,601 71,122

900 Coventry Health Care, Inc. 56,489 22,912600 DaVita, Inc. 34,923 36,977

1,100 DENTSPLY International Inc. 40,073 40,6316,107 Eli Lilly and Company 494,153 228,7841,800 Express Scripts, Inc. 81,818 163,3552,080 Forest Laboratories, Inc. 95,629 70,1231,816 Genzyme Corporation 148,693 93,4755,800 Gilead Sciences, Inc. 208,783 263,6392,000 HCP, Inc. Real Estate Investment Trust 66,154 64,150

949 Hospira, Inc. 36,674 50,8311,184 Humana Inc. 48,370 54,478

944 IMS Health Incorporated 32,831 20,880233 Intuitive Surgical, Inc. 65,500 74,225

17,478 Johnson & Johnson 1,137,112 1,180,865996 King Pharmaceuticals, Inc. 42,743 12,825700 Laboratory Corporation of America Holdings 43,904 55,021

1,186 Life Technologies Corporation 41,293 65,0581,799 McKesson Corporation 107,231 118,0693,049 Medco Health Solutions, Inc. 90,696 204,6546,781 Medtronic, Inc. 366,326 313,002

19,286 Merck & Co., Inc. 1,148,972 739,315305 Millipore Corporation 21,267 23,176

1,800 Mylan Inc. 44,583 34,841700 Patterson Companies, Inc. 25,368 20,570929 PerkinElmer, Inc. 24,963 20,089

52,218 Pfizer Inc. 1,791,629 997,5801,000 Quest Diagnostics Incorporated 50,397 63,4042,076 St. Jude Medical, Inc. 59,364 80,1271,760 Stryker Corporation 82,940 93,1063,395 Tenet Healthcare Corporation 56,578 19,2192,601 Thermo Fisher Scientific, Inc. 116,541 130,1397,497 UnitedHealth Group Incorporated 196,326 239,913

900 Varian Medical Systems, Inc. 48,123 44,246608 Waters Corporation 36,460 39,533614 Watson Pharmaceuticals, Inc. 26,975 25,517

3,024 WellPoint Inc. 146,984 184,8411,468 Zimmer Holdings, Inc. 67,170 91,073

10,270,581 8,512,167

Financials – 14.9%3,154 Aflac Incorporated 124,431 153,2033,662 Allstate Corporation, The 154,172 115,4967,614 American Express Company 396,635 323,7841,009 American International Group, Inc. 1,087,025 31,7701,622 Ameriprise Financial, Inc. 61,857 66,1301,908 Aon Corporation 94,160 76,829

390 Apartment Investment and Management Company 15,079 6,521600 Assurant, Inc. 35,396 18,577420 AvalonBay Communities, Inc. 59,445 36,188

63,002 Bank of America Corporation 1,927,209 996,4927,982 Bank of New York Mellon Corporation, The 352,824 234,3924,599 BB&T Corporation 180,009 122,540

936 Boston Properties, Inc. 88,814 65,9233,043 Capital One Financial Corporation 182,673 122,5321,800 CB Richard Ellis Group, Inc. 40,536 25,635


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Financials (cont’d)

6,318 Charles Schwab Corporation, The 193,647 124,8802,198 Chubb Corporation, The 108,512 113,530

773 Cincinnati Financial Corporation 33,644 21,303125,742 Citigroup Inc. 1,744,235 437,122

425 CME Group Inc. 199,261 149,9541,110 Comerica Incorporated 66,920 34,4723,700 Discover Financial Services 92,775 57,1626,000 E*TRADE Financial Corporation 49,889 11,0281,925 Equity Residential Real Estate Investment Trust 78,097 68,294

300 Federated Investors, Inc., Class B 11,783 8,6655,529 Fifth Third Bancorp 212,692 56,2101,703 First Horizon National Corporation 55,202 23,972

949 Franklin Resources, Inc. 82,352 105,0013,149 Genworth Financial Inc. 96,246 37,5373,258 Goldman Sachs Group, Inc., The 455,144 576,8352,678 Hartford Financial Services Group, Inc., The 126,374 65,421

881 Health Care Real Estate Investment Trust Inc. 39,620 40,9994,352 Host Hotels & Resorts Inc. 99,577 53,3402,777 Hudson City Bancorp, Inc. 42,982 39,9285,400 Huntington Bancshares Incorporated 62,411 20,701

500 IntercontinentalExchange Inc. 64,875 58,8982,917 Invesco Ltd. 71,254 71,964

934 Janus Capital Group Inc. 38,739 13,19424,957 JPMorgan Chase & Co. 1,291,518 1,092,222

6,201 KeyCorp 107,632 36,1452,700 Kimco Realty Corporation 64,054 38,3671,200 Legg Mason, Inc. 104,160 37,9481,100 Leucadia National Corporation 42,704 27,4842,098 Lincoln National Corporation 103,664 54,8212,470 Loews Corporation 73,517 94,297

600 M&T Bank Corporation 58,169 42,1513,600 Marsh & McLennan Companies, Inc. 183,640 83,4831,467 Marshall & Ilsley Corporation 67,667 8,397

628 MasterCard Incorporated 147,392 168,4525,203 MetLife, Inc. 249,434 193,1691,012 Moody’s Corporation 12,473 28,4858,304 Morgan Stanley 405,323 257,9771,100 NASDAQ OMX Group, Inc., The 34,354 22,8981,658 Northern Trust Corporation 120,867 91,2451,800 NYSE Euronext 129,476 47,7721,900 People’s United Financial Inc. 41,754 32,6661,170 Plum Creek Timber Company, Inc. 51,019 46,3503,067 PNC Financial Services Group, Inc., The 311,986 170,0442,200 Principal Financial Group, Inc. 73,449 55,5464,695 Progressive Corporation, The 68,230 88,6092,300 ProLogis 81,150 33,0693,087 Prudential Financial, Inc. 151,773 161,296

900 Public Storage Real Estate Investment Trust 75,832 76,9896,588 Regions Financial Corporation 149,319 36,6021,867 Simon Property Group, Inc. 120,585 156,4742,204 SLM Corporation 60,102 26,0872,937 State Street Corporation 190,722 134,3033,419 SunTrust Banks, Inc. 184,571 72,7861,756 T. Rowe Price Group Inc. 58,503 98,206

408 Torchmark Corporation 17,209 18,8333,654 Travelers Companies, Inc., The 209,361 191,306

11,713 U.S. Bancorp 355,238 276,5412,311 Unum Group 93,765 47,3531,100 Ventas, Inc. 36,248 50,5322,900 Visa Inc. 275,048 265,893

967 Vornado Realty Trust Real Estate Investment Trust 83,033 71,03132,309 Wells Fargo & Company 1,449,636 914,146

2,464 XL Capital Ltd. 155,900 47,409422 Zions Bancorporation 37,096 5,660

16,354,069 9,989,466

Information Technology – 18.7%3,364 Adobe Systems Inc. 90,893 129,9462,600 Advanced Micro Devices, Inc. 81,612 26,378


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EQUITIES (cont’d)Information Technology (cont’d)

500 Affiliated Computer Services, Inc. 34,446 31,3452,385 Agilent Technologies, Inc. 176,429 77,8261,300 Akamai Technologies, Inc. 50,374 34,5162,040 Altera Corporation 102,296 48,4851,200 Amphenol Corporation 50,240 58,1251,973 Analog Devices, Inc. 110,033 65,3765,807 Apple Inc. 478,106 1,284,1699,020 Applied Materials, Inc. 254,991 131,3001,648 Autodesk, Inc. 27,348 43,9803,396 Automatic Data Processing, Inc. 194,556 152,7251,062 BMC Software, Inc. 50,324 44,7262,948 Broadcom Corporation 427,222 96,3832,738 CA, Inc. 134,727 64,586

36,460 Cisco Systems, Inc. 1,535,564 916,7171,066 Citrix Systems, Inc. 59,007 46,5852,000 Cognizant Technology Solutions Corporation 80,066 95,1531,012 Computer Sciences Corporation 87,312 61,1461,320 Compuware Corporation 50,456 10,0239,914 Corning Incorporated 397,794 200,956

11,003 Dell Inc. 397,618 165,9432,300 Electronic Arts Inc. 85,622 42,877

13,413 EMC Corporation 542,317 245,8191,574 Google Inc. 767,248 1,024,889

700 Harris Corporation 34,998 34,95815,358 Hewlett-Packard Company 836,634 830,20135,756 Intel Corporation 1,490,649 766,079

8,378 International Business Machines Corporation 1,099,855 1,151,1782,200 Intuit Inc. 76,293 70,9571,391 JDS Uniphase Corporation 1,615,460 12,0523,600 Juniper Networks, Inc. 74,534 100,8371,182 KLA-Tencor Corporation 65,200 44,889

427 Lexmark International, Inc. 47,825 11,6511,208 Linear Technology Corporation 81,205 38,7463,094 LSI Corporation 129,229 19,4641,100 McAfee Inc. 46,118 46,8701,200 MEMC Electronic Materials, Inc. 77,601 17,1531,000 Microchip Technology Incorporated 40,680 30,5205,928 Micron Technology, Inc. 178,885 65,310

49,201 Microsoft Corporation 1,989,516 1,575,52715,405 Motorola, Inc. 447,576 125,389

1,736 National Semiconductor Corporation 35,532 28,0052,308 NetApp, Inc. 104,702 83,3612,553 Novell, Inc. 30,009 11,127

260 Novellus Systems, Inc. 20,085 6,3733,773 NVIDIA Corporation 103,035 74,022

25,228 Oracle Corporation 609,928 650,2082,201 Paychex, Inc. 86,829 70,828

380 QLogic Corporation 32,096 7,50310,464 QUALCOMM Incorporated 546,471 508,391

1,400 Red Hat, Inc. 36,118 45,4341,800 Saic Inc. 36,166 35,767

600 Salesforce.com, Inc. 34,904 46,4551,200 SanDisk Corporation 76,559 36,5365,326 Sun Microsystems, Inc. 462,377 52,3015,539 Symantec Corporation 177,374 104,0732,122 Tellabs, Inc. 159,090 12,6591,236 Teradata Corporation 33,147 40,7481,472 Teradyne, Inc. 119,423 16,5887,991 Texas Instruments Incorporated 424,108 218,4591,272 Total System Services, Inc. 28,961 23,0711,400 VeriSign, Inc. 36,973 35,6411,500 Western Digital Corporation 49,848 69,5534,743 Western Union Company 102,512 93,8494,949 Xerox Corporation 176,976 43,8691,474 Xilinx, Inc. 89,551 38,7957,806 Yahoo! Inc. 534,148 137,567

18,745,781 12,532,938


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Telecommunication Services – 3.1%

2,700 American Tower Corporation 111,125 122,36037,457 AT&T Inc. 2,341,499 1,102,683

2,063 CenturyTel, Inc. 86,465 78,4551,119 Frontier Communications Corporation 26,137 9,1551,220 MetroPCS Communications, Inc. 20,100 9,7648,769 Qwest Communications International Inc. 299,501 38,681

19,708 Sprint Nextel Corporation 815,593 75,75618,412 Verizon Communications Inc. 1,039,216 640,644

3,171 Windstream Corporation 38,498 36,601

4,778,134 2,114,099

Utilities – 3.9%4,614 AES Corporation, The 193,291 64,499

990 Allegheny Energy, Inc. 55,115 24,3821,609 Ameren Corporation 74,736 47,2323,210 American Electric Power 135,634 117,2541,953 CentrePoint Energy, Inc. 56,659 29,7211,163 CMS Energy Corporation 56,129 19,1281,894 Consolidated Edison, Inc. 90,807 90,3691,363 Constellation Energy Group Inc. 58,719 50,2603,986 Dominion Resources, Inc. 152,296 162,9311,115 DTE Energy Company 55,977 51,0458,670 Duke Energy Corporation 184,825 156,7092,213 Edison International 82,493 80,8361,226 Entergy Corporation 67,809 105,3654,348 Exelon Corporation 189,146 223,0742,071 FirstEnergy Corp. 94,888 101,0112,762 FPL Group, Inc. 140,417 153,133

282 Integrys Energy Group, Inc. 17,367 12,433329 Nicor Inc. 18,017 14,547

1,685 NiSource Inc. 56,975 27,2181,300 Northeast Utilities 32,944 35,2121,700 Pepco Holdings, Inc. 35,545 30,0852,503 PG&E Corporation 99,965 117,375

614 Pinnacle West Capital Corporation 27,848 23,5892,586 PPL Corporation 76,351 87,7531,951 Progress Energy, Inc. 101,223 84,0313,158 Public Service Enterprise Group Inc. 90,280 110,2801,200 Questar Corporation 54,242 52,328

603 SCANA Corporation 24,679 23,8631,667 Sempra Energy 74,036 98,0085,282 Southern Company 194,405 184,6744,385 Spectra Energy Corp. 129,226 94,4561,157 TECO Energy, Inc. 48,420 19,710

800 Wisconsin Energy Corporation 41,251 41,8673,140 Xcel Energy, Inc. 89,357 69,979

2,901,072 2,604,357



NET ASSETS – 100.0% 67,087,661




Energy 11.3 13.3Materials 3.5 2.9Industrials 10.4 11.0Consumer Discretionary 10.0 8.3Consumer Staples 11.3 12.8Health Care 12.7 14.8Financials 14.9 13.0Information Technology 18.7 15.1Telecommunication Services 3.1 3.9Utilities 3.9 4.2


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(Level 2) ($)



Equities 66,948,311 – – 66,948,311



A. Risk managementThe investment objective of the Scotia U.S. Index Fund (the “Fund”) is long-term capital growth by tracking the performance of a generally recognized U.S.equity index, currently the Standard & Poor’s 500 Index. It invests primarily inthe stocks that are included in the index.




CurrencyFinancial




U.S. Dollar 67,095,296 – 67,095,296 100.0

Total 67,095,296 – 67,095,296 100.0

December 31, 2008

CurrencyFinancial




U.S. Dollar 45,214,055 – 45,214,055 99.5

Total 45,214,055 – 45,214,055 99.5



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments such asbonds. The Fund is exposed to the risk that the value of interest-bearingfinancial instruments will fluctuate due to changes in the prevailing levels ofmarket interest rates. As at December 31, 2009 and December 31, 2008, themajority of the Fund’s financial assets and liabilities are non-interest bearing,accordingly, the Fund is not subject to material amounts of risk due tofluctuations in the prevailing levels of interest rates.






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Scotia CanAm Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $66,130,207 $62,739,547Cash 799,553 2,467,986Subscriptions receivable 3,586 8,879Receivable for futures contracts – 261,769

66,933,346 65,478,181

LIABILITIESRedemptions payable 66,729 11,642Accrued expenses 29,188 57,796Payable for futures contracts 686,200 –

782,117 69,438

Net Assets $66,151,229 $65,408,743





2009 2008INVESTMENT INCOMEInterest $ 332,746 $ 2,069,052Futures contracts 13,495,237 (40,028,809)

13,827,983 (37,959,757)

EXPENSESManagement fees (note 4) 502,718 653,851Audit fees 19,155 17,495Independent Review Committee fees 1,182 1,237Custodian fees 1,092 3,461Filing fees 17,500 16,857Legal fees 8,648 7,650Unitholder reporting costs 35,667 38,817Unitholder administration, service fees and GST 297,685 339,122


618,981 798,112

Net investment income (loss) 13,209,002 (38,757,869)

Net realized gain (loss) on foreign exchange (3,654,621) 11,260,063Transaction costs (11,777) (12,077)Change in unrealized appreciation (depreciation) of investments (4,078,499) 4,677,971



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 5,463,390 $(22,829,454)Class F Units $ 715 $ (2,458)




65,408,743 99,396,824

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 5,463,390 (22,829,454)Class F Units 715 (2,458)

5,464,105 (22,831,912)



Class A Units (6,717,351) (13,255,083)

(4,721,619) (11,156,169)

INCREASE (DECREASE) IN NET ASSETSClass A Units 741,771 (33,985,623)Class F Units 715 (2,458)

742,486 (33,988,081)


$66,151,229 $ 65,408,743


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AverageCost ($)

FairValue ($)

TREASURY BILLS – 100.0%57,400,000 Governement of Canada

(U.S.) 0.04% to 0.35% due fromJan. 11, 2010 to Jul. 9, 2010 60,055,864 60,256,542

5,600,000 United States Treasury(U.S.) 0.35% due May. 17, 2010 6,089,941 5,873,665


Futures Contracts – (1.1%) (686,200)OTHER ASSETS, LESS LIABILITIES – 1.1% 707,222

NET ASSETS – 100.0% 66,151,229

Note: As at December 31, 2009, the Scotia CanAm Index Fund held 226 futures contracts topurchase the Standard and Poor’s 500 Stock Index (“S&P 500 Index”) and held 4 futurescontracts to purchase the S&P 500 Index E-Mini futures contracts for settlement in March2010. These futures contracts are financial agreements to purchase the S&P 500 Index at acontracted price on a specific future date. However, the Fund does not intend to purchase theS&P 500 Index on settlement. Rather, it intends to close out each futures contract beforesettlement by entering into equal, but offsetting futures contracts.

Number of Futures Contracts Contract IssuerContractual Value



(Depreciation) ($)

S&P 500 Composite Stock Index226 Futures Contracts – Mar. 2010 65,588,510 65,908,260 319,750

4 E-Mini Futures Contracts – Mar. 2010 229,428 233,304 3,876

TOTAL 323,626

With respect to the above futures contracts, $7,000,000 of the July 9, 2010 Government of Canada Treasury Bills are held on margin.





Treasury Bills 100.0 18.5Commercial Paper – 77.4Futures Contracts (1.1) 0.4




(Level 2) ($)



Bonds and Debentures – 66,130,207 – 66,130,207Futures Contracts (Long) 323,626 – 323,626




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Scotia CanAm Index Fund (Continued)


A. Risk managementThe investment objective of the Scotia CanAm Index Fund (the “Fund”) islong-term capital growth by tracking the performance of a generally recognizedU.S. equity index. The Fund currently tracks the Standard & Poor’s 500 Index(“S&P 500 Index”). It invests primarily in the futures contracts that are linkedto the performance of the index and in cash, Government of Canada treasurybills and other short-term debt instruments guaranteed by the Government ofCanada.




CurrencyFinancial




U.S. Dollar 66,228,940 – 66,228,940 100.1

Total 66,228,940 – 66,228,940 100.1

December 31, 2008

CurrencyFinancial




U.S. Dollar 65,456,740 – 65,456,740 100.1

Total 65,456,740 – 65,456,740 100.1



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments. The Fund isexposed to the risk that the value of interest-bearing financial instruments willfluctuate due to changes in the prevailing levels of market interest rates. TheFund has minimal sensitivity to changes in interest rates due to the short-termnature of instruments held.






Total 66,130,207 62,739,547

* Excludes cash and preferred shares as applicable


The Fund enters into securities lending transactions with counterpartieswhereby the Fund temporarily exchanges securities for collateral with acommitment by the counterparty to deliver the same securities on a futuredate. Credit risk associated with these transactions is considered minimal as allcounterparties have a sufficient, approved credit rating and the market value ofcash or securities held as collateral must be at least 102% of the fair value ofthe securities loaned as at the end of each trading day. Credit risk may alsoexist in relation to counterparties of futures contracts.

