BOURSE SECURITIES LIMITED

Weekly Market Review

January 27th, 2011

USD Mutual Funds perform

The financial year 2010 held positive fortunes for the majority of locally-sponsored
mutual funds, with the international equity funds outperforming the regionally-focused
equity mutual funds. Accordingly, all but one of the US$ equity mutual funds appreciated
over the year, while very few regionally-invested funds posted negative returns. This
week we present a comparison of the performance of some of the major equity mutual
funds in 2010. Investors should note that no two funds are alike and within a region the
country mix may vary based on the investment strategy and chosen benchmark for each
fund.

TT$ Equity Mutual Funds

The TT Composite Index made a surprising rebound, increasing 9.19 per cent in 2010. In
Jamaica, the equity market showed improvement as the JSE Market Index in USD terms
grew 6.76 per cent for the year. Across in Barbados, the Barbados Composite Index
continued its downward trend, falling 14.12 per cent in 2010.

Results for the TT$ equity mutual funds examined at the end of the year were mixed.
Table 1 outlines the returns on these funds as at December 31st.

TABLE 1: TT$ EQUITY MUTUAL FUNDS

TT$ EQUITY FUNDS - CAPITAL GROWTH YTD RETURN
Republic Caribbean Equity Fund 7.17%
Savinvest Capital Growth Fund -0.12%
TT$ EQUITY FUNDS - INCOME & GROWTH YTD RETURN
AIC TT Income & Growth Fund 9.64%
Roytrin TT$ Income & Growth Fund 7.30%
FCB Immortelle Income & Growth Fund 4.20%
UTC TT$ Growth & Income Fund -1.55%
GAM Pan Caribbean Balanced Fund - Class A & B -1.64%
TT$ EQUITY FUNDS - GLOBAL YTD RETURN
AIC TT Global Equity Fund (Caribbean Equity Fund) 9.21%
Source: Mutual Fund Sponsors; Bourse

In the Capital Growth space, Republic’s Caribbean Equity Fund gained 7.17 per cent
while the Savinvest Capital Growth Fund declined 0.12 per cent.
In the Income and Growth fund category, AIC’s TT Income and Growth Fund had the
largest increase with a return of 9.64 per cent in 2010. Roytrin’s TT$ Income and Growth
Fund was up 7.30 per cent for 2010, while First Citizens’ Immortelle Income & Growth
Fund gained 4.20 per cent. UTC’s TT$ Income & Growth Fund was down 1.55 per cent
while GAM’s Pan Caribbean Balanced Fund Class A & B declined 1.64 per cent.

AIC’s TT Global Equity Fund appreciated 9.21 per cent for the year.

US$ Equity Mutual Funds

Table 2 shows the performance of an array of US$ Equity Mutual Funds categorized by
geographic focus and investment style.

TABLE 2: US$ EQUITY MUTUAL FUNDS

INCOME & GROWTH YTD RETURN
Roytrin US$ Income & Growth Fund 10.77%
GLOBAL YTD RETURN
GAM New Economy Equity Fund - Class A & B 3.38%
NORTH AMERICA YTD RETURN
GAM North American Equity Fund - Class A & B 12.41%
UTC North American Fund 5.38%
Savinvest US$ Capital Growth Fund 0.57%
EUROPE YTD RETURN
GAM European Equity Fund - Class A & B 1.24%
UTC European Fund -1.21%
LATIN AMERICA YTD RETURN
UTC Latin American Fund 5.34%
ASIA PACIFIC YTD RETURN
GAM Asia Pacific Rim Fund - Class A & B 10.67%
Savinvest India Asia Fund 10.20%
UTC Asia Pacific Fund 3.33%
BRIC YTD RETURN
GAM BRIC Equity Fund - Class A & B 6.19%
ENERGY YTD RETURN
UTC Energy Fund 6.98%

The only US$ Income and Growth fund, the Roytrin US$ Income and Growth Fund
gained 10.77 per cent in 2010.
GAM’s New Economy Equity Fund Class A & B gained 3.38 per cent in the same
period. Its benchmark, the S&P Global 100 Index was up 2.68 per cent for the period.

