Global Portfolio November 15, 2007:

The equity markets globally have been extremely volatile as investors react to the seemingly never ending series of financial sector write offs and revelations about how wide spread the damage is. The global economy appears to be slowing as the engine of growth in the US has slowed. The bright spot continues to be Asia with China and India leading the way as their middle class grows and demands more selection. These countries also have a very different view on consuming which is quite new to this region. The personal savings rates are dramatically higher than in North America or Europe this is leading to an over heated equity market in China which restricts access to foreign markets by its citizens.

GDP growth in China has consistently been over 10% annually for the past five years and in some quarters it has been closer to 14%. India is not far behind with growth rates near 10% in some of the recent quarters. These growth rates are not sustainable over the long run but even if they fall by 50% they will still be much higher than those seen in established industrialized nations.

The strong Canadian dollar is creating an opportunity for Canadian investors to enter foreign markets with more purchasing power than any time in the past thirty years. The loonies rise over the past two years has reduced currency risk to the lowest level in decades. The combination of high growth rates and excellent exchange rates offers a unique set of parameters for off shore investing.

I still do not recommend investing directly in Chinese companies as that market is trading at very over valued levels due to the restrictions placed in access to foreign markets. The markets offering the least risk are those that supply the products and materials required to sustain the economic expansion taking place. Those include basic material such as copper, nickel, zinc and aluminum. The newly created middle class is starting to demand more variety in the types and quality of foods and that is leading to opportunities for equipment manufacturers and fertilizer companies as demand increases the pressure on supply. This region has a long history of using precious metals as a store house of wealth and that has created an increase in the demand for gold and silver which should continue for years in to the future.

The global portfolio tries to follow these themes and incorporates the basic views in the Asset Allocation model as well.

Global Portfolio November 15, 2007:

Original invested capital April 15, 2004: $100,252.00 CAN

ETF Profiles:

XIU:  S&P/TSX 60 Index Fund holds the 60 largest companies by market capitalization in Canada, all of the main sectors of the economy are represented. The unit pays an annual Dividend of $0.87 per unit, current yield is 1.65%. The units are very liquid there are currently 105 million outstanding.

XMA: Materials Sector Index Fund holds 60 companies in four main sectors Gold (45%), Basic Materials (39%), Metals & Minerals (10%) and Forestry (4.5%). The unit has a current dividend of 1% and the MER is only 0.55% of the net asset value.

XEG: Energy Index Fund holds 28 Canadian energy companies involved in the production, service and integrated sectors of the OIL& Gas sector. The unit pays a small annual dividend of $0.50 per unit, current yield is 0.89%.

XGD: Gold Index Fund holds 19 Canadian companies involved in Gold production. The unit is dominated by two companies Barrick Gold and Placer Dome which combined account for 48% of the units’ value.

IYW: ishares Dow Jones US Technology ETF, top ten holdings Apple, Cisco, Dell, Google, Hewlett Packard, IBM, Intel, Oracle, QUALCOMM.

IYE: ishares Dow Jones US Energy ETF, top ten holdings, Apache Energy, Baker Hughes, Chevron, ConocoPhillips, Devon Energy, Exxon Mobil, Marathon Oil, Occidental Petroleum, Valero Energy.

ILF: S&P Latin America 40 Index Fund holds a diversified portfolio of 40 large companies for the four largest economies in the region, Mexico, Brazil, Argentina and Chile.

EWJ: MSCI Japan Index Fund holds a corresponding position to the Index. Top ten holdings, Toyota, Canon, Takeda Pharmaceutical, Mitsubishi Financial, Honda Motor, Mizuho Financial, Sony, NTT DoCoMo, Matsushita Electric and Sumitomo Mitsui Financial.

EPP: MSCI Pacific Index Fund ex: Japan. Holds companies from Australia, Hong Kong, New Zealand and Singapore. Top ten holdings, BHP Billiton, National Bank of Australia, Commonwealth Bank of Australia, Australia & New Zealand Banking Corp, Westpac Banking Corp, Hutchison Whampoa, Westfield Group, Cheung Kong, Sun Hung Kai Properties and Woolworths.