Debt instruments, excluding cash but including preferred shares, held by theFund have credit rating as follows:



Net Assets (%)



Net Assets (%)


R1-High 100.0 100.0 100.0 95.9

Total 100.0 100.0 100.0 95.9



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Scotia CanAm Index Fund (Continued)

Scotia Nasdaq Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $10,286,603 $7,401,409Cash 492,235 280,420Subscriptions receivable 2,926 2,080

10,781,764 7,683,909

LIABILITIESRedemptions payable 3,737 4,690Accrued expenses 4,878 6,987Payable for futures contracts 103,429 37,982

112,044 49,659

Net Assets $10,669,720 $7,634,250

NET ASSETS PER CLASSClass A Units $10,669,720 $7,631,877Class F Units $ – $ 2,373

UNITS OUTSTANDINGClass A Units 2,434,471 2,325,879Class F Units – 694

NET ASSETS PER UNITClass A Units $ 4.38 $ 3.28Class F Units $ – $ 3.42


2009 2008INVESTMENT INCOMEInterest $ 46,453 $ 230,953Futures contracts 3,987,392 (5,228,902)

4,033,845 (4,997,949)

EXPENSESManagement fees (note 4) 74,332 77,158Audit fees 13,553 11,496Independent Review Committee fees 123 120Custodian fees 517 748Filing fees 15,270 15,025Legal fees 5,083 4,194Unitholder reporting costs 10,549 11,106Unitholder administration, service fees and GST 66,632 69,341


95,637 97,222


Net realized gain (loss) on foreign exchange (784,783) 1,212,098Transaction costs (3,935) (3,288)Change in unrealized appreciation (depreciation) of investments (420,388) 585,433



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 2,729,014 $(3,299,459)Class F Units $ 88 $ (1,469)



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 7,631,877 $11,336,389Class F Units 2,373 3,842

7,634,250 11,340,231

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 2,729,014 (3,299,459)Class F Units 88 (1,469)

2,729,102 (3,300,928)


Class A Units 2,237,375 2,167,902Class F Units – 1,500

Payments on redemptionClass A Units (1,928,546) (2,572,955)Class F Units (2,461) (1,500)

306,368 (405,053)

INCREASE (DECREASE) IN NET ASSETSClass A Units 3,037,843 (3,704,512)Class F Units (2,373) (1,469)

3,035,470 (3,705,981)

NET ASSETS – END OF PERIODClass A Units 10,669,720 7,631,877Class F Units – 2,373

$10,669,720 $ 7,634,250


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AverageCost ($)

FairValue ($)

TREASURY BILLS – 96.4%8,700,000 Governement of Canada

(U.S.) 0.03% to 0.35% due fromJan. 11, 2010 to Jul. 9, 2010 9,128,906 9,132,847

1,100,000 United States Treasury(U.S.) 0.35% due May. 17, 2010 1,196,238 1,153,756


Futures Contracts – (1.0%) (103,429)OTHER ASSETS, LESS LIABILITIES – 4.6% 486,546

NET ASSETS – 100.0% 10,669,720

Note: As at December 31, 2009, the Scotia Nasdaq Index Fund held 54 futures contracts topurchase the Nasdaq 100 Index and held 3 futures contracts to purchase the Nasdaq 100Index E-Mini futures contracts for settlement in March 2010. These futures contracts arefinancial agreements to purchase the Nasdaq 100 Index at a contracted price on a specificfuture date. However, the Fund does not intend to purchase the Nasdaq 100 Index onsettlement. Rather, it intends to close out each futures contract before settlement by enteringinto equal, but offsetting futures contracts.

Number of Futures Contracts Contract IssuerContractual Value



(Depreciation) ($)

Nasdaq 100 Index54 Futures Contracts – Mar. 2010 10,199,240 10,541,669 342,4293 E-Mini Futures Contracts – Mar. 2010 114,839 117,130 2,291

TOTAL 344,720

With respect to the above futures contracts, $1,300,000 of the July 9, 2010 Government of Canada Treasury Bills are held on margin.





Treasury Bills 96.4 23.8Commercial Paper – 73.2Futures Contracts (1.0) (0.5)




(Level 2) ($)



Money Market Instruments – 10,286,603 – 10,286,603Futures Contracts (Long) 344,720 – – 344,720




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Scotia Nasdaq Index Fund (Continued)


A. Risk managementThe investment objective of the Scotia Nasdaq Index Fund (the “Fund”) isaggressive long-term capital growth by tracking the performance of the Nasdaq100 Index. It invests primarily in derivatives that are linked to the performanceof the Nasdaq 100 Index, and in cash and money market instruments.




CurrencyFinancial




U.S. Dollar 10,667,640 – 10,667,640 100.0

Total 10,667,640 – 10,667,640 100.0

December 31, 2008

CurrencyFinancial




U.S. Dollar 7,490,646 – 7,490,646 98.1

Total 7,490,646 – 7,490,646 98.1


As at December 31, 2009, if the Canadian dollar had strengthened or weakenedby 10% in relation to all currencies, with all other variables held constant, theFund’s Net Assets would have decreased or increased, respectively byapproximately $1,066,764, 10.0% of the Fund’s Net Assets (December 31, 2008-$749,065, 9.8% of the Fund’s Net Assets). In practice, actual results may differfrom this sensitivity analysis and the difference could be material.

D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments. The Fund isexposed to the risk that the value of interest-bearing financial instruments willfluctuate due to changes in the prevailing levels of market interest rates. The

Fund has minimal sensitivity to changes in interest rates due to the short-termnature of instruments held.

The table below summarizes the Fund’s exposure to interest rate risk byremaining terms to maturity of the Fund’s portfolio of debt instruments.





Total 10,286,603 7,401,409












R1- High 100.0 96.4 100.0 97.0

Total 100.0 96.4 100.0 97.0

F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Nasdaq 100 Index, as of December 31,2009, with all other variables held constant, would result in an increase ordecrease of approximately $2,112,605, 19.8% of the Fund’s Net Assets(December 31, 2008-$774,817, 10.1% of the Fund’s Net Assets). The Fund’shistorical sensitivity measure may not be representative of its future sensitivitymeasure, and accordingly, the impact on Net Assets could be materiallydifferent.


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Scotia Nasdaq Index Fund (Continued)

Scotia International Index FundS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at fair value $69,033,633 $40,213,919Cash 131,389 244,242Accrued investment income 3,707 –Subscriptions receivable 17,722 16,040Receivable for futures contracts 3,286,005 3,283,377

72,472,456 43,757,578

LIABILITIESRedemptions payable 21,480 11,763Accrued expenses 16,500 27,382Payable for currency futures contracts 427,851 552,505

465,831 591,650

Net Assets $72,006,625 $43,165,928

NET ASSETS PER CLASSClass A Units $26,206,149 $23,879,350Class F Units $ 6,527 $ 5,874Class I Units $45,793,949 $19,280,704

UNITS OUTSTANDINGClass A Units 3,825,634 3,860,393Class F Units 951 951Class I Units 6,360,627 2,985,945



2009 2008INVESTMENT INCOMEInterest $ 180,579 $ 1,467,118Futures contracts 11,089,824 (25,410,328)Securities lending 3,311 2,087

11,273,714 (23,941,123)



316,718 361,933


Net realized gain (loss) on investments sold – (6,376)Net realized gain (loss) on futures contracts (1,718,687) 7,125,595Net realized gain (loss) on foreign exchange 76,368 (785,531)Transaction costs (64,077) (55,574)Change in unrealized appreciation (depreciation) of investments (689) –Change in unrealized appreciation (depreciation) of futures contracts 96,118 –Change in unrealized appreciation (depreciation) of currency futures (3,371,109) 1,913,510



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 2,586,139 $ (9,635,683)Class F Units $ 653 $ (2,301)Class I Units $ 3,388,128 $ (6,473,448)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.67 $ (2.46)Class F Units $ 0.69 $ (2.41)Class I Units $ 0.78 $ (2.33)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $23,879,350 $ 34,427,707Class F Units 5,874 8,207Class I Units 19,280,704 18,257,587

43,165,928 52,693,501

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 2,586,139 (9,635,683)Class F Units 653 (2,301)Class I Units 3,388,128 (6,473,448)

5,974,920 (16,111,432)



Payments on redemptionClass A Units (3,148,068) (4,550,528)Class F Units – (32)Class I Units (4,585,164) (2,434,320)

22,865,777 6,583,859

INCREASE (DECREASE) IN NET ASSETSClass A Units 2,326,799 (10,548,357)Class F Units 653 (2,333)Class I Units 26,513,245 1,023,117

28,840,697 (9,527,573)


$72,006,625 $ 43,165,928


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Scotia International Index Fund (Continued)



AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 95.9%Treasury Bills - 36.2%

26,050,000 Government of Canada0.18% to 0.36% due fromFeb. 4, 2010 to Apr. 1, 2010 26,032,793 26,039,853

Bankers’ Acceptances – 28.0%3,400,000 HSBC Bank Canada

0.28% due Jan. 25, 2010 3,399,286 3,399,3653,200,000 National Bank of Canada

0.27% due fromJan. 6, 2010 to Jan. 22, 2010 3,199,454 3,199,616



20,196,428 20,197,407

Bearers’ Deposit Notes – 3.5%2,500,000 Bank of Montreal

0.27% due Jan. 19, 2010 2,499,350 2,499,666

Commercial Paper – 24.0%3,400,000 Merit Trust

0.38% due fromJan. 5, 2010 to Jan. 19, 2010 3,398,798 3,399,658


AverageCost ($)

FairValue ($)


3,200,000 Okanagan Funding Trust0.57% due Jan. 8, 2010 3,198,592 3,199,648

2,000,000 Plaza Trust0.38% due Jan. 15, 2010 1,999,360 1,999,711

3,500,000 PURE Trust0.38% due Jan. 15, 2010 3,498,635 3,499,484

2,200,000 Ridge Trust0.38% due Jan. 12, 2010 2,199,340 2,199,750

3,000,000 Storm King Funding0.38% due Jan. 15, 2010 2,999,040 2,999,566

17,293,765 17,297,817

Short-Term Bonds – 4.2%3,000,000 Royal Bank of Scotland

0.62% due Jan. 19, 2010 2,999,580 2,998,890


Futures Contracts – 4.0% 2,858,154OTHER ASSETS, LESS LIABILITIES – 0.1% 114,838

NET ASSETS – 100.0% 72,006,625

I N D E X F U T U R E S C O N T R A C T S

Number of Contracts Issuer/Country Index Settlement DateContractual Value



(Depreciation) ($)EUROPE

250 DJ EURO STOXX 50 Mar. 2010 10,848,609 11,159,640 311,031FRANCE

60 CAC 40 Index Mar. 2010 3,453,602 3,553,795 100,193GERMANY

12 DAX Index Mar. 2010 2,625,090 2,693,198 68,108ITALY

12 S&P/MIB Index Mar. 2010 2,043,691 2,103,229 59,538NETHERLANDS

19 Amsterdam Index Jan. 2010 1,845,757 1,913,655 67,898SPAIN

14 IBEX 35 Plus Index Jan. 2010 2,447,769 2,508,810 61,041SWEDEN

167 OMX Index Jan. 2010 2,350,848 2,331,126 (19,722)SWITZERLAND

80 Swiss Market Index Mar. 2010 5,156,396 5,265,934 109,538UNITED KINGDOM

191 FTSE 100 Index Mar. 2010 17,115,951 17,377,927 261,976AUSTRALIA

50 SPI 200 Mar. 2010 5,489,489 5,751,979 262,490HONG KONG

10 Hang Seng Index Jan. 2010 1,445,077 1,484,886 39,809JAPAN

153 Topix Index Mar. 2010 15,462,571 15,613,119 150,548

1,472,448

C U R R E N C Y F U T U R E S C O N T R A C T S

Number of Contracts Settlement DateContractual Value



(Depreciation) ($)

65 Australian $ against U.S.$ Mar. 2010 6,099,018 6,087,329 (11,689)143 British Pound against U.S.$ Mar. 2010 15,252,370 15,155,687 (96,683)105 Japanese Yen against U.S.$ Mar. 2010 15,609,659 14,804,653 (805,006)42 Swiss Franc against U.S.$ Mar. 2010 5,364,964 5,331,329 (33,635)

143 Euro against U.S.$ Mar. 2010 27,554,515 26,909,652 (644,863)(693) Canadian $ against U.S.$ Mar. 2010 (68,209,891) (69,594,770) (1,384,879)

TOTAL (2,976,755)

The above index futures and currency futures contracts are financial agreements to purchase the indexes and foreign currencies at a contracted price on a specific future date. However, the Funddoes not intend to purchase the indexes and foreign currencies on settlement. Rather, it intends to close out each index futures contract and currency futures contract before settlement byentering into equal, but offsetting futures contracts and currency future contracts.

With respect to the above futures contracts, $6,950,000 of the February 4, 2010 Government of Canada Treasury Bills is held on margin.

The futures contracts outstanding at December 31, 2009 are placed with a financial institution with a minimum credit rating of AA- by Standard & Poor’s.


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Treasury Bills 36.2 93.2Bankers’ Acceptances 28.0 –Bearers’ Deposit Notes 3.5 –Commercial Paper 24.0 –Short-Term Bonds 4.2 –Futures Contracts 4.0 6.3




(Level 2) ($)



Money Market Instruments – 69,033,633 – 69,033,633Futures Contracts (Long) (119,428) – – (119,428)

Total Investments (119,428) 69,033,633 – 68,914,205



(Level 2) ($)



Futures Contracts (Short) 1,384,879 – – 1,384,879




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A. Risk managementThe investment objective of the Scotia International Index Fund (the “Fund”) islong-term capital growth by tracking the performance of generally recognizedindices of established international stock markets. It invests primarily in futurescontracts that are linked to the performance of the indices, and in cash andmoney market instruments.




CurrencyFinancial

Instruments ($)

Contractual MarketValue of Currency

Futures Contracts ($)Net CurrencyExposure ($)


Swedish Krona 2,331,126 – 2,331,126 3.2British Pound 17,377,927 (15,155,687) 2,222,240 3.1Hong Kong Dollar 1,484,886 – 1,484,886 2.1Japanese Yen 15,613,119 (14,804,653) 808,466 1.1Swiss Franc 5,265,934 (5,331,329) (65,395) (0.1)Australian Dollar 5,751,979 (6,087,329) (335,350) (0.5)U.S. Dollar (427,851) (1,306,120) (1,733,971) (2.4)European Euro 23,932,327 (26,909,652) (2,977,325) (4.1)

Total 71,329,447 (69,594,770) 1,734,677 2.4

December 31, 2008

CurrencyFinancial

Instruments ($)

Contractual MarketValue of Currency

Futures Contracts ($)Net CurrencyExposure ($)


Swedish Krona 1,444,407 – 1,444,407 3.4British Pound 9,579,425 (8,192,220) 1,387,205 3.2Australian Dollar 3,643,221 (2,554,178) 1,089,043 2.5Hong Kong

Dollar 904,648 – 904,648 2.1Swiss Franc 3,232,469 (3,703,077) (470,608) (1.1)U.S. Dollar – (1,001,326) (1,001,326) (2.3)Japanese Yen 9,710,261 (10,736,040) (1,025,779) (2.4)European Euro 14,455,080 (15,642,149) (1,187,069) (2.8)

Total 42,969,511 (41,828,990) 1,140,521 2.6



D. Interest rate riskInterest rate risk arises from interest-bearing financial instruments. The Fund isexposed to the risk that the value of interest-bearing financial instruments willfluctuate due to changes in the prevailing levels of market interest rates. TheFund has minimal sensitivity of changes in interest rates due to the short-termnature of instruments held.






Total 69,033,633 40,213,919












Short-Term RatingR1-High 76.1 73.0 100.0 93.2R1-Middle 9.6 9.1 – –R3-High 5.1 4.9 – –Unrated 4.9 4.7 – –Bond Credit RatingAA 4.3 4.2 – –

Total 100.0 95.9 100.0 93.2

F. Other price riskOther price risk is the risk that the fair value of the Fund’s financial instrumentswill fluctuate as a result of changes in market prices (other than those arisingfrom interest rate or currency risk). The impact on the Net Assets of the Funddue to a 20% change in the respective stock index (December 31, 2008 – 10%),using a historical measure of the sensitivity of the Fund’s return relative to thereturn of its benchmark stock index, Morgan Stanley Capital InternationalEurope, Australasia and the Far East Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $13,681,152, 19.0% of the Fund’s Net Assets (December 31,2008-$4,082,104, 9.5% of the Fund’s Net Assets). The Fund’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.


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Scotia Selected Income & Modest Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at market value $281,509,177 $236,871,584Cash 2,808,304 3,381,685Subscriptions receivable 513,934 121,481

284,831,415 240,374,750

LIABILITIESDistributions payable 4,698 4,528Redemptions payable 103,297 181,604Accrued expenses – 377,761

107,995 563,893

Net Assets $284,723,420 $239,810,857

NET ASSETS PER CLASSClass A Units $284,711,318 $239,800,135Advisor Class Units $ 12,102 $ 10,722

UNITS OUTSTANDINGClass A Units 26,319,561 24,281,346Advisor Class Units 1,129 1,112

NET ASSETS PER UNITClass A Units $ 10.82 $ 9.88Advisor Class Units $ 10.72 $ 9.64


2009 2008INVESTMENT INCOMEDividends $ 1,314,666 $ 1,250,823Interest 8,325,133 9,185,464Foreign withholding taxes/Tax reclaims (94,079) (62,726)

9,545,720 10,373,561

EXPENSESManagement fees (note 4) 4,124,787 4,134,031Audit fees 19,102 15,491Independent Review Committee fees 587 544Custodian fees 909 –Filing fees 37,280 23,060Legal fees 8,954 8,625Unitholder reporting costs 21,777 22,894Unitholder administration, service fees and GST 328,585 324,083


4,522,284 4,513,665


Net realized gain (loss) on investments sold (6,521,138) (2,934,841)Change in unrealized appreciation (depreciation) of investments 29,735,431 (29,308,698)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $28,236,349 $(26,382,860)Advisor Class Units $ 1,380 $ (783)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 1.14 $ (1.11)Advisor Class Units $ 1.24 $ (2.52)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $239,800,135 $250,646,043Advisor Class Units 10,722 –

239,810,857 250,646,043

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 28,236,349 (26,382,860)Advisor Class Units 1,380 (783)

28,237,729 (26,383,643)


Class A Units (5,023,257) (5,859,480)Advisor Class Units (178) (416)

(5,023,435) (5,859,896)


Class A Units 50,389,228 61,583,884Advisor Class Units – 11,505

Reinvested distributionsClass A Units 5,019,397 5,854,013Advisor Class Units 178 416

Payments on redemptionClass A Units (33,710,534) (46,041,465)

21,698,269 21,408,353

INCREASE (DECREASE) IN NET ASSETSClass A Units 44,911,183 (10,845,908)Advisor Class Units 1,380 10,722

44,912,563 (10,835,186)

NET ASSETS – END OF PERIODClass A Units 284,711,318 239,800,135Advisor Class Units 12,102 10,722

$284,723,420 $239,810,857



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Numberof Units Issuer

AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 71.1%9,818,525 Scotia Bond Fund Class I 98,432,217 98,486,6804,411,381 Scotia Canadian Income Fund Class I 56,836,296 56,429,940

460,928 Scotia Global Bond Fund Class I 4,016,799 3,841,3713,996,143 Scotia Mortgage Income Fund Class I 43,211,252 43,605,918

202,496,564 202,363,909

CANADIAN EQUITY FUNDS – 14.0%794,504 Scotia Canadian Dividend Fund Class I 26,670,956 28,427,678123,170 Scotia Canadian Growth Fund Class I 6,887,616 7,164,020202,805 Scotia Resource Fund Class I 3,686,334 4,319,876

37,244,906 39,911,574

FOREIGN EQUITY FUNDS – 13.8%375,390 Scotia Global Climate Change Fund Class I 2,791,202 2,784,981804,040 Scotia Global Growth Fund Class I 24,906,651 22,601,795473,428 Scotia Global Small Cap Fund Class I 3,895,850 2,796,824910,368 Scotia International Value Fund Class I 6,689,385 5,454,744825,078 Scotia U.S. Value Fund Class I 6,480,702 5,595,350

44,763,790 39,233,694



NET ASSETS – 100.0% 284,723,420




Fixed Income Funds 71.1 68.3Canadian Equity Funds 14.0 14.6Foreign Equity Funds 13.8 15.9




(Level 2) ($)



Mutual Funds 281,509,177 – – 281,509,177



A. Risk managementThe investment objective of the Scotia Selected Income & Modest GrowthPortfolio (the “Portfolio”) is to achieve a balance of current income and long-term capital appreciation, with a bias towards income. It invests primarily in adiversified mix of equity and income mutual funds. As a result, the Portfolio isnot directly exposed to significant currency, interest rate or credit risks.