As US markets recovered with the benchmark S&P 500 Index rising 12.78 per cent, the
three locally sponsored North American Funds were all up for the year. GAM’s North
American Equity Fund gained 12.41 per cent while UTC North American Fund was up
5.38 per cent. The Savinvest US$ Capital Growth Fund ended the period with a gain of
0.57 per cent.

The MSCI Europe Index rose 8.04 per cent in 2010 as European equities responded to an
improving economic outlook. GAM’s European Equity Fund Class A & B appreciated
1.24 per cent for the year while UTC’s European Fund declined 1.21 per cent.

The Latin American market, as measured by the MSCI Latin America Index advanced
12.07 per cent. In the Latin American space, the UTC’s Latin American Fund had a
capital appreciation of 5.34 per cent.

Other emerging markets, such as Asian giants India, also experienced significant returns.
Asia’s regional benchmarks, the MSCI Asia ex Japan and the MSCI Pacific Indices rose
16.99 and 37.18 per cent respectively for the year. GAM’s Asia Pacific Rim Fund Class
A & B has a return of 10.67 per cent. For the same period, the Savinvest India Asia Fund
gained 10.20 per cent and UTC’s Asia Pacific Fund rose 3.33 per cent.

Brazil, Russia and India continued to outperform world markets, with the MSCI BRIC
Index gaining 7.25 per cent for 2010. GAM’s BRIC Equity Fund Class A & B posted a
return of 6.19 per cent for the year.

The sole local energy-related fund was able to benefit from recovering commodity prices
in 2010, the UTC’s Energy Fund appreciated 6.98 per cent at the end of the year.

Outlook

The local economy may be challenged going forward. Even though the equity market
gained 9.19 per cent in 2010, fundamentals suggest that the Index could decline in 2011.
Weak economic conditions both locally and regionally may limit growth in corporate
earnings.

On the international front, the key question for 2011 is whether there is enough growth in
the global economy to continue to smooth over the relative imbalance in growth amongst
the major regions. Analysts are relatively optimistic and looking for around 4 per cent
global GDP growth to drive double-digit earnings growth and similar upside for stocks.
European earnings are seen as a play on global growth and earnings growth of 14 per cent
is expected in European companies next year.
In the United States, according to a recent Bloomberg survey of 63 economists, the U.S
economy will grow by 2.5 per cent in 2011. Bloomberg estimates that earnings growth of
13 per cent for 2011.

According to the International Monetary Fund (IMF), Emerging and Developing

Economies will grow 6.4 per cent in 2011. By comparison, Advanced Economies are
anticipated to grow 2.2 per cent in 2011.In Asia, Morgan Stanley forecast the MSCI Asia
Pacific excluding Japan Index to climb 20 per cent by year’s end, while Deutsche Bank
sees the index rising 20-30 per cent for the year. It is expected that Asian stocks could
deliver superior returns in the midst of global economic recovery and strong earnings
growth.

Looking ahead, the domestic equity market is expected to be subdued and as such
investors may want to consider investments in the international markets, where the
outlook for economic growth and higher corporate earnings is likely.

Note: For the purpose of this article, the benchmarks used are indicative of the region
and may vary from the actual benchmarks used by the individual funds. The returns
were provided to us by the Mutual Fund providers or calculated from information
provided to us by these Mutual Fund providers.

This report is for informational purposes only and does not constitute an offer or solicitation to buy or sell
any securities discussed herein. The information and any data contained herein have been obtained from
financial data provided to us by the issuers of the subject securities. Investors wishing to purchase any of
the securities mentioned should consult an investment adviser. Projections and estimates are those of
Bourse Securities based on current available information.

E-Mail us at admin@boursefinancial.com or phone 628-6204/3982/9100