Investments

The investment options offered under the Concordia Group RSP make it possible for you to design a balanced retirement investment portfolio. You may choose to invest your contributions in any one or a combination of the funds available to you.

There are 2 families of funds available to you:

• Guaranteed interest accounts; and
• Market-based funds.

How do they compare?

	Guaranteed interest accounts	Market-based funds
Risk	The guaranteed interest rate may not keep pace with inflation.	Performance fluctuates with market conditions and is not guaranteed.
Return	Guaranteed interest accounts provide stable returns over the short and long term.	Historically, market-based funds have provided higher returns than guaranteed investments over the long term.

With guaranteed interest accounts, your contributions earn a specified rate of interest that is determined on the date of your deposit. The interest rate you receive is guaranteed and applies for the whole of the term you select (1, 3 or 5 years). Each contribution you make buys its own account, at the interest rate in effect when Canada Life receives your contribution.

Interest compounds annually, meaning that the annual interest is reinvested for the balance of the term at the initial interest rate you received the day of your deposit.

Also, as each guaranteed interest account matures, it is automatically reinvested in a new guaranteed interest account of the same term, at the interest rate in effect on its maturity date. However, you may reinvest your maturing deposits in a different term, or select another investment option, by advising Canada Life.

Canada Life's market-based funds, called segregated funds, allow you to invest in a variety of stocks and bonds. When you invest in a market-based fund, your contributions are combined with those of other investors and managed by professional investment managers. Investing in a market-based fund means lower transaction costs, better investment choice and often less risk than if you were to invest in individual securities.

When you contribute to a market-based fund, you are buying a share of the value of the fund. Your share is measured in units. The value of each unit is equal to:

Returns from a market-based fund depend on the performance of the securities held in the fund. As the fund appreciates, so does the value of your investment, but if the fund's value drops, so does the value of your investment.

While it is important to understand that a market-based fund carries a risk, it is also important to understand the nature of the risk in both the short and long term.

The performance of the underlying investments in a fund can - and will - fluctuate. As a result, the overall value of the fund goes up and down. These fluctuations can pose a significant risk to those who invest for only a short period of time.

Your plan may include a variety of funds, each with different levels of risk and growth potential. A number of investment fund managers provide investment services to Canada Life's funds.

In all cases, the investment objective - to build value over the long term - is consistent with your need to build a growing retirement portfolio over time.

Market-based funds

Money market funds

Money market funds invest in a portfolio of Canadian Treasury bills, government bonds and other short-term investments. This type of fund will appeal to you if you are looking for flexibility and an investment that can provide you with short-term, but consistent, growth.

	Investment	Investment management fees
Money Market Fund (S29) SCM 91-day T-bill Total Return	Laketon	1.25%

Bond Funds

Bond funds invest in high-quality bonds issued by governments, corporations and world economic powers, such as the World Bank. Bond funds will appeal to you if you are seeking stability and moderate growth.

	Investment	Investment management fees
Global Bond Fund (S237) Bond Fund (S199) Indexed Canadian Bond Fund (S79) SCM Bond Universe Total Return	RT Capital Scheer Rowlett TDQC	1.50% 1.25% 1.05%

Balanced Funds

Balanced funds combine the qualities of both bond and equity funds. Balanced funds will appeal to you if you are seeking stable returns with the opportunity of generating both investment income and capital growth over the long term.

	Investment	Investment management fees
Balanced Fund (S110) Diversified Fund (S235) Balanced Fund (S610) Balanced Benchmark*	McLean Budden Placements TR RT Capital	1.25% 1.25% 1.25%
* 45% SCM Universe, 35% TSE 300 TR, 15% MSCI World, 5% SCM 91 T-bill

Canadian Equity Funds

Canadian equity funds are funds that invest primarily in Canadian companies whose stock show growth potential. A small percentage of these funds could also be invested in foreign stocks to provide you with maximum opportunities for capital growth. This type of fund may appeal to you if you can wait out short-term market fluctuations in return for capital growth over the long term. Historically, equity investment returns have fluctuated from year to year, but have outperformed guaranteed investments over the long term.

	Investment	Investment management fees
Canadian Equity Fund (S232) Canadian Small Cap Equity Fund (S204) Canadian Equity Fund (S234) Canadian Equity Fund (S202) TSE 300 Total Return	Jarislowsky Fraser Montrusco Bolton RT Capital Scheer Rowlett	1.25% 1.25% 1.25% 1.25%

Foreign Equity Funds

Foreign equity funds invest in the stocks of U.S. and international corporations. Some of these funds can be diversified geographically, or can be specialized in a given country or region. This type of fund will appeal to you if you can afford to ride out short-term market fluctuations in return for larger capital growth over the long term.

U.S. Equity Funds

	Investment	Investment management fees
Indexed U.S. Equity Fund (S119) U.S. Equity Funds (S221) S&P 500 Index	TDQC Scheer Rowlett	1.05% 1.50%

Global Equity Funds

	Investment	Investment management fees
Global Equity Fund (S111) Morgan Stanley World Index	McLean Budden	1.50%

International Equity Funds

	Investment	Investment management fees
International Equity Fund (S118) Morgan Stanley EAFE Index	Templeton	1.95%

For details on each fund, refer to the Fund Documents at Canada Life's on-line Document Centre.

When investing in foreign funds, there are 3 important items to consider:

• Government limit on your plan's foreign content
• The value of the Canadian dollar
• Political and economic factors

Government limit on your plan's foreign content

The government limits how much of your plan you may invest outside of Canada. Currently, the limit is 30% of the book value of your plan assets.

The value of the Canadian dollar

The investments you make in foreign market-based funds are converted into the foreign currencies used in the countries in which the fund invests. When the fund's value is calculated, the value of the fund's assets are translated into Canadian dollar equivalents. For this reason, foreign exchange rates are directly related to the value of your investment in a foreign fund.

Should the Canadian dollar rise against the value of foreign currency, the value of a foreign fund may drop, causing your unit value to drop as well. If the value of the Canadian dollar weakens in comparison to a foreign currency, a foreign fund's value may rise, causing your unit value to rise. As exchange rates fluctuate constantly, they can add considerable short- and long-term volatility to the portfolio of a foreign fund and, ultimately, your investment in that fund.

Political and economic factors

Foreign stock prices are not only affected by changes in local economic cycles, but also by political, economic and social events. Developments of great magnitude like the devaluation of the Mexican peso can influence the stock markets of many countries. Political turmoil and social change can greatly affect the value of investments in underdeveloped countries.

At anytime, you may:

• change the percentage of contributions allocated to each fund; or
• transfer amounts from one fund to another.

To make a change or transfer, complete the Change of Investment form or call the Customer Care Centre at 1-800-387-2679.

You may withdraw funds at anytime by completing the Request for withdrawal form or by calling the Customer Care Centre at 1-800-387-2679.

A withdrawal fee of $35 will apply.

Cash withdrawals are subject to income tax.

You may transfer funds to another financial institution by completing the other institution's transfer form.