Managing risk is among the most important factors in the portfolio managementprocess, guiding investment decisions made for the Portfolio. The Portfolio’sinvestment practice includes portfolio monitoring to ensure compliance withstated investment guidelines.

B. Liquidity riskThe Portfolio’s exposure to liquidity risk arises primarily from the daily cashredemption of units. The underlying funds primarily invest in securities that aretraded in active markets and can be readily disposed. In addition, the Portfolioaims to retain sufficient cash and cash equivalent positions to maintain liquidity,and has the ability to borrow up to 5% of its Net Asset Value for the purpose offunding redemptions.

C. Currency riskCurrency risk is the risk that financial instruments which are denominated in acurrency other than Canadian dollars, which is the Portfolio’s reportingcurrency, will fluctuate due to changes in exchange rates. The Portfolio may beexposed to indirect currency risk in the event that the underlying funds investin financial instruments that are denominated in a currency other thanCanadian dollars.

D. Interest rate riskInterest rate risk arises from the possibility that changes in interest rates willaffect future cash flows or fair values of financial instruments. Interest rate riskarises on interest-bearing financial instruments held by the Portfolio. ThePortfolio may be exposed to indirect interest rate risk in the event that theunderlying funds invest in interest-bearing financial instruments.

E. Credit riskCredit risk is the risk that the counterparty of a financial interest will fail todischarge an obligation or commitment that it has entered into with thePortfolio. All transactions in listed securities are settled (paid for) upon deliveryusing approved brokers. The risk of default is considered minimal, as delivery ofsecurities sold is only made once the broker has received payment. Payment isonly made on a purchase once the securities have been received by the broker.

The Portfolio may be exposed to indirect credit risk in the event that theunderlying funds invest in debt instruments and derivatives.

F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 15%S&P/TSX Composite Index, 70% DEX Universe Bond Index, and 15% MorganStanley Capital International World Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $59,222,471, 20.8% of the Portfolio’s Net Assets (December 31,2008-$25,180,140, 10.5% of the Portfolio’s Net Assets). The Portfolio’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.



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Scotia Selected Balanced Income & Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at market value $878,660,393 $703,533,000Cash 8,991,174 7,888,877Subscriptions receivable 1,170,409 398,574

888,821,976 711,820,451

LIABILITIESDistributions payable 4,254 11,704Redemptions payable 449,325 336,162Accrued expenses – 1,172,839

453,579 1,520,705

Net Assets $888,368,397 $710,299,746

NET ASSETS PER CLASSClass A Units $888,251,472 $710,215,719Advisor Class Units $ 69,477 $ 44,224Class F Units $ 47,448 $ 39,803


NET ASSETS PER UNITClass A Units $ 11.44 $ 9.91Advisor Class Units $ 11.22 $ 9.58Class F Units $ 11.30 $ 9.65



22,850,705 25,536,709

EXPENSESManagement fees (note 4) 13,745,564 13,798,159Audit fees 21,589 17,606Independent Review Committee fees 1,711 1,545Custodian fees 1,317 –Filing fees 62,115 50,740Legal fees 12,840 11,751Unitholder reporting costs 48,821 47,510Unitholder administration, service fees and GST 968,149 950,850


14,840,186 14,827,547





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $122,138,342 $(164,768,923)Advisor Class Units $ 9,385 $ (6,348)Class F Units $ 7,645 $ (11,271)


Class A Units $ 1.65 $ (2.42)Advisor Class Units $ 1.76 $ (4.79)Class F Units $ 1.85 $ (2.82)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $710,215,719 $ 747,225,190Advisor Class Units 44,224 –Class F Units 39,803 –

710,299,746 747,225,190


122,155,372 (164,786,542)


Class A Units (8,009,085) (10,706,539)Advisor Class Units (594) (1,368)Class F Units (840) (1,254)

(8,010,519) (10,709,161)


Class A Units 129,683,059 227,977,832Advisor Class Units 15,868 50,572Class F Units – 51,074

Reinvested distributionsClass A Units 8,004,867 10,694,639Advisor Class Units 594 1,368Class F Units 840 1,254


63,923,798 138,570,259

INCREASE (DECREASE) IN NET ASSETSClass A Units 178,035,753 (37,009,471)Advisor Class Units 25,253 44,224Class F Units 7,645 39,803

178,068,651 (36,925,444)

NET ASSETS – END OF PERIODClass A Units 888,251,472 710,215,719Advisor Class Units 69,477 44,224Class F Units 47,448 39,803

$888,368,397 $ 710,299,746


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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 49.2%21,036,722 Scotia Bond Fund Class I 210,920,927 211,013,0458,968,048 Scotia Canadian Income Fund Class I 114,992,494 114,718,3752,400,684 Scotia Global Bond Fund Class I 20,919,009 20,007,3018,386,740 Scotia Mortgage Income Fund Class I 90,632,029 91,516,105

437,464,459 437,254,826

CANADIAN EQUITY FUNDS – 25.1%4,378,725 Scotia Canadian Dividend Fund Class I 151,018,756 156,672,546

760,593 Scotia Canadian Growth Fund Class I 45,312,797 44,238,7511,034,030 Scotia Resource Fund Class I 18,784,529 22,025,452

215,116,082 222,936,749

FOREIGN EQUITY FUNDS – 24.6%1,756,858 Scotia Global Climate Change Fund Class I 13,067,827 13,033,9552,502,984 Scotia Global Growth Fund Class I 80,290,080 70,359,6273,561,198 Scotia Global Opportunities Fund Class I 30,353,286 26,487,1222,215,325 Scotia Global Small Cap Fund Class I 18,522,195 13,087,2541,181,287 Scotia International Index Fund Class I 8,438,317 8,506,4473,546,005 Scotia International Value Fund Class I 27,057,621 21,246,952

588,538 Scotia Latin American Fund Class I 15,001,850 17,800,0951,090,082 Scotia Pacific Rim Fund Class I 12,687,454 13,057,435

812,617 Scotia U.S. Index Fund Class I 8,345,805 8,705,6483,861,077 Scotia U.S. Value Fund Class I 30,664,448 26,184,283

244,428,883 218,468,818



NET ASSETS – 100.0% 888,368,397








(Level 2) ($)



Mutual Funds 878,660,393 – – 878,660,393



A. Risk managementThe investment objective of the Scotia Selected Balanced Income & GrowthPortfolio (the “Portfolio”) is to achieve a balance of current income and long-term capital appreciation, with a small bias towards capital appreciation. Itinvests primarily in a diversified mix of equity and income mutual funds. As aresult, the Portfolio is not directly exposed to significant currency, interest rateor credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of , 29%S&P/TSX Composite Index, 45% DEX Universe Bond Index, and 26% MorganStanley Capital International World Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $188,334,100, 21.2% of the Portfolio’s Net Assets (December 31,2008-$74,581,473, 10.5% of the Portfolio’s Net Assets). The Portfolio’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.

S C O T I A F U N D S A N N U A L R E P O R T T O U N I T H O L D E R S – 2 0 0 9S

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Scotia Selected Balanced Income & Growth Portfolio (Continued)

Scotia Selected Moderate Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31


562,155,209 447,479,140

LIABILITIESDistributions payable 292 3,302Redemptions payable 123,149 299,241Accrued expenses – 793,050

123,441 1,095,593

Net Assets $562,031,768 $446,383,547

NET ASSETS PER CLASSClass A Units $562,031,669 $446,383,471Advisor Class Units $ 99 $ 76

UNITS OUTSTANDINGClass A Units 46,833,390 44,647,263Advisor Class Units 8 8




11,696,557 13,077,183

EXPENSESManagement fees (note 4) 9,436,725 9,870,829Audit fees 17,583 18,380Independent Review Committee fees 1,131 1,020Custodian fees 1,368 –Filing fees 51,367 41,077Legal fees 10,799 10,117Unitholder reporting costs 34,727 34,592Unitholder administration, service fees and GST 665,802 675,363


10,198,431 10,598,436





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 93,399,173 $(154,998,280)Advisor Class Units $ 15 $ (24)



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $446,383,471 $ 491,338,152Advisor Class Units 76 –

446,383,547 491,338,152

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 93,399,173 (154,998,280)Advisor Class Units 15 (24)

93,399,188 (154,998,304)


Class A Units (229,396) (1,955,799)


Class A Units 71,085,142 168,070,043Advisor Class Units 8 100

Reinvested distributionsClass A Units 228,966 1,952,010


22,478,429 111,999,498

INCREASE (DECREASE) IN NET ASSETSClass A Units 115,648,198 (44,954,681)Advisor Class Units 23 76

115,648,221 (44,954,605)

NET ASSETS – END OF PERIODClass A Units 562,031,669 446,383,471Advisor Class Units 99 76

$562,031,768 $ 446,383,547


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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 29.3%7,151,714 Scotia Bond Fund Class I 71,761,256 71,736,7003,214,835 Scotia Canadian Income Fund Class I 41,016,801 41,123,8512,229,685 Scotia Global Bond Fund Class I 19,428,689 18,582,1973,033,216 Scotia Mortgage Income Fund Class I 33,166,312 33,098,449

165,373,058 164,541,197

CANADIAN EQUITY FUNDS – 35.2%3,868,409 Scotia Canadian Dividend Fund Class I 137,560,905 138,413,224

677,346 Scotia Canadian Growth Fund Class I 42,901,579 39,396,788929,321 Scotia Resource Fund Class I 16,869,808 19,795,087

197,332,292 197,605,099

FOREIGN EQUITY FUNDS – 34.6%1,482,995 Scotia Global Climate Change Fund Class I 11,034,410 11,002,1902,295,219 Scotia Global Growth Fund Class I 74,907,050 64,519,2962,997,572 Scotia Global Opportunities Fund Class I 25,225,575 22,295,0381,870,079 Scotia Global Small Cap Fund Class I 15,934,683 11,047,6751,485,679 Scotia International Index Fund Class I 10,612,856 10,698,3743,715,115 Scotia International Value Fund Class I 28,787,722 22,260,226

473,294 Scotia Latin American Fund Class I 12,161,384 14,314,594920,027 Scotia Pacific Rim Fund Class I 10,708,677 11,020,453512,816 Scotia U.S. Index Fund Class I 5,267,460 5,493,852

3,243,959 Scotia U.S. Value Fund Class I 26,008,639 21,999,229

220,648,456 194,650,927



NET ASSETS – 100.0% 562,031,768








(Level 2) ($)



Mutual Funds 556,797,223 – – 556,797,223



A. Risk managementThe investment objective of the Scotia Selected Moderate Growth Portfolio (the“Portfolio”) is to achieve a balance of current income and long-term capitalappreciation, with a bias towards capital appreciation. It invests primarily in adiversified mix of equity and income mutual funds. As a result, the Portfolio isnot directly exposed to significant currency, interest rate or credit risks.









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Scotia Selected Moderate Growth Portfolio (Continued)

Scotia Selected Aggressive Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31

2009 2008ASSETSInvestments at market value $113,294,882 $87,417,771Cash 975,855 1,083,059Subscriptions receivable 173,537 38,136

114,444,274 88,538,966

LIABILITIESRedemptions payable 142,954 16,547Accrued expenses – 177,223

142,954 193,770

Net Assets $114,301,320 $88,345,196

NET ASSETS PER CLASSClass A Units $114,287,071 $88,345,125Advisor Class Units $ 14,249 $ 71

UNITS OUTSTANDINGClass A Units 9,455,312 8,963,506Advisor Class Units 1,180 7




1,892,582 2,082,878

EXPENSESManagement fees (note 4) 2,090,463 2,287,310Audit fees 13,354 16,482Independent Review Committee fees 257 232Custodian fees 1,257 –Filing fees 33,053 19,324Legal fees 7,795 7,656Unitholder reporting costs 13,772 15,199Unitholder administration, service fees and GST 171,699 179,318


2,312,072 2,507,272





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 21,005,182 $(39,309,755)Advisor Class Units $ 3,075 $ (29)



2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $ 88,345,125 $106,334,307Advisor Class Units 71 –

88,345,196 106,334,307

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 21,005,182 (39,309,755)Advisor Class Units 3,075 (29)

21,008,257 (39,309,784)


Class A Units 14,998,274 35,849,977Advisor Class Units 11,103 100

Reinvested distributionsClass A Units – (418)


4,947,867 21,320,673

INCREASE (DECREASE) IN NET ASSETSClass A Units 25,941,946 (17,989,182)Advisor Class Units 14,178 71

25,956,124 (17,989,111)

NET ASSETS – END OF PERIODClass A Units 114,287,071 88,345,125Advisor Class Units 14,249 71

$114,301,320 $ 88,345,196


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MarketValue ($)

FIXED INCOME FUNDS – 14.7%558,783 Scotia Bond Fund Class I 5,609,898 5,604,989263,449 Scotia Canadian Income Fund Class I 3,357,644 3,370,020601,543 Scotia Global Bond Fund Class I 5,232,350 5,013,263258,931 Scotia Mortgage Income Fund Class I 2,831,364 2,825,453

17,031,256 16,813,725

CANADIAN EQUITY FUNDS – 44.0%959,152 Scotia Canadian Dividend Fund Class I 34,480,962 34,318,840176,932 Scotia Canadian Growth Fund Class I 11,270,402 10,290,968267,537 Scotia Resource Fund Class I 4,853,943 5,698,705

50,605,307 50,308,513

FOREIGN EQUITY FUNDS – 40.4%372,928 Scotia Global Climate Change Fund Class I 2,775,253 2,766,719544,635 Scotia Global Growth Fund Class I 17,870,034 15,309,862755,109 Scotia Global Opportunities Fund Class I 6,435,971 5,616,274470,349 Scotia Global Small Cap Fund Class I 3,990,671 2,778,631315,402 Scotia International Index Fund Class I 2,253,228 2,271,206844,841 Scotia International Value Fund Class I 6,616,476 5,062,118114,824 Scotia Latin American Fund Class I 2,944,100 3,472,796184,703 Scotia Pacific Rim Fund Class I 2,149,880 2,212,444156,091 Scotia U.S. Index Fund Class I 1,602,917 1,672,213738,820 Scotia U.S. Value Fund Class I 5,864,315 5,010,381

52,502,845 46,172,644



NET ASSETS – 100.0% 114,301,320








(Level 2) ($)



Mutual Funds 113,294,882 – – 113,294,882



A. Risk managementThe investment objective of the Scotia Selected Aggressive Growth Portfolio(the “Portfolio”) is long-term capital appreciation. It invests primarily in adiversified mix of equity mutual funds, with additional stability derived frominvestments in income mutual funds. As a result, the Portfolio is not directlyexposed to significant currency, interest rate or credit risks.









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Scotia Selected Aggressive Growth Portfolio (Continued)

Scotia Partners Income & Modest Growth Portfolio



358,938,828 326,899,794


177,493 856,372

Net Assets $358,761,335 $326,043,422





2009 2008INVESTMENT INCOMEDividends $ 1,695,388 $ 2,539,791Interest 10,515,230 12,792,044Capital gains distributions received 703,395 124,483Foreign withholding taxes/Tax reclaims (85,940) (107,719)

12,828,073 15,348,599



6,774,651 7,267,576


Net realized gain (loss) on investments sold (3,408,737) 390,430Change in unrealized appreciation (depreciation) of investments 38,139,333 (45,317,159)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $40,784,018 $(36,844,682)Class F Units $ – $ (1,024)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 1.30 $ (1.14)Class F Units $ – $ (1.43)


2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $326,043,422 $387,255,358Class F Units – 8,899

326,043,422 387,264,257

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 40,784,018 (36,844,682)Class F Units – (1,024)

40,784,018 (36,845,706)


Class A Units (5,350,026) (7,956,538)From realized gain

Class A Units – (2,236,448)

(5,350,026) (10,192,986)




Class A Units (41,933,494) (69,866,066)Class F Units – (7,875)

(2,716,079) (14,182,143)

INCREASE (DECREASE) IN NET ASSETSClass A Units 32,717,913 (61,211,936)Class F Units – (8,899)

32,717,913 (61,220,835)

NET ASSETS – END OF PERIODClass A Units $358,761,335 $326,043,422


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MarketValue ($)

FIXED INCOME FUNDS – 63.9%5,264,258 Fidelity Canadian Bond Fund Series O 67,933,449 69,139,1844,509,183 Mackenzie Sentinel Bond Fund Series O 49,001,536 50,145,276

616,412 Mackenzie Sentinel Real Return Bond Fund Series O 6,925,286 7,136,7513,368,359 Scotia Canadian Corporate Bond Fund Class I 33,149,650 34,194,5735,362,067 Scotia Canadian Income Fund Class I 69,913,978 68,591,020

226,923,899 229,206,804

CANADIAN EQUITY FUNDS – 16.2%886,638 CI Canadian Investment Fund Class I 22,943,602 22,502,867633,321 Dynamic Focus+ Real Estate Fund Series O 3,591,154 3,584,598891,062 Scotia Canadian Dividend Fund Class I 33,993,156 31,882,571

60,527,912 57,970,036

FOREIGN EQUITY FUNDS – 18.9%655,091 AGF Emerging Markets Fund Series O 6,078,131 7,166,699647,068 CI American Value Fund Class I 12,361,067 11,026,038602,838 Mackenzie Cundill Value Fund Series O 3,831,519 3,652,052633,075 Mackenzie Universal American Growth Class (Unhedged) Series O 8,874,005 9,729,416

3,301,534 Mackenzie Universal International Stock Fund Series O 16,007,496 14,132,215373,865 Mutual Discovery Fund Series O 5,855,546 5,346,276892,631 Templeton International Stock Fund Series O 18,372,727 16,879,659

71,380,491 67,932,355



NET ASSETS – 100.0% 358,761,335








(Level 2) ($)



Mutual Funds 355,109,195 – – 355,109,195



A. Risk managementThe investment objective of the Scotia Partners Income & Modest GrowthPortfolio (the “Portfolio”) is to achieve a balance of current income and long-term capital appreciation, with a bias towards income. It invests primarily in adiversified mix of equity and income mutual funds. As a result, the Portfolio isnot directly exposed to significant currency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 15%S&P/TSX Composite Index, 70% DEX Universe Bond Index, 15% MorganStanley Capital International World Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $77,492,448, 21.6% of the Portfolio’s Net Assets (December 31,2008-$31,534,920, 9.7% of the Portfolio’s Net Assets). The Portfolio’s historicalsensitivity measure may not be representative of its future sensitivity measure,and accordingly, the impact on Net Assets could be materially different.


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Scotia Partners Income & Modest Growth Portfolio (Continued)

Scotia Partners Balanced Income & Growth Portfolio


2009 2008ASSETSInvestments at market value $1,337,839,299 $1,119,657,102Cash 12,720,809 12,035,089Subscriptions receivable 1,249,690 607,113

1,351,809,798 1,132,299,304

LIABILITIESDistributions payable 4,165 30,942Redemptions payable 623,632 310,097Accrued expenses – 2,131,191

627,797 2,472,230

Net Assets $1,351,182,001 $1,129,827,074





2009 2008INVESTMENT INCOMEDividends $ 9,383,227 $ 14,076,940Interest 25,130,852 30,683,882Capital gains distributions received 1,170,242 204,228Foreign withholding taxes/Tax reclaims (488,478) (702,400)

35,195,843 44,262,650

EXPENSESManagement fees (note 4) 24,371,008 25,975,970Audit fees 20,139 19,375Independent Review Committee fees 2,466 2,417Custodian fees 1,044 –Filing fees 75,492 89,340Legal fees 13,106 11,325Unitholder reporting costs 66,617 68,016Unitholder administration, service fees and GST 1,619,420 1,699,279


26,165,111 27,804,125


Net realized gain (loss) on investments sold (11,766,267) 7,633,347Change in unrealized appreciation (depreciation) of investments 216,601,232 (280,551,918)






2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $1,129,647,871 $1,371,437,051Class F Units 179,203 204,759

1,129,827,074 1,371,641,810


213,865,697 (256,460,046)


Class A Units (7,857,519) (16,249,373)Class F Units (2,967) (4,924)

From realized gainClass A Units – (15,359,220)Class F Units – (2,468)

(7,860,486) (31,615,985)


Class A Units 125,984,885 193,668,400Class F Units 7,003 13,940

Reinvested distributionsClass A Units 7,852,998 31,577,166Class F Units 2,967 7,392

Payments on redemptionClass A Units (118,478,148) (179,005,438)Class F Units (19,989) (165)

15,349,716 46,261,295

INCREASE (DECREASE) IN NET ASSETSClass A Units 221,332,470 (241,789,180)Class F Units 22,457 (25,556)

221,354,927 (241,814,736)


$1,351,182,001 $1,129,827,074


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MarketValue ($)

FIXED INCOME FUNDS – 39.0%8,663,356 CI Signature Corporate Bond Fund Class I 83,570,628 86,373,6648,705,159 Fidelity Canadian Bond Fund Series O 112,659,848 114,330,9437,663,373 Mackenzie Sentinel Bond Fund Series O 83,326,357 85,222,0713,103,667 Mackenzie Sentinel Real Return Bond Fund Series O 34,863,145 35,933,9428,758,447 Scotia Canadian Corporate Bond Fund Class I 86,279,694 88,913,1249,036,700 Scotia Canadian Income Fund Class I 117,023,097 115,596,564

517,722,769 526,370,308

CANADIAN EQUITY FUNDS – 26.2%1,156,613 AGF Canadian Stock Fund Series O 51,783,800 61,901,9142,408,039 CI Canadian Investment Fund Class I 64,567,934 61,116,0412,378,619 Dynamic Focus+ Real Estate Fund Series O 14,097,258 13,462,9833,041,127 Dynamic Value Fund of Canada Series O 26,364,330 27,856,7192,026,328 Fidelity True North Fund Series O 67,998,486 61,091,1693,614,149 Scotia Canadian Dividend Fund Class I 142,558,405 129,315,709

367,370,213 354,744,535

FOREIGN EQUITY FUNDS – 33.8%4,849,022 AGF Emerging Markets Fund Series O 46,401,702 53,048,3043,133,001 CI American Value Fund Class I 60,298,815 53,386,3371,574,181 CI Global Small Companies Fund Class I 29,248,570 26,902,7601,945,210 Fidelity Global Real Estate Fund Series O 15,491,642 13,834,9155,598,721 Mackenzie Cundill Value Fund Series O 36,455,021 33,917,6112,809,932 Mackenzie Universal American Growth Class (Unhedged) Series O 39,405,784 43,184,443

14,726,062 Mackenzie Universal International Stock Fund Series O 73,588,105 63,034,9062,322,373 Mutual Discovery Fund Series O 36,891,699 33,209,9351,282,035 Templeton Global Smaller Companies Fund Series O 24,795,749 26,768,8965,787,221 Templeton International Stock Fund Series O 122,629,342 109,436,349

485,206,429 456,724,456



NET ASSETS – 100.0% 1,351,182,001








(Level 2) ($)



Mutual Funds 1,337,839,299 – – 1,337,839,299

Total Investments 1,337,839,299 – – 1,337,839,299


A. Risk managementThe investment objective of the Scotia Partners Balanced Income & GrowthPortfolio (the “Portfolio”) is to achieve a balance of current income and long-term capital appreciation, with a small bias towards capital appreciation. Itinvests primarily in a diversified mix of equity and income mutual funds. As aresult, the Portfolio is not directly exposed to significant currency, interest rateor credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 26%S&P/TSX Composite Index, 45% DEX Universe Bond Index, and 29% MorganStanley Capital International World Index, as of December 31, 2009, with allother variables held constant, would result in an increase or decrease ofapproximately $286,450,584, 21.2% of the Portfolio’s Net Assets (December 31,2008 – $110,926,422, 9.8% of the Portfolio’s Net Assets). The Portfolio’shistorical sensitivity measure may not be representative of its future sensitivitymeasure, and accordingly, the impact on Net Assets could be materiallydifferent.


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Scotia Partners Balanced Income & Growth Portfolio (Continued)


188

Scotia Partners Moderate Growth Portfolio


2009 2008ASSETSInvestments at market value $1,435,886,366 $1,166,224,925Cash 12,270,206 12,516,819Subscriptions receivable 807,681 657,968

1,448,964,253 1,179,399,712

LIABILITIESDistributions payable – 8,678Redemptions payable 529,831 691,113Accrued expenses – 2,367,230

529,831 3,067,021

Net Assets $1,448,434,422 $1,176,332,691





2009 2008INVESTMENT INCOMEDividends $ 11,779,832 $ 16,758,946Interest 19,958,935 21,735,829Capital gains distributions received 718,613 –Foreign withholding taxes/Tax reclaims (494,144) (821,241)

31,963,236 37,673,534

EXPENSESManagement fees (note 4) 27,641,395 30,209,231Audit fees 20,171 19,135Independent Review Committee fees 2,395 2,351Custodian fees 1,089 –Filing fees 85,450 103,467Legal fees 12,825 11,119Unitholder reporting costs 64,771 66,420Unitholder administration, service fees and GST 1,766,395 1,892,485


29,591,328 32,218,892








2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $1,175,476,478 $1,520,369,450Class F Units 856,213 1,001,014

1,176,332,691 1,521,370,464


278,023,375 (379,079,903)


Class A Units – (5,065,492)Class F Units – (15,726)

– (5,081,218)



Reinvested distributionsClass A Units (228) 5,059,849Class F Units – 15,725


(5,921,644) 39,123,348


272,101,731 (345,037,773)


$1,448,434,422 $1,176,332,691


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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 24.3%10,736,566 CI Signature Corporate Bond Fund Class I 103,740,939 107,043,5626,891,175 Fidelity Canadian Bond Fund Series O 89,240,502 90,506,6254,790,818 Scotia Canadian Corporate Bond Fund Class I 47,188,162 48,634,9498,279,449 Scotia Canadian Income Fund Class I 106,828,744 105,909,881

346,998,347 352,095,017

CANADIAN EQUITY FUNDS – 34.6%1,368,695 AGF Canadian Stock Fund Series O 63,805,549 73,252,5642,287,888 CI Canadian Investment Fund Class I 58,954,561 58,066,5873,813,795 Dynamic Focus+ Real Estate Fund Series O 23,014,590 21,586,0804,206,930 Dynamic Focus+ Small Business Fund Series O 39,645,941 44,845,8696,965,322 Dynamic Value Fund of Canada Series O 62,044,314 63,802,3513,136,361 Fidelity True North Fund Series O 85,806,474 94,557,2034,047,739 Scotia Canadian Dividend Fund Class I 163,559,966 144,829,714

496,831,395 500,940,368

FOREIGN EQUITY FUNDS – 40.2%7,133,351 AGF Emerging Markets Fund Series O 69,663,814 78,038,8622,508,669 CI Global Small Companies Fund Class I 47,382,357 42,873,1566,366,362 Dynamic American Value Fund Series O 45,637,872 42,909,2794,441,416 Dynamic Global Value Fund Series O 29,926,110 29,979,5584,495,127 Dynamic Power American Growth Fund Series O 34,368,191 28,993,5673,115,774 Fidelity Global Real Estate Fund Series O 25,241,531 22,160,3228,360,754 Mackenzie Cundill Value Fund Series O 55,456,191 50,650,2821,848,317 Mackenzie Universal American Growth Class (Unhedged) Series O 25,836,441 28,405,853

13,343,348 Mackenzie Universal International Stock Fund Series O 68,469,319 57,116,2033,966,274 Mutual Discovery Fund Series O 63,480,540 56,717,7172,043,009 Templeton Global Smaller Companies Fund Series O 41,183,143 42,658,0275,412,383 Templeton International Stock Fund Series O 117,375,498 102,348,155

624,021,007 582,850,981



NET ASSETS – 100.0% 1,448,434,422








(Level 2) ($)



Mutual Funds 1,435,886,366 – – 1,435,886,366

Total Investments 1,435,886,366 – – 1,435,886,366


A. Risk managementThe investment objective of the Scotia Partners Moderate Growth Portfolio (the“Portfolio”) is to achieve a balance of current income and long-term capitalappreciation, with a bias towards capital appreciation. It invests primarily in adiversified mix of equity and income mutual funds. As a result, the Portfolio isnot directly exposed to significant currency, interest rate or credit risks.









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Scotia Partners Moderate Growth Portfolio (Continued)

Scotia Partners Aggressive Growth Portfolio



361,897,125 286,848,454

LIABILITIESRedemptions payable 379,465 105,436Accrued expenses – 640,009

379,465 745,445

Net Assets $361,517,660 $286,103,009





2009 2008INVESTMENT INCOMEDividends $ 3,629,399 $ 5,405,646Interest 2,866,806 2,561,131Capital gains distributions received 54,369 –Foreign withholding taxes/Tax reclaims (137,433) (236,138)

6,413,141 7,730,639



8,024,743 9,065,437

Net investment income (loss) (1,611,602) (1,334,798)

Net realized gain (loss) on investments sold (5,892,553) 552,711Change in unrealized appreciation (depreciation) of investments 88,788,176 (124,932,801)







286,103,009 396,622,878


81,284,021 (125,714,888)




(5,869,370) 15,195,019


75,414,651 (110,519,869)


$361,517,660 $ 286,103,009


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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 9.8%541,263 Fidelity Canadian Bond Fund Series O 7,006,884 7,108,783

2,185,317 Mackenzie Sentinel Corporate Bond Fund Series O 19,640,267 19,409,989694,757 Scotia Canadian Income Fund Class I 8,919,581 8,887,257

35,566,732 35,406,029

CANADIAN EQUITY FUNDS – 41.4%269,691 AGF Canadian Stock Fund Series O 16,206,538 14,433,887566,346 CI Canadian Investment Fund Class I 14,824,400 14,373,855944,090 Dynamic Focus + Real Estate Fund Series O 5,887,847 5,343,548

1,717,682 Dynamic Focus + Small Business Fund Series O 16,913,911 18,310,4942,751,358 Dynamic Value Fund of Canada Series O 25,151,029 25,202,4431,189,054 Fidelity True North Fund Series O 33,311,496 35,848,4431,006,654 Scotia Canadian Dividend Fund Class I 41,158,668 36,018,491

153,453,889 149,531,161

FOREIGN EQUITY FUNDS – 48.0%2,613,462 AGF Emerging Markets Fund Series O 25,996,961 28,591,272

206,611 CI Global Small Companies Fund Class I 3,920,398 3,530,9812,101,294 Dynamic American Value Fund Series O 15,102,936 14,162,7202,402,467 Dynamic Global Value Fund Series O 16,558,009 16,216,6501,669,076 Dynamic Power American Growth Fund Series O 12,865,372 10,765,543

767,426 Fidelity Global Real Estate Fund Series O 6,162,212 5,458,1662,948,896 Mackenzie Cundill Value Fund Series O 19,627,634 17,864,7044,177,822 Mackenzie Universal International Stock Fund Series O 21,675,678 17,883,1661,631,581 Mutual Discovery Fund Series O 25,828,513 23,331,614

673,136 Templeton Global Smaller Companies Fund Series O 13,914,463 14,055,0751,148,379 Templeton International Stock Fund Series O 25,018,910 21,715,845

186,671,086 173,575,736



NET ASSETS – 100.0% 361,517,660








(Level 2) ($)



Mutual Funds 358,512,926 – – 358,512,926



A. Risk managementThe investment objective of the Scotia Partners Aggressive Growth Portfolio(the “Portfolio”) is long-term capital appreciation. It invests primarily in adiversified mix of equity mutual funds, with additional stability derived frominvestments in income mutual funds. As a result, the Portfolio is not directlyexposed to significant currency, interest rate or credit risks.









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Scotia Partners Aggressive Growth Portfolio (Continued)

Scotia Vision Conservative 2010 Portfolio


2009 2008ASSETSInvestments at market value $41,715,214 $41,064,101Cash 393,654 379,637Accrued investment income 2,829 –Subscriptions receivable 7,530 2,780

42,119,227 41,446,518

LIABILITIESRedemptions payable 23,529 –Accrued expenses – 66,568

23,529 66,568

Net Assets $42,095,698 $41,379,950





2009 2008INVESTMENT INCOMEDividends $ 347,039 $ 436,480Interest 961,087 1,254,103Capital gains distributions received – 6,534Foreign withholding taxes/Tax reclaims (11,242) (18,331)

1,296,884 1,678,786

EXPENSESManagement fees (note 4) 663,677 782,999Audit fees 12,985 13,165Independent Review Committee fees 61 64Custodian fees 738 –Filing fees 15,427 15,496Legal fees 4,868 4,020Unitholder reporting costs 9,055 9,713Unitholder administration, service fees and GST 69,949 77,712


776,760 888,949





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 4,093,146 $(6,036,817)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.90 $ (1.21)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 4,093,146 (6,036,817)


Class A Units (520,123) (783,303)



Class A Units 520,123 783,357Payments on redemption

Class A Units (4,505,418) (9,321,835)

(2,857,275) (6,582,916)

INCREASE (DECREASE) IN NET ASSETSClass A Units 715,748 (13,403,036)



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MarketValue ($)

CASH EQUIVALENT FUND – 10.8%455,443 Scotia Money Market Fund Class I 4,554,434 4,554,434

FIXED INCOME FUNDS – 48.2%846,802 Scotia Canadian Bond Index Fund Class I 9,096,298 9,150,881585,833 Scotia Canadian Income Fund Class I 7,649,758 7,493,915439,451 Scotia Global Bond Fund Class I 3,762,833 3,662,383

20,508,889 20,307,179

CANADIAN EQUITY FUNDS – 26.2%47,195 Scotia Canadian Blue Chip Fund Class I 1,110,194 1,264,850

118,621 Scotia Canadian Dividend Fund Class I 3,947,774 4,244,291236,542 Scotia Canadian Index Fund Class I 4,375,633 4,649,60638,626 Scotia Canadian Small Cap Fund Class I 977,943 845,584

10,411,544 11,004,331

FOREIGN EQUITY FUNDS – 13.9%112,611 Scotia Global Opportunities Fund Class I 988,199 837,57070,331 Scotia Global Small Cap Fund Class I 594,139 415,489

349,767 Scotia International Index Fund Class I 2,657,388 2,518,671140,038 Scotia International Value Fund Class I 992,862 839,079115,602 Scotia U.S. Index Fund Class I 1,481,281 1,238,461

6,713,869 5,849,270



NET ASSETS – 100.0% 42,095,698




Cash Equivalent Fund 10.8 10.7Fixed Income Funds 48.2 44.7Canadian Equity Funds 26.2 25.8Foreign Equity Funds 13.9 18.1




(Level 2) ($)



Mutual Funds 41,715,214 – – 41,715,214



A. Risk managementThe investment objective of the Scotia Vision Conservative 2010 Portfolio (the“Portfolio”) is to follow an asset allocation strategy that emphasizes a balancedtotal return. The Portfolio will gradually shift its asset mix from an emphasis onequity funds to an emphasis on income and cash equivalent funds as its targetdate (2010) approaches. The Portfolio invests primarily in a diversified mix ofmutual funds. As a result, the Portfolio is not directly exposed to significantcurrency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 23%S&P/TSX Composite Index, 47% DEX Universe Bond Index, 16% MorganStanley Capital International World Index, and 14% DEX 91-Day T-Bill Index, asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $7,745,608, 18.4% of the Portfolio’s NetAssets (December 31, 2008-$3,806,955, 9.2% of the Portfolio’s Net Assets). ThePortfolio’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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194

Scotia Vision Conservative 2010 Portfolio (Continued)

Scotia Vision Aggressive 2010 Portfolio


2009 2008ASSETSInvestments at market value $5,911,035 $5,541,859Cash 53,827 67,939Accrued investment income 221 –Subscriptions receivable 400 400

5,965,483 5,610,198

LIABILITIESDistributions payable – 73Redemptions payable 48,678 –Accrued expenses – 9,770

48,678 9,843

Net Assets $5,916,805 $5,600,355


UNITS OUTSTANDINGClass A Units 626,532 659,418



2009 2008INVESTMENT INCOMEDividends $ 56,673 $ 69,644Interest 119,286 151,064Capital gains distributions received – 1,470Foreign withholding taxes/Tax reclaims (2,506) (3,324)

173,453 218,854



113,565 130,925


Net realized gain (loss) on investments sold (249,736) (91,736)Change in unrealized appreciation (depreciation) of investments 839,689 (969,380)

Net gain (loss) on investments and transaction costs 589,953 (1,061,116)

Increase (decrease) in Net Assets from operations $ 649,841 $ (973,187)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $ 649,841 $ (973,187)




INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 649,841 (973,187)


Class A Units (59,888) (86,457)


Class A Units 295,914 594,147Reinvested distributions


Class A Units (629,305) (1,465,315)

(273,503) (784,784)

INCREASE (DECREASE) IN NET ASSETSClass A Units 316,450 (1,844,428)



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AverageCost ($)

MarketValue ($)

CASH EQUIVALENT FUND – 5.9%34,827 Scotia Money Market Fund Class I 348,268 348,268

FIXED INCOME FUNDS – 43.6%92,797 Scotia Canadian Bond Index Fund Class I 992,114 1,002,79783,081 Scotia Canadian Income Fund Class I 1,075,048 1,062,76061,688 Scotia Global Bond Fund Class I 526,394 514,106

2,593,556 2,579,663

CANADIAN EQUITY FUNDS – 29.4%11,168 Scotia Canadian Blue Chip Fund Class I 277,177 299,29916,794 Scotia Canadian Dividend Fund Class I 577,579 600,89530,568 Scotia Canadian Index Fund Class I 574,804 600,86610,937 Scotia Canadian Small Cap Fund Class I 254,065 239,436

1,683,625 1,740,496

FOREIGN EQUITY FUNDS – 21.0%24,439 Scotia Global Opportunities Fund Class I 217,550 181,76910,094 Scotia Global Small Cap Fund Class I 85,501 59,63265,984 Scotia International Index Fund Class I 497,649 475,14739,033 Scotia International Value Fund Class I 307,987 233,87627,274 Scotia U.S. Index Fund Class I 330,757 292,184

1,439,444 1,242,608



NET ASSETS – 100.0% 5,916,805








(Level 2) ($)



Mutual Funds 5,911,035 – – 5,911,035



A. Risk managementThe investment objective of the Scotia Vision Aggressive 2010 Portfolio (the“Portfolio”) is to follow an asset allocation strategy that emphasizes a balancedtotal return. The Portfolio will gradually shift its asset mix from an emphasis onequity funds to an emphasis on income and cash equivalent funds as its targetdate (2010) approaches. The Portfolio invests primarily in a diversified mix ofmutual funds. As a result, the Portfolio is not directly exposed to significantcurrency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 27%S&P/TSX Composite Index, 42% DEX Universe Bond Index, 21% MorganStanley Capital International World Index, and 10% DEX 91-Day T-Bill Index, asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $1,112,359, 18.8% of the Portfolio’s NetAssets (December 31, 2008-$520,833, 9.3% of the Portfolio’s Net Assets). ThePortfolio’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia Vision Aggressive 2010 Portfolio (Continued)




70,570,198 66,725,318


6,492 197,856

Net Assets $70,563,706 $66,527,462





2009 2008INVESTMENT INCOMEDividends $ 643,164 $ 845,277Interest 1,483,667 1,756,701Capital gains distributions received – 10,468Foreign withholding taxes/Tax reclaims (23,535) (40,529)

2,103,296 2,571,917


1,294,219 1,460,093Absorbed expenses – (9,240)

1,294,219 1,450,853











Class A Units (809,076) (1,110,595)




Class A Units (6,928,999) (10,188,263)

(3,074,835) (3,288,707)

INCREASE (DECREASE) IN NET ASSETSClass A Units 4,036,244 (16,096,045)



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MarketValue ($)


FIXED INCOME FUNDS – 47.1%1,349,027 Scotia Canadian Bond Index Fund Class I 14,513,894 14,578,128

980,840 Scotia Canadian Income Fund Class I 12,722,214 12,546,802735,772 Scotia Global Bond Fund Class I 6,284,811 6,131,925

33,520,919 33,256,855


237,986 Scotia Canadian Dividend Fund Class I 8,001,241 8,515,25124,319 Scotia Canadian Growth Fund Class I 1,424,912 1,414,450

325,245 Scotia Canadian Index Fund Class I 6,082,241 6,393,20596,865 Scotia Canadian Small Cap Fund Class I 2,437,126 2,120,556

19,854,528 20,571,415

FOREIGN EQUITY FUNDS – 17.8%282,380 Scotia Global Opportunities Fund Class I 2,521,434 2,100,257117,577 Scotia Global Small Cap Fund Class I 1,028,268 694,600778,995 Scotia International Index Fund Class I 5,890,713 5,609,542348,210 Scotia International Value Fund Class I 2,855,643 2,086,407193,245 Scotia U.S. Index Fund Class I 2,501,307 2,070,255

14,797,365 12,561,061



NET ASSETS – 100.0% 70,563,706








(Level 2) ($)



Mutual Funds 69,835,307 – – 69,835,307












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2009 2008ASSETSInvestments at market value $21,635,080 $20,368,773Cash 204,242 235,885Accrued investment income 235 –Subscriptions receivable 1,040 8,118

21,840,597 20,612,776

LIABILITIESAccrued expenses – 37,599

– 37,599

Net Assets $21,840,597 $20,575,177






626,218 735,409



443,203 504,135


Net realized gain (loss) on investments sold (1,317,355) (517,886)Change in unrealized appreciation (depreciation) of investments 4,199,528 (4,648,768)






2009 2008NET ASSETS – BEGINNING OF PERIODClass A Units $20,575,177 $25,874,914



Class A Units (183,017) (225,898)




Class A Units (2,896,580) (2,779,810)

(1,616,751) (138,459)




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MarketValue ($)

CASH EQUIVALENT FUND – 1.9%40,934 Scotia Money Market Fund Class I 409,339 409,338


8,880,980 8,821,418

CANADIAN EQUITY FUNDS – 33.1%40,431 Scotia Canadian Blue Chip Fund Class I 984,415 1,083,57361,139 Scotia Canadian Dividend Fund Class I 2,092,992 2,187,566

7,640 Scotia Canadian Growth Fund Class I 466,853 444,396100,817 Scotia Canadian Index Fund Class I 1,941,997 1,981,71570,312 Scotia Canadian Small Cap Fund Class I 1,544,945 1,539,264

7,031,202 7,236,514

FOREIGN EQUITY FUNDS – 23.7%88,694 Scotia Global Opportunities Fund Class I 747,588 659,68372,396 Scotia Global Small Cap Fund Class I 591,032 427,685

210,641 Scotia International Index Fund Class I 1,659,269 1,516,825142,674 Scotia International Value Fund Class I 1,183,863 854,87514,674 Scotia Latin American Fund Class I 356,914 443,79678,175 Scotia U.S. Index Fund Class I 956,060 837,49563,031 Scotia U.S. Value Fund Class I 510,684 427,451

6,005,410 5,167,810



NET ASSETS – 100.0% 21,840,597








(Level 2) ($)



Mutual Funds 21,635,080 – – 21,635,080










F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 31%S&P/TSX Composite Index, 39% DEX Universe Bond Index, 24% MorganStanley Capital International World Index, and 6% DEX 91-Day T-Bill Index, asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $4,368,119, 20.0% of the Portfolio’s NetAssets (December 31, 2008-$2,057,518, 10.0% of the Portfolio’s Net Assets).The Portfolio’s historical sensitivity measure may not be representative of itsfuture sensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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77,281,414 68,754,677

LIABILITIESDistributions payable 59 108Redemptions payable 12,321 300Accrued expenses – 120,548

12,380 120,956

Net Assets $77,269,034 $68,633,721





2009 2008INVESTMENT INCOMEDividends $ 758,610 $ 841,032Interest 1,459,872 1,645,085Capital gains distributions received – 17,946Foreign withholding taxes/Tax reclaims (29,113) (40,972)

2,189,369 2,463,091


1,459,252 1,594,125Absorbed expenses – (7,691)

1,459,252 1,586,434











Class A Units (730,115) (858,712)




Class A Units (6,212,814) (10,243,952)

(368,741) (365,433)




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MarketValue ($)


FIXED INCOME FUNDS – 43.3%1,412,801 Scotia Canadian Bond Index Fund Class I 15,175,860 15,267,291

955,682 Scotia Canadian Income Fund Class I 12,368,670 12,224,986716,902 Scotia Global Bond Fund Class I 6,093,467 5,974,657

33,637,997 33,466,934




23,422,835 24,071,764

FOREIGN EQUITY FUNDS – 20.8%309,442 Scotia Global Opportunities Fund Class I 2,767,304 2,301,538257,693 Scotia Global Small Cap Fund Class I 2,083,505 1,522,349747,154 Scotia International Index Fund Class I 5,784,039 5,380,253379,757 Scotia International Value Fund Class I 3,086,851 2,275,43025,552 Scotia Latin American Fund Class I 672,676 772,81463,679 Scotia Pacific Rim Fund Class I 655,030 762,778

211,762 Scotia U.S. Index Fund Class I 2,750,366 2,268,632111,629 Scotia U.S. Value Fund Class I 908,419 757,026

18,708,190 16,040,820



NET ASSETS – 100.0% 77,269,034








(Level 2) ($)



Mutual Funds 76,593,967 – – 76,593,967












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2009 2008ASSETSInvestments at market value $33,253,519 $28,660,557Cash 290,963 290,116Subscriptions receivable 57,654 6,774

33,602,136 28,957,447

LIABILITIESAccrued expenses – 54,615

Net Assets $33,602,136 $28,902,832






910,437 973,940



670,377 732,395











Class A Units (217,072) (233,994)




Class A Units (2,342,907) (4,182,825)

(62,398) (72,869)




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MarketValue ($)


11,656,887 11,584,819


102,926 Scotia Canadian Dividend Fund Class I 3,496,146 3,682,74411,472 Scotia Canadian Growth Fund Class I 705,893 667,266


11,754,002 12,090,833

FOREIGN EQUITY FUNDS – 28.5%133,228 Scotia Global Opportunities Fund Class I 1,137,358 990,913168,312 Scotia Global Small Cap Fund Class I 1,430,222 994,321369,330 Scotia International Index Fund Class I 3,001,017 2,659,543276,037 Scotia International Value Fund Class I 2,230,138 1,653,96022,255 Scotia Latin American Fund Class I 527,032 673,084

121,566 Scotia U.S. Index Fund Class I 1,483,015 1,302,352192,240 Scotia U.S. Value Fund Class I 1,453,015 1,303,694

11,261,797 9,577,867



NET ASSETS – 100.0% 33,602,136








(Level 2) ($)



Mutual Funds 33,253,519 – – 33,253,519










F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 33%S&P/TSX Composite Index, 33% DEX Universe Bond Index, 30% MorganStanley Capital International World Index, and 4% DEX 91-Day T-Bill Index asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $6,854,836, 20.4% of the Portfolio’s NetAssets (December 31, 2008-$2,890,283, 10.0% of the Portfolio’s Net Assets).The Portfolio’s historical sensitivity measure may not be representative of itsfuture sensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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39,177,093 33,237,339


9,436 66,953

Net Assets $39,167,657 $33,170,386






974,926 1,028,233



833,090 897,211












Class A Units (3,420,986) (3,750,973)

(311,999) 2,009,282




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AverageCost ($)

MarketValue ($)


11,654,974 11,583,043




14,709,613 14,885,442

FOREIGN EQUITY FUNDS – 31.5%155,676 Scotia Global Opportunities Fund Class I 1,397,742 1,157,868197,724 Scotia Global Small Cap Fund Class I 1,789,781 1,168,077539,015 Scotia International Index Fund Class I 4,225,833 3,881,449257,734 Scotia International Value Fund Class I 2,108,917 1,544,291

25,711 Scotia Latin American Fund Class I 654,453 777,62764,862 Scotia Pacific Rim Fund Class I 779,655 776,949


14,516,505 12,362,016



NET ASSETS – 100.0% 39,167,657








(Level 2) ($)



Mutual Funds 38,830,501 – – 38,830,501










F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 35%S&P/TSX Composite Index, 29% DEX Universe Bond Index, 33% MorganStanley Capital International World Index and 3% DEX 91-Day T-Bill Index, asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $8,068,537, 20.6% of the Portfolio’s NetAssets (December 31, 2008-$3,350,209, 10.1% of the Portfolio’s Net Assets).The Portfolio’s historical sensitivity measure may not be representative of itsfuture sensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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23,107,764 18,541,284


164,977 38,334

Net Assets $22,942,787 $18,502,950






548,593 543,600



494,931 542,590











Class A Units 2,165,067 3,256,912Reinvested distributionsPayments on redemption

Class A Units (1,906,422) (2,140,914)

258,645 1,115,998




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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 17.8%147,474 Scotia Canadian Bond Index Fund Class I 1,581,726 1,593,667142,506 Scotia Canadian Income Fund Class I 1,834,541 1,822,92080,722 Scotia Global Bond Fund Class I 683,174 672,738

4,099,441 4,089,325

CANADIAN EQUITY FUNDS – 42.2%42,709 Scotia Canadian Blue Chip Fund Class I 1,072,994 1,144,60677,418 Scotia Canadian Dividend Fund Class I 2,688,977 2,770,04311,764 Scotia Canadian Growth Fund Class I 711,730 684,214


9,664,185 9,678,384

FOREIGN EQUITY FUNDS – 39.6%54,327 Scotia European Fund Class I 628,036 454,067

121,552 Scotia Global Opportunities Fund Class I 1,063,546 904,071192,518 Scotia Global Small Cap Fund Class I 1,470,982 1,137,322317,376 Scotia International Index Fund Class I 2,549,514 2,285,422113,662 Scotia International Value Fund Class I 936,969 681,04122,910 Scotia Latin American Fund Class I 560,497 692,89038,410 Scotia Pacific Rim Fund Class I 484,302 460,093


10,419,577 9,091,581



NET ASSETS – 100.0% 22,942,787








(Level 2) ($)



Mutual Funds 22,859,290 – – 22,859,290










F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices(December 31, 2008 – 10%), using a historical measure of the sensitivity of thePortfolio’s return relative to the returns of its benchmark stock indices of, 39%S&P/TSX Composite Index, 18% DEX Universe Bond Index, 40% MorganStanley Capital International World Index and 3% DEX 91-Day T-Bill Index, asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $4,817,985, 21.0% of the Portfolio’s NetAssets (December 31, 2008-$1,905,804, 10.3% of the Portfolio’s Net Assets).The Portfolio’s historical sensitivity measure may not be representative of itsfuture sensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia INNOVA Income Portfolio


2009ASSETSInvestments at market value $146,474,846Cash 2,183,973Subscriptions receivable 961,562

149,620,381

LIABILITIESDistributions payable 21,887Redemptions payable 20,000

41,887

Net Assets $149,578,494

NET ASSETS PER CLASSClass A Units $149,578,494

UNITS OUTSTANDINGClass A Units 13,472,078

NET ASSETS PER UNITClass A Units $ 11.10

S T AT E M E N T O F O P E R AT I O N SFor the periods ended December 31,*

2009INVESTMENT INCOMEDividends $ 399,321Interest 1,574,897Capital gains distributions received 17,041Foreign withholding taxes/Tax reclaims (14,904)

1,976,355


882,724Absorbed expenses (11,056)

871,668


Net realized gain (loss) on investments sold 89,673Change in unrealized appreciation (depreciation) of investments 3,476,106

Net gain (loss) on investments and transaction costs 3,565,779

Increase (decrease) in Net Assets from operations $4,670,466

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units $4,670,466

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITClass A Units $ 0.99

S TA T E M E N T O F C H A N G E S I N N E T A S S E T SFor the periods ended December 31,*

2009NET ASSETS – BEGINNING OF PERIODClass A Units $ –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSClass A Units 4,670,466


Class A Units (1,087,646)


Class A Units 150,034,937Reinvested distributions

Class A Units 1,065,759Payments on redemption


145,995,674

INCREASE (DECREASE) IN NET ASSETSClass A Units 149,578,494

NET ASSETS – END OF PERIODClass A Units $149,578,494

* For the period since Portfolio start date January 19, 2009.


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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 73.7%1,742,095 Pinnacle American Core-Plus Bond Fund Class I 13,952,172 14,511,6486,353,627 Scotia Canadian Income Fund Class I 80,436,150 81,274,9661,386,764 Scotia Short-Mid Government Bond Fund Class I 14,569,475 14,471,577

108,957,797 110,258,191

CANADIAN EQUITY FUNDS – 11.7%155,275 Pinnacle Canadian Small Cap Equity Fund Class I 2,324,334 2,794,953

1,365,770 Scotia Canadian Equity Fund Class I 13,757,458 14,658,668

16,081,792 17,453,621

FOREIGN EQUITY FUNDS – 12.5%311,267 Pinnacle American Value Equity Fund Class I 2,712,662 2,860,542247,043 Pinnacle Global Equity Fund Class I 2,715,219 2,892,872131,448 Pinnacle Global Real Estate Securities Fund Class I 1,315,417 1,431,473961,130 Pinnacle International Equity Fund Class I 8,418,362 8,707,836376,726 Scotia U.S. Equity Fund Class I 2,797,491 2,870,311

17,959,151 18,763,034



NET ASSETS – 100.0% 149,578,494




Fixed Income Funds 73.7Canadian Equity Funds 11.7Foreign Equity Funds 12.5




(Level 2) ($)



Mutual Funds 146,474,846 – – 146,474,846



A. Risk managementThe investment objective of the Scotia INNOVA Income Portfolio (the“Portfolio”) is to achieve a balance of current income and long term capitalappreciation, with a significant bias towards income. It invests primarily in adiversified mix of mutual funds, and/or equity securities and/or fixed incomesecurities located anywhere in the world. As a result, the Portfolio is notdirectly exposed to significant currency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices, using ahistorical measure of the sensitivity of the Portfolio’s return relative to thereturns of its benchmark stock indices of, 75% DEX Universe Bond Index, 12%S&P/TSX Composite Total Return Index and 13% Morgan Stanley CapitalInternational World Index, as of December 31, 2009, with all other variablesheld constant, would result in an increase or decrease of approximately$28,120,757 (approximately 18.8% of the Portfolio’s Net Assets). The Portfolio’shistorical sensitivity measure may not be representative of its future sensitivitymeasure, and accordingly, the impact on Net Assets could be materiallydifferent.


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Scotia INNOVA Income Portfolio (Continued)

Scotia INNOVA Balanced Income Portfolio



144,765,474


16,339

Net Assets $144,749,135





2009INVESTMENT INCOMEDividends $ 622,771Interest 1,370,538Capital gains distributions received 8,258Foreign withholding taxes/Tax reclaims (27,247)

1,974,320



976,085

Net investment income (loss) 998,235










Class A Units (989,977)



Class A Units 977,638Payments on redemption


139,588,037





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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 59.1%1,354,279 Pinnacle American Core-Plus Bond Fund Class I 10,785,087 11,281,1485,246,940 Scotia Canadian Income Fund Class I 66,248,405 67,118,329

685,735 Scotia Short-Mid Government Bond Fund Class I 7,200,344 7,155,989

84,233,836 85,555,466



23,617,440 25,793,321

FOREIGN EQUITY FUNDS – 21.5%533,834 Pinnacle American Value Equity Fund Class I 4,632,693 4,905,937472,080 Pinnacle Global Equity Fund Class I 5,134,968 5,528,054251,185 Pinnacle Global Real Estate Securities Fund Class I 2,474,276 2,735,403

1,343,013 Pinnacle International Equity Fund Class I 11,687,090 12,167,696749,348 Scotia U.S. Equity Fund Class I 5,553,214 5,709,359

29,482,241 31,046,449



NET ASSETS – 100.0% 144,749,135








(Level 2) ($)



Mutual Funds 142,395,236 – – 142,395,236



A. Risk managementThe investment objective of the Scotia INNOVA Balanced Income Portfolio (the“Portfolio”) is to achieve a balance of current income and long term capitalappreciation, with a bias towards income. It invests primarily in a diversifiedmix of mutual funds, and/or equity securities and/or fixed income securitieslocated anywhere in the world. As a result, the Portfolio is not directly exposedto significant currency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices, using ahistorical measure of the sensitivity of the Portfolio’s return relative to thereturns of its benchmark stock indices of, 60% DEX Universe Bond Index, 18%S&P/TSX Composite Total Return Index and 22% Morgan Stanley CapitalInternational World Index, as of December 31, 2009, with all other variablesheld constant, would result in an increase or decrease of approximately$22,291,367 (approximately 15.4% of the Portfolio’s Net Assets). The Portfolio’shistorical sensitivity measure may not be representative of its future sensitivitymeasure, and accordingly, the impact on Net Assets could be materiallydifferent.


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Scotia INNOVA Balanced Income Portfolio (Continued)

Scotia INNOVA Balanced Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31

2009ASSETSInvestments at market value $194,457,717Cash 2,267,042Subscriptions receivable 1,684,743

198,409,502


12,403

Net Assets $198,397,099





2009INVESTMENT INCOMEDividends $ 1,283,469Interest 1,351,978Foreign withholding taxes/Tax reclaims (54,188)

2,581,259

EXPENSESManagement fees (note 4) 1,304,433Audit fees 12,811Independent Review Committee fees 38Custodian fees 7,665Filing fees 3,189Legal fees 4,614Unitholder reporting costs 9,711Unitholder administration, service fees and GST 92,934

1,435,395Absorbed expenses (162)

1,435,233











Class A Units (1,146,026)From realized gain


(1,167,631)



Class A Units 1,165,228Payments on redemption


188,604,991





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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 39.1%1,377,863 Pinnacle American Core-Plus Bond Fund Class I 10,941,095 11,477,5965,171,704 Scotia Canadian Income Fund Class I 65,211,850 66,155,923

76,152,945 77,633,519



48,539,199 53,194,697

FOREIGN EQUITY FUNDS – 32.1%1,122,102 Pinnacle American Value Equity Fund Class I 9,679,324 10,312,113

991,158 Pinnacle Global Equity Fund Class I 10,740,757 11,606,464429,452 Pinnacle Global Real Estate Securities Fund Class I 4,206,817 4,676,732

2,906,810 Pinnacle International Equity Fund Class I 25,153,293 26,335,6981,404,168 Scotia U.S. Equity Fund Class I 10,401,168 10,698,494

60,181,359 63,629,501



NET ASSETS – 100.0% 198,397,099








(Level 2) ($)



Mutual Funds 194,457,717 – – 194,457,717



A. Risk managementThe investment objective of the Scotia INNOVA Balanced Growth Portfolio (the“Portfolio”) is to achieve a balance of current income and long term capitalappreciation, with a bias towards capital appreciation. It invests primarily in adiversified mix of mutual funds, and/or equity securities and/or fixed incomesecurities located anywhere in the world. As a result, the Portfolio is notdirectly exposed to significant currency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices, using ahistorical measure of the sensitivity of the Portfolio’s return relative to thereturns of its benchmark stock indices of, 40% DEX Universe Bond Index , 27%S&P/TSX Composite Total Return Index and 33% Morgan Stanley CapitalInternational World Index, as of December 31, 2009, with all other variablesheld constant, would result in an increase or decrease of approximately$30,156,359 (approximately 15.2% of the Portfolio’s Net Assets). The Portfolio’shistorical sensitivity measure may not be representative of its future sensitivitymeasure, and accordingly, the impact on Net Assets could be materiallydifferent.


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Scotia INNOVA Balanced Growth Portfolio (Continued)

Scotia INNOVA Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31


107,641,115

LIABILITIESDistributions payable 2,422

Net Assets $107,638,693





2009INVESTMENT INCOMEDividends $ 877,266Interest 535,233Foreign withholding taxes/Tax reclaims (37,350)

1,375,149



905,392











Class A Units (469,757)From realized gain


(533,580)





100,652,213





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AverageCost ($)

MarketValue ($)

FIXED INCOME FUNDS – 24.4%493,391 Pinnacle American Core-Plus Bond Fund Class I 3,893,182 4,109,943

1,734,584 Scotia Canadian Income Fund Class I 21,816,815 22,188,630

25,709,997 26,298,573



32,208,264 35,711,362

FOREIGN EQUITY FUNDS – 40.1%785,310 Pinnacle American Value Equity Fund Class I 6,721,452 7,216,999664,815 Pinnacle Global Equity Fund Class I 7,113,067 7,784,984275,760 Pinnacle Global Real Estate Securities Fund Class I 2,645,728 3,003,022

1,979,597 Pinnacle International Equity Fund Class I 16,964,736 17,935,145942,312 Scotia U.S. Equity Fund Class I 6,946,394 7,179,569

40,391,377 43,119,719



NET ASSETS – 100.0% 107,638,693








(Level 2) ($)



Mutual Funds 105,129,654 – – 105,129,654



A. Risk managementThe investment objective of the Scotia INNOVA Growth Portfolio (the“Portfolio”) is to achieve a balance of long term capital appreciation and currentincome, with a significant bias towards capital appreciation. It invests primarilyin a diversified mix of mutual funds, and/or equity securities and/or fixedincome securities located anywhere in the world. As a result, the Portfolio isnot directly exposed to significant currency, interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices, using ahistorical measure of the sensitivity of the Portfolio’s return relative to thereturns of its benchmark stock indices of, 25% DEX Universe Bond Index,33.5% S&P/TSX Composite Total Return Index and 41.5% Morgan StanleyCapital International World Index, as of December 31, 2009, with all othervariables held constant, would result in an increase or decrease of approx-imately $14,854,140 (approximately 13.8% of the Portfolio’s Net Assets). ThePortfolio’s historical sensitivity measure may not be representative of its futuresensitivity measure, and accordingly, the impact on Net Assets could bematerially different.


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Scotia INNOVA Growth Portfolio (Continued)

Scotia INNOVA Maximum Growth PortfolioS T AT E M E N T O F N E T A S S E T SAs at December 31

2009ASSETSInvestments at market value $23,873,436Cash 116,361Subscriptions receivable 161,660

24,151,457

Net Assets $24,151,457





2009INVESTMENT INCOMEDividends $ 260,093Interest 27,483Foreign withholding taxes/Tax reclaims (10,851)

276,725



222,721











Class A Units (54,074)From realized gain


(68,122)





22,106,043





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AverageCost ($)

MarketValue ($)


864,350 Scotia Canadian Equity Fund Class I 8,502,004 9,276,984

9,854,805 10,975,944

FOREIGN EQUITY FUNDS – 53.4%230,059 Pinnacle American Value Equity Fund Class I 1,966,261 2,114,244201,729 Pinnacle Global Equity Fund Class I 2,155,231 2,362,24887,382 Pinnacle Global Real Estate Securities Fund Class I 839,874 951,589

591,616 Pinnacle International Equity Fund Class I 5,061,528 5,360,039276,853 Scotia U.S. Equity Fund Class I 2,045,734 2,109,372

12,068,628 12,897,492



NET ASSETS – 100.0% 24,151,457




Canadian Equity Funds 45.4Foreign Equity Funds 53.4




(Level 2) ($)



Mutual Funds 23,873,436 – – 23,873,436



A. Risk managementThe investment objective of the Scotia INNOVA Maximum Growth Portfolio(the “Portfolio”) is long term capital appreciation. It invests primarily in adiversified mix of mutual funds and/or equity securities located anywhere in theworld. As a result, the Portfolio is not directly exposed to significant currency,interest rate or credit risks.







F. Other price riskOther price risk is the risk that the market value of the Portfolio’s financialinstruments will fluctuate as a result of changes in market prices (other thanthose arising from interest rate or currency risk). The impact on the Net Assetsof the Portfolio due to a 20% change in the respective stock indices, using ahistorical measure of the sensitivity of the Portfolio’s return relative to thereturns of its benchmark stock indices of, 45.5% S&P/TSX Composite TotalReturn Index and 54.5% Morgan Stanley Capital International World Index , asof December 31, 2009, with all other variables held constant, would result in anincrease or decrease of approximately $3,477,810 (approximately 14.4% of thePortfolio’s Net Assets). The Portfolio’s historical sensitivity measure may not berepresentative of its future sensitivity measure, and accordingly, the impact onNet Assets could be materially different.


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Scotia INNOVA Maximum Growth Portfolio (Continued)

Notes to Financial Statements

December 31, 2009

1. The Funds

All of the funds presented in these financial statements(individually a “Fund” and collectively, the “Funds”) areopen-ended mutual fund trusts established under the lawsof the Province of Ontario pursuant to a master declara-tion of trust (“Declaration of Trust”) dated as atFebruary 14, 2005, as amended and/or restated from timeto time. The inception date for each Fund is as follows:

Scotia T-Bill Fund October 3, 1991

Scotia Premium T-Bill Fund July 10, 1992

Scotia Money Market Fund August 30, 1990

Scotia U.S.$ Money Market Fund September 3, 1996

Scotia Short-Mid Government Bond Fund

(formerly, Scotia Cassels Short-Mid Government Bond Fund) September 30, 2007

Scotia Mortgage Income Fund September 22, 1992

Scotia Bond Fund August 17, 2009

Scotia Canadian Income Fund November 1, 1957

Scotia Canadian Corporate Bond Fund

(formerly, Scotia Cassels Canadian Corporate Bond Fund) October 30, 2003

Scotia U.S. $ Bond Fund November 27, 1991

Scotia Global Bond Fund July 4, 1994

Scotia Advantaged Income Fund

(formerly, Scotia Cassels Advantaged Income Fund) September 30, 2007

Scotia Diversified Monthly Income Fund June 10, 2005

Scotia Canadian Balanced Fund May 7, 1990

Scotia Canadian Tactical Asset Allocation Fund February 20,1961

Scotia Canadian Dividend Fund October 28, 1992

Scotia Canadian Blue Chip Fund December 31, 1986

Scotia Canadian Equity Fund

(formerly, Scotia Cassels Canadian Equity Fund) June 10, 2005

Scotia Canadian Growth Fund February 20, 1961

Scotia Canadian Small Cap Fund October 28, 1992

Scotia Resource Fund July 6, 1993

Scotia North American Equity Fund

(formerly, Scotia Cassels North American Equity Fund) June 10, 2005

Scotia Cyclical Opportunities Fund

(formerly, Scotia Cassels Cyclical Opportunities Fund) November 3, 2008

Scotia U.S. Equity Fund

(formerly, Scotia Cassels U.S. Equity Fund) June 10, 2005

Scotia U.S. Growth Fund December 31, 1986

Scotia U.S. Value Fund November 30, 2000

Scotia International Equity Fund

(formerly, Scotia Cassels International Equity Fund) June 10, 2005

Scotia International Value Fund November 30, 2000

Scotia European Fund September 3, 1996

Scotia Pacific Rim Fund August 18, 1994

Scotia Latin American Fund August 18, 1994

Scotia Global Growth Fund February 20, 1961

Scotia Global Small Cap Fund November 30, 2000

Scotia Global Opportunities Fund November 30, 2000

Scotia Global Climate Change Fund January 25, 2008

Scotia Canadian Bond Index Fund September 20, 1999

Scotia Canadian Index Fund December 13, 1996

Scotia U.S. Index Fund December 13, 1996

Scotia CanAm Index Fund July 9, 1993

Scotia Nasdaq Index Fund November 30, 2000

Scotia International Index Fund September 20, 1999

Scotia Selected Income & Modest Growth Portfolio April 22, 2003

Scotia Selected Balanced Income & Growth Portfolio April 22, 2003

Scotia Selected Moderate Growth Portfolio April 22, 2003

Scotia Selected Aggressive Growth Portfolio April 22, 2003

Scotia Partners Income & Modest Growth Portfolio November 29, 2002

Scotia Partners Balanced Income & Growth Portfolio November 29, 2002

Scotia Partners Moderate Growth Portfolio November 29, 2002

Scotia Partners Aggressive Growth Portfolio November 29, 2002

Scotia Vision Conservative 2010 Portfolio June 10, 2005

Scotia Vision Aggressive 2010 Portfolio June 10, 2005







Scotia INNOVA Income Portfolio January 13, 2009

Scotia INNOVA Balanced Income Portfolio January 13, 2009

Scotia INNOVA Balanced Growth Portfolio January 13, 2009

Scotia INNOVA Growth Portfolio January 13, 2009

Scotia INNOVA Maximum Growth Portfolio January 13, 2009

The Statement of Investment Portfolio of each of theFunds is as at December 31, 2009. The Statement of NetAssets are as at December 31, 2009 and 2008, and theStatement of Operations and Statement of Changes in NetAssets are for the years ended December 31, 2009 and2008, except for Funds or classes started during eitheryear, in which case the information presented is for theperiod from the Fund inception date (as noted above) orclass start date, respectively, to December 31, 2009 or2008, as applicable.

On November 1, 2009, the manager and trustee of theFunds changed from Scotia Securities Inc. to Scotia AssetManagement L.P. (“SAM” or the “Manager”).

On December 11, 2009, the Master Declaration of Trustwas amended to change the name of the “Scotia PrivateClient” class to “Manager Class” units and delete the word“Cassels” from the names of certain of the Funds asdescribed above.

2. Summary of significant accounting policies

These financial statements have been prepared in accor-dance with Canadian generally accepted accounting princi-ples (“GAAP”). In applying GAAP, the Manager may makeestimates and assumptions that affect the reportedamounts in the financial statements. Actual results maydiffer from such estimates. The significant accounting

219

policies followed by the Funds for the fiscal years endedDecember 31, 2009 and 2008 are summarized below.

(a) Accounting changes

(i) In January 2009, the Canadian Institute of Char-tered Accountants (“CICA”) issued EmergingIssues Committee (“EIC”) Abstract 173–CreditRisk and Fair Value of Financial Assets and Finan-cial Liabilities (“EIC–173”). EIC–173 providesguidance on how to take into account credit riskof an entity and counterparty when determiningthe fair value of financial assets and financialliabilities, including derivative instruments.EIC-173 is applicable to the Funds’ interim andannual financial statements for its fiscal yearended December 31, 2009, with retrospectiveapplication. The adoption of EIC-173 did not resultin a material impact on the Funds’ financialstatements.

(ii) In March 2009, CICA Handbook Section 3862,“Financial Instruments – Disclosures”, wasamended to align with International FinancialReporting Standards (“IFRS”) 7, Financial Instru-ments – Disclosures. The amendments are effec-tive for annual financial statements for fiscal yearsending after September 30, 2009. The amend-ments introduce a three level fair value hierarchywhich provides information about the relativeobservability of inputs to fair value measurementof financial assets and liabilities. As per the CICAHandbook, the levels are defined as follows:

• Level 1: Fair value is based on quoted prices inactive markets for identical assets or liabilities;

• Level 2: Fair value is based on inputs other thanquoted prices included in Level 1 that areobservable for the assets or liabilities, eitherdirectly or indirectly. This is inclusive of bondsand debentures that are based on multi-dealerpricing, short-term notes carried at amortizedcost, foreign equity securities in markets closingbefore 4:00pm Eastern time and securities notactively traded and considered illiquid;

• Level 3: Fair value is based on non-observableinputs that are not supported by market data forthe assets or liabilities.

The adoption of the new standards does not impactthe fair value of the Funds’ investments or Net Assets.This additional disclosure is provided in the Statementof Investment Portfolio.

(b) Capital disclosures

Section 1535, “Capital Disclosures” of the CICA Hand-book establishes standards for disclosing informationabout each of the Fund’s capital and how it is man-aged. These standards apply to financial statementsrelating to fiscal years beginning on or after October 1,2007. The disclosure requirements pertaining toSection 1535 are reported in Note 3.

(c) Valuation of investments

The fair value of investments as at the financialreporting period end is determined as follows:

(i) In accordance with Accounting Guideline 18,“Investment Companies”, investments aredeemed to be categorized as held for trading andare required to be recorded at a fair value asdefined in CICA Handbook Section 3855, “Finan-cial Instruments – Recognition and Measurement”(“Section 3855”). Investments that are traded inan active market on a recognized public stockexchange and over-the-counter markets, onwhich the investments are traded, are valued attheir bid prices for investments held and askprices for investments sold short. Securities withno available bid, or a quoted value determined bythe Manager to be inaccurate or unreliable, arevalued in such a manner as in the opinion of theManager most accurately reflects the asset’s fairvalue. The application of this section impacts thevaluation and disclosure of the net assets of aninvestment fund for financial reporting purposes(“Net Assets”). The value used to determine theFunds’ daily price for purchase and redemptionof units (“Pricing NAV” or “Net Asset Value”) isnot affected by this accounting policy change. Areconciliation of Net Asset Value and Net Assetsof each Fund is provided in Note 10.

(ii) Short-term debt instruments are carried at amor-tized cost, which in the opinion of the Manager,approximates fair value.

(iii) Mortgages are valued at their fair value using theprevailing rate of return on new mortgages ofsimilar type and term.

(iv) Investments in underlying funds are valued basedon the net asset value per unit provided by theunderlying fund’s manager at the end of eachvaluation day.

(v) The value of currency forward contracts is thegain or loss that would be realized if, on thevaluation date, the position were to be closedout and recorded as an unrealized gain or loss.Upon maturity of the contracts, the difference

220

between the cost and the market value of thecurrency is reported in “Net realized gain (loss)on currency forwards”.

(vi) Non exchange traded warrants are valued usingthe Black-Scholes method.

(vii) Futures contracts are valued at their bid pricesfor financial reporting purposes at the close ofbusiness on each valuation date. Any differencebetween the settlement value at the close ofbusiness on the current valuation date and thatof the previous valuation date is settled into cashdaily and recorded in the Statement of Opera-tions as “Interest”. Amounts receivable (payable)from (to) settlement of futures contracts arereflected in the Statements of Net Assets as“Receivable for (Payable for) futures contracts”.

(viii) Options are valued at their bid price for longpositions and their ask price for short positionsas reported by the principal exchange or over-the-counter market on which the contract istraded.

(ix) Financial assets and liabilities other than invest-ment securities are valued at cost or amortizedcost. These balances are short-term in nature,therefore, their carrying values approximate fairvalue.

(d) Investment transactions and income recognition

Investment transactions are accounted for on a tradedate basis. In accordance with Section 3855, transac-tion costs directly attributable to the acquisition ordisposal of an investment are expensed and areincluded in “Transaction costs” in the Statement ofOperations. The investment cost of a security repre-sents the amount paid, and is determined on anaverage cost basis excluding transaction costs.

Dividend income is recognized on the ex-dividend dateand interest is recognized on an accrual basis.

Realized gain and loss on the sale of short-term debtinstruments are recorded as an adjustment to interestincome.

Income, realized gain (loss) and unrealized gain (loss)are allocated among the classes on a pro rata basis.

(e) Foreign currency conversion

Amounts denominated in foreign currencies are con-verted into Canadian dollars as follows:

(i) market value of investments and other assets andliabilities at the rates of exchange prevailing as atthe valuation date; and

(ii) purchase and sale of investments and investmentincome at the rates of exchange prevailing on therespective dates of such transactions.

This does not apply to Scotia U.S. $ Money MarketFund and Scotia U.S. $ Bond Fund which are denom-inated in U.S. dollars.

(f) Foreign exchange

Foreign exchange gain (loss) on purchases and salesof foreign currencies are included in “Net realized gain(loss) on foreign exchange” in the Statement ofOperations.

This does not apply to Scotia U.S. $ Money Market Fundand Scotia U.S. $ Bond Fund which are denominated inU.S. dollars.

(g) Securities lending

Some of the Funds may enter into securities lendingtransactions. These transactions involve the temporaryexchange of securities for collateral with a commit-ment to return the same securities to the Fund on afuture date. The income earned from these securitieslending transactions is recorded in the Statement ofOperations. The market value of the securities lentand collateral held is determined on a daily basis. Thesecurities lending arrangement can be terminated bythe borrower, the securities lending agent or a Fundat any time.

3. Unitholders’ equity

Units issued and outstanding represent the capital of eachFund. Each of the Funds may issue an unlimited numberof units. Each unit is redeemable at the option of theunitholder in accordance with the Declaration of Trust,ranks pari passu with all other units of the Fund, andentitles the unitholder to a proportionate undivided inter-est in the Net Asset Value of the Fund. Unitholders areentitled to distributions when declared. Distributions onunits of a Fund are reinvested in additional units of theFund or at the option of the unitholder, paid in cash. TheFunds have no restrictions on capital or specific capitalrequirements. SAM manages the capital of the Funds inaccordance with the Funds’ investment objectives.

The units of each of the Funds are issued and redeemedat their Pricing NAV per unit which is determined as ofthe close of business on each day that the Toronto StockExchange is open for trading. The Pricing NAV per unit iscalculated by dividing the net assets of the Fund by thetotal number of units outstanding.

221

For the twelve month periods ended December 31, 2009and 2008, the following numbers of units were issued, re-invested and redeemed:

FundUnits

issuedUnits

reinvestedUnits

redeemedUnits

issuedUnits

reinvestedUnits

redeemed

2009 2008

Scotia T-Bill FundClass A Units 6,383,693 17,986 9,697,193 12,386,890 310,146 10,394,235

Scotia Premium T-bill FundClass A Units 59,914,736 420,047 74,991,580 101,993,106 2,496,188 105,508,630

Scotia Money Market FundClass A Units 112,355,964 407,557 117,017,764 141,847,615 2,544,660 121,295,394Advisor Class Units 1,555,994 3,718 1,782,486 1,805,991 8,163 864,423Premium Class Units 107,000,593 260,427 55,026,400 3,834,863 4,772 362,661Class I Units 480,548 18,462 677,029 241,086 57,601 511,848Manager Class Units 233,853,476 1,525,072 218,066,524 166,710,613 3,119,195 149,182,427

Scotia U.S.$ Money Market FundClass A Units 13,180,496 10,531 12,318,998 18,591,988 204,156 18,634,773

Scotia Short-Mid Government Bond FundClass I Units 2,053,311 27,479 8,291 – – –Manager Class Units 24,477,445 1,187,293 10,120,920 17,658,416 1,106,508 5,661,982

Scotia Mortgage Income FundClass A Units 17,378,619 562,122 3,946,046 798,155 500,603 2,617,934Class F Units 1,834,744 8,859 265,939 – 14 56Class I Units 6,936,950 1,004,604 10,114,909 4,320,732 1,192,723 3,101,051

Scotia Bond FundClass A Units 3,585,086 16,237 66,637 – – –Class I Units 39,316,171 392,290 1,142,716 – – –

Scotia Canadian Income FundClass A Units 13,768,598 1,991,678 7,025,424 7,344,702 1,931,242 9,540,526Advisor Class Units 344,722 3,661 27,936 104,971 1,424 8,330Class F Units 8,711 719 9,820 1,682 928 1,659Class I Units 27,141,922 3,318,246 31,157,912 9,084,176 4,630,933 61,950,558Manager Class Units 8,901,392 1,081,432 9,099,020 7,799,962 1,333,622 14,876,306

Scotia Canadian Corporate Bond FundClass I Units 14,974,621 1,015,742 1,573,998 19,016,366 525,848 3,138,366Manager Class Units 58,282,768 6,344,652 41,545,763 32,337,414 6,395,259 32,084,728

Scotia U.S. $ Bond FundClass A Units 1,746,941 46,561 331,238 466,681 51,967 425,881Class F Units – 24 842 – 53 –

Scotia Global Bond FundClass A Units 685,842 54,884 836,456 681,492 71,319 544,829Class I Units 7,158,064 148,091 1,084,636 287,479 136,216 1,518,802

Scotia Advantaged Income FundManager Class Units 2,371,150 – 1,097,650 5,968,891 – 1,387,403

Scotia Diversified Monthly Income FundClass A Units 45,851,309 2,972,293 10,938,866 30,583,438 2,878,881 12,983,177Advisor Class Units 450,320 8,246 10,393 19,601 206 3,823Class F Units 664 58 251 695 57 246

Scotia Canadian Balanced FundClass A Units 20,098,709 1,730,104 11,641,146 25,058,430 1,836,771 13,191,487Class F Units 122 61 1,061 – 79 –

Scotia Canadian Tactical Asset Allocation FundClass A Units 3,146,775 374,261 2,576,466 2,998,175 356,511 3,200,149Advisor Class Units 5,750 371 379 28,991 253 –Class F Units 40 29 – 36 28 3

Scotia Canadian Dividend FundClass A Units 9,030,366 620,629 5,934,493 10,875,249 503,755 7,664,363Advisor Class Units 358,110 4,400 62,113 378,463 2,710 22,762Class F Units 63,776 3,625 34,978 80,941 3,254 87,638Class I Units 5,941,995 487,536 2,007,845 12,390,838 341,701 4,111,185Manager Class Units 1,807,419 42,154 865,090 1,649,729 46,297 1,774,306

Scotia Canadian Blue Chip FundClass A Units 582,740 2 1,138,492 632,877 77,987 1,480,317Class F Units 10 – 298 – 2 740Class I Units 78,194 – 172,977 115,951 3,083 358,568

Scotia Canadian Equity FundClass I Units 11,571,099 171,232 453,370 – – –Manager Class Units 9,603,014 227,832 10,538,891 13,982,813 384,294 3,654,519

222

FundUnits

issuedUnits

reinvestedUnits

redeemedUnits

issuedUnits

reinvestedUnits

redeemed

2009 2008

Scotia Canadian Growth FundClass A Units 448,676 – 831,260 491,025 (11) 1,097,960Advisor Class Units 5,206 – 408 4,242 – –Class F Units 2,621 12 – – – 391Class I Units 303,523 11,323 3,083,654 1,658,955 30,734 158,589

Scotia Canadian Small Cap FundClass A Units 360,993 91,591 346,720 108,451 7 527,198Class F Units 306 16 – – – –Class I Units 284,651 36,745 6,990,838 3,237,708 234,130 451,456Manager Class Units – – – 1,049 – 1,124,725

Scotia Resource FundClass A Units 1,715,005 – 959,812 1,419,769 – 1,135,503Class F Units – – – – – 441Class I Units 2,816,603 – 382,910 – – –

Scotia North American Equity FundManager Class Units 22,044,594 820,089 12,879,243 14,649,261 1,259,652 20,150,255

Scotia Cyclical Opportunities FundManager Class Units 4,049,975 735,921 2,103,015 5,050,243 13,457 29,985

Scotia U.S. Equity FundClass I Units 3,744,662 47,076 42,331 – – –Manager Class Units 39,533,064 145,931 7,529,077 12,747,250 168,764 3,806,403

Scotia U.S. Growth FundClass A Units 361,755 – 589,318 339,028 – 821,247Class F Units – – – – – –

Scotia U.S. Value FundClass A Units 190,915 – 353,254 297,455 – 541,340Class I Units 1,567,654 – 4,006,369 3,051,641 – 828,973

Scotia International Equity FundManager Class Units 5,613,805 360,181 12,204,512 6,648,103 1,571,679 26,667,335

Scotia International Value FundClass A Units 174,784 (3) 325,947 256,563 3,073 514,898Advisor Class Units 10,784 224 – 444 5 –Class F Units – – – – – 2,382Class I Units 1,274,525 234,378 7,666,311 6,118,220 619,180 1,497,246

Scotia European FundClass A Units 117,576 34,916 305,657 211,207 43,247 466,284Class E Units – – – 98,190 – 536,422Class I Units 33,834 1,354 580,231 577,165 31,857 9,652

Scotia Pacific Rim FundClass A Units 337,583 – 302,537 382,982 – 425,623Class I Units 2,380,848 – 93,545 42,094 – 26,619

Scotia Latin American FundClass A Units 446,541 – 332,856 651,442 (9) 581,390Class F Units 758 – 711 256 – 792Class I Units 1,427,199 – 309,405 93,371 – 20,470

Scotia Global Growth FundClass A Units 268,667 – 329,557 277,566 – 439,350Advisor Class Units 396 – – 618 – –Class I Units 552,842 123,349 2,429,395 2,809,461 95,079 496,666

Scotia Global Small Cap FundClass A Units 71,175 6,379 54,259 43,079 – 66,925Class I Units 1,236,200 236,968 10,739,961 6,669,345 325,882 1,529,562

Scotia Global Opportunities FundClass A Units 87,160 6,001 105,138 356,716 1,723 104,280Advisor Class Units – 18 – 1,971 51 –Class F Units 2,767 88 831 – 11 –Class I Units 999,278 262,403 1,956,882 3,340,096 309,356 733,584

Scotia Global Climate Change FundClass A Units 303,270 – 210,047 1,085,315 – 57,947Advisor Class Units 14,210 – 19,085 83,276 – 20,938Class I Units 4,043,317 – 55,146 – – –

Scotia Canadian Bond Index FundClass A Units 14,795,084 465,351 2,711,560 3,199,476 312,803 1,802,345Class F Units 15,390 1,386 38,401 4,429 1,883 68,500Class I Units 1,731,369 184,327 568,935 1,045,296 184,084 813,601

Scotia Canadian Index FundClass A Units 2,637,647 170,550 1,509,432 1,617,565 235,341 1,384,390Class F Units 6,396 153 1,110 1,066 44 –Class I Units 682,223 37,305 672,605 528,002 58,533 227,141

223

FundUnits

issuedUnits

reinvestedUnits

redeemedUnits

issuedUnits

reinvestedUnits

redeemed

2009 2008

Scotia U.S. Index FundClass A Units 660,187 26,841 543,133 676,053 49,796 690,836Class I Units 1,794,288 37,382 249,181 194,433 19,617 507,895

Scotia CanAm Index FundClass A Units 323,963 – 1,051,519 275,914 – 1,703,754Class F Units – – – – – –

Scotia Nasdaq Index FundClass A Units 610,193 – 501,601 539,475 – 625,301Class F Units – – 694 314 – 408

Scotia International Index FundClass A Units 468,844 – 503,603 479,361 – 602,246Class F Units – – – – – 4Class I Units 4,047,151 – 672,469 1,263,435 – 321,167

Scotia Selected Income & Modest Growth PortfolioClass A Units 4,832,372 464,015 3,258,172 5,594,454 592,771 4,287,316Advisor Class Units – 17 – 1,070 43 –

Scotia Selected Balanced Income & Growth PortfolioClass A Units 12,315,591 699,898 7,037,996 19,125,580 1,079,463 8,823,770Advisor Class Units 1,524 53 – 4,476 141 –Class F Units – 74 – 3,996 128 –

Scotia Selected Moderate Growth PortfolioClass A Units 6,712,797 19,076 4,545,746 13,098,011 195,260 4,785,322Advisor Class Units – – – 8 – –

Scotia Selected Aggressive Growth PortfolioClass A Units 1,435,269 – 943,463 2,692,930 (29) 1,159,277Advisor Class Units 1,173 – – 7 – –

Scotia Partners Income & Modest Growth PortfolioClass A Units 3,171,579 470,724 3,940,170 4,018,244 996,461 6,245,403Class F Units – – – – – 723

Scotia Partners Balanced Income & Growth PortfolioClass A Units 11,658,269 651,075 10,901,297 15,884,815 3,091,628 15,103,687Class F Units 645 235 1,850 1,115 690 13

Scotia Partners Moderate Growth PortfolioClass A Units 10,558,553 (21) 10,870,414 16,009,575 460,419 13,909,087Class F Units 6,134 – 13,634 19,632 1,366 10,974

Scotia Partners Aggressive Growth PortfolioClass A Units 2,851,472 – 3,270,442 4,679,662 – 3,702,992Class F Units 4,478 – 1,531 3,280 – 1,301

Scotia Vision Conservative 2010 PortfolioClass A Units 125,422 54,360 493,738 197,699 89,231 962,840

Scotia Vision Aggressive 2010 PortfolioClass A Units 34,224 6,342 73,452 61,261 10,171 149,660

Scotia Vision Conservative 2015 PortfolioClass A Units 339,770 83,215 766,642 574,225 126,926 1,029,964


Scotia Vision Conservative 2020 PortfolioClass A Units 585,268 75,945 696,452 910,677 100,996 1,050,122


Scotia Vision Conservative 2030 PortfolioClass A Units 374,645 – 398,062 588,930 (1) 384,878

Scotia Vision Aggressive 2030 PortfolioClass A Units 266,059 – 227,064 326,793 – 216,720

Scotia INNOVA Income PortfolioClass A Units 13,843,532 95,989 467,443 – – –

Scotia INNOVA Balanced Income PortfolioClass A Units 12,975,871 84,858 496,714 – – –

Scotia INNOVA Balanced Growth PortfolioClass A Units 17,081,791 98,686 377,649 – – –

Scotia INNOVA Growth PortfolioClass A Units 8,960,802 43,331 223,208 – – –

Scotia INNOVA Maximum Growth PortfolioClass A Units 2,025,839 5,443 101,489 – – –

224

4. Management fees and sales charges

The Funds’ management fees are calculated daily andpayable monthly on the first business day of the followingcalendar month. The Manager is entitled to a maximumannual management fee, exclusive of GST, as follows:

Class AUnits

Class FUnits

ManagerClassUnits

AdvisorClassUnits

PremiumClassUnits

% of Net Asset Value

Scotia T-Bill Fund2 1.00 – – – –Scotia Premium T-Bill Fund2 0.501 – – – –Scotia Money Market Fund2 1.00 – 0.10 1.00 0.30Scotia U.S.$ Money Market Fund2 1.00 – – – –Scotia Short-Mid Government Bond Fund – – 0.10 – –Scotia Mortgage Income Fund 1.25 0.625 – – –Scotia Bond Fund 1.10 – – – –Scotia Canadian Income Fund 1.25 0.625 0.10 1.25 –Scotia Canadian Corporate Bond Fund – – 0.10 – –Scotia U.S. $ Bond Fund 1.50 0.75 – – –Scotia Global Bond Fund 1.50 0.75 – – –Scotia Advantaged Income Fund – – 0.10 – –Scotia Diversified Monthly Income Fund 1.25 0.625 – 1.50 –Scotia Canadian Balanced Fund 1.75 0.875 – – –Scotia Canadian Tactical Asset Allocation Fund 1.75 0.875 – 1.95 –Scotia Canadian Dividend Fund 1.50 0.75 0.10 1.75 –Scotia Canadian Blue Chip Fund 1.85 0.925 – – –Scotia Canadian Equity Fund – – 0.10 – –Scotia Canadian Growth Fund 1.85 0.925 – 1.95 –Scotia Canadian Small Cap Fund 2.00 1.00 0.10 – –Scotia Resource Fund 2.00 1.00 – – –Scotia North American Equity Fund – – 0.10 – –Scotia Cyclical Opportunities Fund – – 0.10 – –Scotia U.S. Equity Fund – – 0.10 – –Scotia U.S. Growth Fund 2.00 1.00 0.10 – –Scotia U.S. Value Fund 2.00 1.00 – – –Scotia International Equity Fund – – 0.30 – –Scotia International Value Fund 2.15 1.15 – 2.15 –Scotia European Fund 2.00 1.00 – – –Scotia Pacific Rim Fund 2.00 1.00 – – –Scotia Latin American Fund 2.50 1.25 – – –Scotia Global Growth Fund 2.00 1.00 – 2.00 –Scotia Global Small Cap Fund 2.35 1.35 – – –Scotia Global Opportunities Fund 2.20 1.20 – 2.20 –Scotia Global Climate Change Fund 2.00 1.00 – 2.00 –Scotia Canadian Bond Index Fund 0.70 0.35 – – –Scotia Canadian Index Fund 0.80 0.40 – – –Scotia U.S. Index Fund 0.80 0.40 – – –Scotia CanAm Index Fund 0.80 0.40 – – –Scotia Nasdaq Index Fund 0.80 0.40 – – –Scotia International Index Fund 0.80 0.40 – – –Scotia Selected Income & Modest Growth Portfolio 1.60 0.60 – 1.80 –Scotia Selected Balanced Income & Growth Portfolio 1.75 0.75 – 1.95 –Scotia Selected Moderate Growth Portfolio 1.90 0.90 – 2.10 –Scotia Selected Aggressive Growth Portfolio 2.10 1.10 – 2.20 –Scotia Partners Income & Modest Growth Portfolio 1.85 0.85 – – –Scotia Partners Balanced Income & Growth Portfolio 2.00 1.00 – – –Scotia Partners Moderate Growth Portfolio 2.15 1.15 – – –Scotia Partners Aggressive Growth Portfolio 2.35 1.35 – – –Scotia Vision Conservative 2010 Portfolio 1.60 – – – –Scotia Vision Aggressive 2010 Portfolio 1.65 – – – –Scotia Vision Conservative 2015 Portfolio 1.70 – – – –Scotia Vision Aggressive 2015 Portfolio 1.75 – – – –Scotia Vision Conservative 2020 Portfolio 1.80 – – – –Scotia Vision Aggressive 2020 Portfolio 1.85 – – – –Scotia Vision Conservative 2030 Portfolio 2.00 – – – –Scotia Vision Aggressive 2030 Portfolio 2.05 – – – –Scotia INNOVA Income Portfolio 1.60 – – – –Scotia INNOVA Balanced Income Portfolio 1.70 – – – –Scotia INNOVA Balanced Growth Portfolio 1.80 – – – –

Class AUnits

Class FUnits

ManagerClassUnits

AdvisorClassUnits

PremiumClassUnits

% of Net Asset Value

Scotia INNOVA Growth Portfolio 1.90 – – – –Scotia INNOVA Maximum Growth Portfolio 2.00 – – – –

1 Scotia Premium T-Bill Fund pays a rebate, called amanagement fee distribution of 0.20% when the value ofthe Fund held within an account is $250,000 to$1,000,000. It pays a management fee distribution of0.35% when the value of the Fund held within an accountis greater than $1,000,000.

2 As money market yields have remained low during theperiod, the manager has opted to waive a portion of themanagement fees that otherwise would have been charged.We may discontinue waiving fees and expenses at anytime, without notice.

No management fees are charged on Class I Units. Instead,investors may negotiate a separate fee that is paid directlyto the Manager.

Investors who choose to buy Advisor Class Units under thefront-end sales charge option may have to pay a salescharge that may range from 0% to 6% of the amountinvested. The amount of the sales charge is negotiatedbetween the investor and his or her dealer. The salescharge will be deducted from the amount invested andpaid to the dealer as a commission. There are no salescharges associated with the purchase of Class A, PremiumClass, Class F, Class I or Manager Class Units.

5. Operating expenses

Each class of a Fund is allocated its own expenses and itsproportionate share of the Fund’s expenses that are com-mon to all classes. Operating expenses may include legalfees and other costs incurred in order to comply with legaland regulatory requirements and policies, audit fees,custodial fees, taxes, brokerage commissions, unitholdercommunication costs and other administration costs. Anyof these expenses which have been absorbed by theManager are reflected in the Statement of Operations. TheManager may cease to absorb expenses at any time.

6. Income taxes

The Funds qualify or expect to qualify as mutual fundtrusts under the Income Tax Act (Canada). Each of theFunds distributes sufficient amounts of its taxable netinvestment income and net realized taxable capital gains,less the amount required to enable each Fund to utilizeany available tax credit attributable to redemptions duringthe period, to its unitholders. Such income is taxable inthe hands of the unitholders. Accordingly, no provision forincome taxes has been recorded in these financialstatements.

225

Net capital losses may be carried forward indefinitely toreduce future net realized capital gains. Non-capital lossesfor income tax purposes may be carried forward for up totwenty years and applied against capital gains realized andnet income in future years. The following Funds have netcapital and/or non-capital loss carry forwards as atDecember 31, 2009:

Fund

Yearof

expiry

Non-Capital

Loss$

CapitalLoss

$

Scotia U.S.$ Money Market Fund – – 51,758,929Scotia Mortgage Income Fund – – 2,040,482Scotia Canadian Income Fund – – 44,243,331Scotia Canadian Corporate Bond Fund – – 21,820,215Scotia U.S.$ Bond Fund – – 10,520,733Scotia Global Bond Fund – – 25,832,407Scotia Advantaged Income Fund – – 6,254,535Scotia Diversified Monthly Income Fund – – 20,213,472Scotia Canadian Balanced Fund – – 155,913,346Scotia Canadian Tactical Asset Allocation Fund – – 25,094,340Scotia Canadian Dividend Fund – – 89,797,972Scotia Canadian Equity Fund – – 12,218,205Scotia Canadian Growth Fund – – 23,424,983Scotia Canadian Small Cap Fund – – 25,330,264Scotia Resource Fund 2029 985,011 17,638,037Scotia North American Equity Fund – – 63,297,189Scotia U.S. Equity Fund – – 33,650,274Scotia U.S. Growth Fund 2010 592,423 129,728,727

2014 494,003 –2015 449,146 –2028 367,040 –2029 232,487 –

Scotia U.S. Value Fund 2010 941,120 43,551,9192014 2,268,537 –2015 2,141,180 –2026 489,880 –

Scotia International Equity Fund – – 155,445,540Scotia International Value Fund – – 28,769,379Scotia European Fund – – 50,082,260Scotia Pacific Rim Fund 2015 213,541 15,892,054

2028 60,160 –2029 92,320 –

Scotia Latin American Fund 2028 468,379 11,652,4902029 47,312 –

Scotia Global Growth Fund – – 118,725,479Scotia Global Small Cap Fund – – 51,243,991Scotia Global Opportunities Fund – – 22,634,091Scotia Global Climate Change Fund 2028 52,703 3,132,799

2029 9,189 –Scotia Canadian Bond Index Fund – – 503,996Scotia Canadian Index Fund – – 33,741,869Scotia U.S. Index Fund – – 25,745,823Scotia CanAm Index Fund 2028 40,103,254 93,895,080Scotia Nasdaq Index Fund 2028 3,419,129 6,646,549Scotia International Index Fund 2028 15,571,453 6,911,350Scotia Selected Income & Modest Growth Portfolio – – 6,918,060Scotia Selected Balanced Income & Growth Portfolio – – 49,178,450Scotia Selected Moderate Growth Portfolio – – 41,450,463Scotia Selected Aggressive Growth Portfolio 2028 89,173 10,607,933

2029 419,489 –Scotia Partners Income & Modest Growth Portfolio – – 1,107,088Scotia Partners Balanced Income & Growth Portfolio – – 5,277,272Scotia Partners Moderate Growth Portfolio 2014 373,425 6,412,095Scotia Partners Aggressive Growth Portfolio 2026 193,524 2,896,287

2029 1,665,971 –Scotia Vision Conservative 2010 Portfolio – – 2,011,686Scotia Vision Aggressive 2010 Portfolio – – 175,865Scotia Vision Conservative 2015 Portfolio – – 3,248,712Scotia Vision Aggressive 2015 Portfolio – – 1,035,213Scotia Vision Conservative 2020 Portfolio – – 3,146,092Scotia Vision Aggressive 2020 Portfolio – – 1,462,103

Fund

Yearof

expiry

Non-Capital

Loss$

CapitalLoss

$

Scotia Vision Conservative 2030 Portfolio – – 1,943,142Scotia Vision Aggressive 2030 Portfolio – – 662,653

7. Soft dollar commissions

The ascertainable soft dollar arrangements in connectionwith investment portfolio transactions for the twelvemonth periods ended December 31, 2009 and 2008 are setout below.

Fund 2009 2008

Scotia Canadian Balanced Fund $ 4,562 $ 6,449Scotia Canadian Tactical Asset Allocation Fund 28,951 39,167Scotia Canadian Blue Chip Fund – 626Scotia Canadian Growth Fund – 948Scotia U.S. Value Fund 29,463 8,962Scotia International Equity Fund 8,255 –Scotia International Value Fund 987 –Scotia European Fund 1,026 2,033Scotia Latin American Fund 27,648 –Scotia Global Growth Fund 35,181 79,420Scotia Global Small Cap Fund 155,915 95,725Scotia Global Opportunities Fund 19,264 –

For certain Funds advised by SAM L.P. soft dollar arrange-ments are not ascertainable on a per Fund basis. However,the aggregate value of the soft dollar arrangements for theseFunds for the twelve month period ended December 31,2009 is $261,326 (December 31, 2008 - $61,050).

Soft dollar commissions are arrangements pursuant towhich products or services, other than the execution ofportfolio securities transactions, are obtained by a portfolioadviser from or through a broker-dealer in exchange fordirecting client securities transactions to the broker-dealer.

8. Securities lending

The Funds have entered into a securities lending programwith their custodian, The Bank of Nova Scotia (“BNS”).The aggregate market value of all securities loaned by aFund cannot exceed 50% of the net assets of the Fund.

The Funds receive collateral of at least 102% of the valueof the securities on loan. Collateral is received in the formof debt obligations of the Government of Canada, a Cana-dian provincial government, the Government of the UnitedStates of America, certain financial institutions or otherqualified securities, and is not included in the Statementsof Investment Portfolio. The aggregated dollar values ofthe securities on loan and the collateral received by theFunds as at December 31, 2009 are as follows:

FundMarket value of

securities on loanMarket value of

collateral received

Scotia T-Bill Fund $ 73,687,552 $ 77,554,510Scotia Premium T-Bill Fund 416,333,146 437,524,699Scotia Short-Mid Government Bond Fund 62,608,133 66,070,326Scotia Canadian Income Fund 15,133,063 15,900,460Scotia Diversified Monthly Income Fund 27,437,867 29,429,057Scotia Canadian Balanced Fund 38,554,703 40,931,858

226

FundMarket value of

securities on loanMarket value of

collateral received

Scotia Canadian Tactical Asset Allocation Fund 10,506,950 11,493,857Scotia Canadian Dividend Fund 71,112,566 75,946,434Scotia Canadian Blue Chip Fund 5,922,178 6,308,442Scotia Canadian Equity Fund 3,683,950 4,063,704Scotia Canadian Growth Fund 17,974,538 19,242,886Scotia Canadian Small Cap Fund 6,917,368 7,338,626Scotia Resource Fund 20,666,734 21,875,216Scotia U.S. Equity Fund 1,792,541 2,025,058Scotia Latin American Fund 968,624 1,043,733Scotia Global Growth Fund 4,215,002 4,511,247Scotia Canadian Bond Index Fund 36,260,198 38,924,112Scotia Canadian Index Fund 14,040,731 15,428,319Scotia U.S. Index Fund 78,715 92,413

9. Related party transactions

(a) BNS owns a significant interest in CI Financial Corp.(formerly, CI Financial Income Fund), the parentcompany of the manager of CI Funds and BlackmontCapital Inc. Effective December 31, 2009, BlackmontCapital Inc. was sold by CI Financial Corp. toMacquarie Group Ltd. BNS also owns a significantinterest in DundeeWealth Inc., which owns DundeeSecurities Corporation. These entities are thereforeconsidered related parties. Some of the Funds haveholdings in CI Financial Corp. and DundeeWealth Inc.and holdings in certain CI Funds and Dynamic Fundsas at December 31, 2009 and 2008. The brokerage feespaid to related parties for the twelve month periodsended December 31, 2009 and 2008 are as follows:

FundScotia

Capital Inc.Dundee Securities

CorporationBlackmontCapital Inc.

2009

Scotia Advantaged Income Fund $ 5,225 $ 2,591 $ 50Scotia Diversified Monthly Income Fund 173,289 1,840 1,050Scotia Canadian Balanced Fund 282,599 565 16,902Scotia Canadian Tactical Asset Allocation Fund 50,267 243 776Scotia Canadian Dividend Fund 341,732 9,048 15,000Scotia Canadian Blue Chip Fund 10,142 717 3,695Scotia Canadian Equity Fund 27,175 3,185 2,174Scotia Canadian Growth Fund 261,975 64,893 109,399Scotia Canadian Small Cap Fund 44,743 20,850 20,844Scotia Resource Fund 25,135 2,225 10,500Scotia North American Equity Fund 34,235 372 16,759Scotia Cyclical Opportunities Fund 60,233 1,647 10,265

FundScotia



2008

Scotia Advantaged Income Fund $ – $ – $ 1,042Scotia Diversified Monthly Income Fund 23,303 – 6,684Scotia Canadian Balanced Fund 89,975 – 848Scotia Canadian Tactical Asset Allocation Fund 37,261 8,832 575Scotia Canadian Dividend Fund 71,071 – 23,090Scotia Canadian Blue Chip Fund 15,999 – 2,411Scotia Canadian Equity Fund 8,139 772 6,922

FundScotia



2008

Scotia Canadian Growth Fund 91,316 2,560 58,337Scotia Canadian Small Cap Fund 18,983 6,747 34,734Scotia Resource Fund 9,317 12,963 20,017Scotia North American Equity Fund 19,546 8,390 3,570Scotia Cyclical Opportunities Fund 2,982 – 3,940Scotia U.S. Equity Fund 1,513 – –Scotia U.S. Growth Fund 568 – –

(b) Scotia Mortgage Income Fund purchases and sellsmortgages from Scotia Mortgage Corporation (“SMC”),a wholly owned subsidiary of BNS, and from BNS atan amount which will produce a yield to the Fund ofnot more than one-quarter of one percent less thanthe interest rate at which BNS is making similarcommitments.

For conventional uninsured mortgages, the ScotiaMortgage Income Fund pays SMC or BNS a guaranteefee equal to the present value of 0.25 percent appliedto the present value of each mortgage at the time ofpurchase. This fee is considered a transaction costand is deferred and amortized over the remaining termto maturity of the mortgages purchased. BNS hasagreed to purchase from Scotia Mortgage IncomeFund any mortgage purchased from SMC or from BNSat such time as the mortgage is in default. The priceof such purchase is equal to the principal value plusunpaid interest. There are no mortgages in arrears asat December 31, 2009.

Mortgages service fees of $1,536,549 were paid toSMC for the twelve month periods ended December 31,2009 (2008 – $1,433,312).

(c) The Manager may enter into transactions and servicearrangements with its affiliates. Scotia Capital Inc.may be involved in the purchase and sale of portfoliosecurities and currency forward contracts. BNS acts ascustodian of the Funds.

(d) The Manager, a wholly owned subsidiary of BNS, isthe trustee and manager of the Funds. As at Decem-ber 31 of each of the following years, the Managerheld the following number of units in the followingFund:

Fund 2009 2008

Scotia Global Climate Change Fund – 80,000 Class A Units

10. A comparison of Net Asset Value and Net Assets per unit, as at December 31, 2009 and 2008 is as follows:

FundNet Asset Value

Per Unit ($)Net Assets

Per Unit ($)Net Asset Value


Per Unit ($)

2009 2008

Scotia Short-Mid Government Bond FundClass I Units 10.44 10.43 – –Manager Class Units 10.44 10.43 10.46 10.46

227

FundNet Asset Value




Per Unit ($)

2009 2008

Scotia Bond FundClass A Units 10.03 10.02 – –Class I Units 10.03 10.02 – –

Scotia Canadian Income FundClass A Units 12.85 12.83 12.23 12.21Advisor Class Units 12.82 12.80 12.21 12.19Class F Units 12.81 12.80 12.22 12.20Class I Units 12.79 12.77 12.23 12.21Manager Class Units 12.80 12.78 12.23 12.21

Scotia Canadian Corporate Bond FundClass I Units 10.15 10.12 9.30 9.28Manager Class Units 10.15 10.13 9.30 9.28

Scotia U.S.$ Bond FundClass A Units 10.79 10.79 10.90 10.89Class F Units 10.77 10.77 10.89 10.88

Scotia Global Bond FundClass A Units 8.38 8.38 10.05 10.05Class I Units 8.33 8.33 10.07 10.06

Scotia Advantaged Income FundManager Class Units 8.68 8.66 7.74 7.72

Scotia Diversified Monthly Income FundClass A Units 9.68 9.66 8.58 8.56Advisor Class Units 9.64 9.63 8.67 8.66Class F Units 9.86 9.85 8.68 8.67

Scotia Canadian Balanced FundClass A Units 19.32 19.29 17.17 17.14Class F Units 18.97 18.94 16.88 16.85

Scotia Canadian Tactical Asset Allocation FundClass A Units 16.79 16.75 13.95 13.92Advisor Class Units 16.57 16.54 13.78 13.75Class F Units 16.98 16.95 14.15 14.12

Scotia Canadian Dividend FundClass A Units 35.88 35.81 28.78 28.71Advisor Class Units 35.68 35.61 28.64 28.57Class F Units 35.71 35.64 28.71 28.63Class I Units 35.78 35.71 28.84 28.76Manager Class Units 35.55 35.48 28.64 28.57

Scotia Canadian Blue Chip FundClass A Units 24.60 24.55 19.85 19.80Class F Units 24.62 24.57 20.26 20.22Class I Units 26.80 26.74 21.32 21.27

Scotia Canadian Equity FundClass I Units 10.73 10.71 – –Manager Class Units 10.74 10.71 8.53 8.51

Scotia Canadian Growth FundClass A Units 51.73 51.63 39.95 39.86Advisor Class Units 51.58 51.48 39.87 39.78Class F Units 53.47 53.37 41.19 41.10Class I Units 58.16 58.05 44.53 44.43

Scotia Canadian Small Cap FundClass A Units 20.04 19.96 11.61 11.45Class F Units 19.70 19.62 – –Class I Units 21.89 21.81 12.67 12.50

Scotia Resource FundClass A Units 21.20 21.12 12.87 12.81Class I Units 21.30 21.22 – –

Scotia North American Equity FundManager Class Units 9.25 9.24 7.93 7.91

Scotia Cyclical Opportunities FundManager Class Units 10.74 10.73 10.47 10.45

Scotia U.S. Equity FundClass I Units 7.62 7.62 – –Manager Class Units 7.62 7.62 7.82 7.80

Scotia U.S. Growth FundClass A Units 6.30 6.30 6.55 6.53Class F Units 6.45 6.45 6.65 6.63

Scotia U.S. Value FundClass A Units 6.41 6.40 5.91 5.89Class I Units 6.78 6.78 6.15 6.13

228

FundNet Asset Value




Per Unit ($)

2009 2008

Scotia International Equity FundManager Class Units 8.01 8.01 7.22 7.22

Scotia International Value FundClass A Units 5.98 5.98 5.03 5.03Advisor Class Units 5.81 5.81 4.98 4.98Class I Units 5.99 5.99 5.07 5.06

Scotia European FundClass A Units 8.43 8.43 7.74 7.74Class I Units 8.36 8.36 7.63 7.63

Scotia Pacific Rim FundClass A Units 10.87 10.87 9.26 9.26Class I Units 11.98 11.98 10.04 10.04

Scotia Latin American FundClass A Units 29.12 29.01 16.82 16.80Class F Units 29.55 29.43 16.98 16.96Class I Units 30.24 30.13 17.20 17.18

Scotia Global Growth FundClass A Units 27.36 27.36 22.28 22.25Advisor Class Units 27.36 27.36 22.28 22.25Class I Units 28.11 28.10 22.96 22.92

Scotia Global Small Cap FundClass A Units 5.85 5.84 5.41 5.37Class I Units 5.91 5.90 5.50 5.45

Scotia Global Opportunities FundClass A Units 7.40 7.39 6.05 6.00Advisor Class Units 7.19 7.18 5.89 5.83Class F Units 7.23 7.22 6.20 6.14Class I Units 7.44 7.43 6.12 6.06

Scotia Global Climate Change FundClass A Units 7.38 7.37 6.83 6.81Advisor Class Units 7.38 7.37 6.83 6.81Class I Units 7.42 7.41 – –

Scotia Canadian Bond Index FundClass A Units 10.84 10.83 10.81 10.80Class F Units 10.86 10.85 10.84 10.83Class I Units 10.81 10.79 10.80 10.79

Scotia Canadian Index FundClass A Units 20.03 19.98 15.16 15.11Class F Units 19.92 19.87 14.95 14.90Class I Units 19.66 19.61 14.91 14.86

Scotia U.S. Index FundClass A Units 10.70 10.69 10.02 9.99Class I Units 10.71 10.71 10.05 10.03

Scotia CanAm Index FundClass A Units 7.02 7.02 6.51 6.45Class F Units 7.10 7.10 6.55 6.48

Scotia Nasdaq Index FundClass A Units 4.38 4.38 3.32 3.28Class F Units – – 3.45 3.42

Scotia International Index FundClass A Units 6.85 6.85 6.21 6.19Class F Units 6.87 6.86 6.20 6.18Class I Units 7.20 7.20 6.48 6.46

11. Future accounting changes

The Canadian Accounting Standards Board has confirmedthat effective January 1, 2011, IFRS will replace currentCanadian standards and interpretations as Canadian GAAPfor publicly accountable enterprises, which includes invest-ment funds. The Manager has commenced development ofa changeover plan to meet the implementation date. Thekey elements of the plan will include identifying differ-ences between the Fund’s current accounting policies andthose it expects to apply under IFRS, as well as anyaccounting policy and implementation decisions and their

resulting impact, if any, on the Net Assets or Net AssetValue of the Funds. A disclosure of the qualitative andquantitative impact will be presented in the annual finan-cial statements ending December 31, 2010. The Managerdoes not expect that there will be a significant impact tothe Funds’ Net Asset Value as a result of the changeoverto IFRS. The Manager expects the changes to be limited topresentation and disclosures relating to fund consolida-tions, classification of puttables, and additional note disclo-sures. However, the Manager’s current assessment may

229

change if new standards are issued or if interpretations ofexisting standards are revised.

12. Comparative figures

Certain prior period comparative amounts have beenrestated to conform to the current period’s presentation.

230

The accompanying financial statements have been prepared by the managerand approved by the Board of Directors of Scotia Asset Management G.P. Inc.,as general partner for and on behalf of Scotia Asset Management L.P., themanager of the Funds. Management is responsible for the information andrepresentations made in these financial statements.

Scotia Asset Management L.P. maintains appropriate processes to ensure thataccurate, relevant and reliable financial information is produced. The financialstatements have been produced in accordance with Canadian generallyaccepted accounting principles and include certain amounts based on esti-mates and assumptions made by Scotia Asset Management L.P. The significantaccounting policies which Scotia Asset Management L.P. believes are appropri-ate for the Funds are described in Note 2 to the financial statements.

Ernst & Young LLP and Gaviller & Company LLP are the external auditors ofthe Funds. They have audited the financial statements in accordance withCanadian generally accepted auditing standards to enable them to expresstheir opinion on the financial statements. Their report is set out on page 232.

Walter PavanChief Financial OfficerScotia Asset Management L.P.

February 5, 2010

231

Management’sResponsibilityForFinancialReporting

Auditors’ Report

To the Unitholders of:1. Scotia T-Bill Fund2. Scotia Premium T-Bill Fund3. Scotia Money Market Fund4. Scotia U.S. $ Money Market Fund5. Scotia Short-Mid Government Bond Fund

(formerly, Scotia Cassels Short-Mid Government BondFund)

6. Scotia Mortgage Income Fund7. Scotia Bond Fund8. Scotia Canadian Corporate Bond Fund

(formerly, Scotia Cassels Canadian CorporateBond Fund)

9. Scotia U.S. $ Bond Fund10. Scotia Advantaged Income Fund

(formerly, Scotia Cassels Advantaged Income Fund)11. Scotia Diversified Monthly Income Fund12. Scotia Canadian Tactical Asset Allocation Fund13. Scotia Canadian Blue Chip Fund14. Scotia Canadian Equity Fund

(formerly, Scotia Cassels Canadian Equity Fund)15. Scotia Canadian Growth Fund16. Scotia Resource Fund17. Scotia North American Equity Fund

(formerly, Scotia Cassels North American Equity Fund)18. Scotia Cyclical Opportunities Fund

(formerly, Scotia Cassels Cyclical Opportunities Fund)19. Scotia U.S. Equity Fund

(formerly, Scotia Cassels U.S. Equity Fund)20. Scotia U.S. Growth Fund21. Scotia U.S. Value Fund22. Scotia International Equity Fund

(formerly, Scotia Cassels International Equity Fund)23. Scotia International Value Fund24. Scotia European Fund25. Scotia Pacific Rim Fund26. Scotia Latin American Fund27. Scotia Global Growth Fund28. Scotia Global Small Cap Fund29. Scotia Global Opportunities Fund30. Scotia Global Climate Change Fund31. Scotia Canadian Bond Index Fund32. Scotia CanAm» Index Fund33. Scotia Nasdaq Index Fund34. Scotia International Index Fund35. Scotia Selected Income & Modest Growth Portfolio36. Scotia Selected Balanced Income & Growth Portfolio37. Scotia Selected Moderate Growth Portfolio38. Scotia Selected Aggressive Growth Portfolio39. Scotia Partners Income & Modest Growth Portfolio40. Scotia Partners Balanced Income & Growth Portfolio41. Scotia Partners Moderate Growth Portfolio42. Scotia Partners Aggressive Growth Portfolio43. Scotia Vision Conservative 2010 Portfolio

44. Scotia Vision Aggressive 2010 Portfolio45. Scotia Vision Conservative 2015 Portfolio46. Scotia Vision Aggressive 2015 Portfolio47. Scotia Vision Conservative 2020 Portfolio48. Scotia Vision Aggressive 2020 Portfolio49. Scotia Vision Conservative 2030 Portfolio50. Scotia Vision Aggressive 2030 Portfolio51. Scotia INNOVA Income Portfolio52. Scotia INNOVA Balanced Income Portfolio53. Scotia INNOVA Balanced Growth Portfolio54. Scotia INNOVA Growth Portfolio55. Scotia INNOVA Maximum Growth Portfolio56. Scotia Canadian Income Fund57. Scotia Global Bond Fund58. Scotia Canadian Balanced Fund59. Scotia Canadian Dividend Fund60. Scotia Canadian Small Cap Fund61. Scotia Canadian Index Fund62. Scotia U.S. Index Fund(Collectively referred to as “ScotiaFunds”.)

We have audited the statement of net assets of each of theScotiaFunds as at December 31, 2009 and 2008, the statementof investment portfolio as at December 31, 2009, and thestatements of operations and changes in net assets for theperiods ended December 31, 2009 and 2008 as indicated innote 1. These financial statements are the responsibility ofScotiaFunds’ management. Our responsibility is to express anopinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generallyaccepted auditing standards. Those standards require that weplan and perform an audit to obtain reasonable assurancewhether these financial statements are free of material mis-statements. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the finan-cial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by theScotiaFunds’ management, as well as evaluating the overallfinancial statement presentation.

In our opinion, these financial statements present fairly, in allmaterial respects, the net assets of each of the ScotiaFunds asat December 31, 2009 and 2008, the investment portfolio as atDecember 31, 2009, and the results of their operations and thechanges in their net assets for the periods ended December 31,2009 and 2008 as indcated in note 1, in accordance withCanadian generally accepted accounting principles.

Ernst & Young LLPChartered AccountantsLicensed Public Accountantsas to Funds (1) to (55)

Gaviller & Company LLPChartered AccountantsLicensed Public Accountantsas to Funds (56) to (62)

Toronto, Canada,February 5, 2010.

232

9471316 (03/10)

F O R M O R E I N F O R M A T I O N A B O U T

ScotiaFunds™

please cal l

1 800 268-9269 (English) 1 800 387-5004 (French)

scotiafunds.com or visit any branch of Scotiabank,

Scotiatrust or ScotiaMcLeod.

® Registered trade-mark of The Bank of Nova Scotia, used under licence.

™ Trade-mark of The Bank of Nova Scotia, used under licence.

The ScotiaFunds are managed by Scotia Asset Management L.P. Scotia Securities Inc. and Scotia Captial Inc. are corporate entities separate from, although wholly-owned by, The Bank of Nova Scotia. ScotiaMcLeod and ScotiaMcLeod Direct Investing and Scotia iTRADE are divisions of Scotia Capital Inc. Member CIPF.

“Standard & Poor’s®”, “S&P®”, and “S&P 500” are trademarks of The McGraw-Hill Companies and have been licensed for use by The Bank of Nova Scotia and its subsidiary companies. “TSX” is a trademark of The Toronto Stock Exchange and has been licensed for use by The Bank of Nova Scotia and its subsidiary companies. The Nasdaq 100 Index is published by the Nasdaq Stock Market, Inc. The Nasdaq Stock Market, Inc. has no connection with Scotia Securities Inc. and has not passed upon the merits of investing in the Scotia Mutual Funds.

December 31, 2009

Investing for the long termScotiaFunds Annual Reportto Unitholders

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