SIO Conference 2013

MARTIN GROSSKOPFVICE-PRESIDENT AND PORTFOLIO MANAGERDIRECTOR, SUSTAINABILITY RESEARCHACUITY INVESTMENT MANAGEMENT INC.June 2013

Income Inequality and the MarketIs there a cause for concern?

The land of “unequal opportunity?”

Source: BCA Research, as of May 31, 2013

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Norway

Denmark

Czech

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Finlan

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Rep

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Belgium

Austria

Sweden

Luxe

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Hunga

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any

Netherl

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Fran

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Korea

New Z

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Austra

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Greece

Spain

United

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United

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Mexico

Chile

OECD-34

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0

5

10

15

20

25

30

Gini coefficient ( )↗ S90/S10 income decile share (right scale)

Gin

i coe

ffici

ent

S90/S

10 income decile share

Considerable global variation

Notes: See notes to Figure 1. Information on data for Israel: http://dx.doi.org/10.1787/888932315602Source: OECD Income Distribution Database (www.oecd.org/social/income-distribution-database.htm)

Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010

More Context

Source: Martin H. Barnes, Chief Economist, BCA Research, Key Issues in the Economic and Financial Outlook, May 2012

0

0Market income inequality ( )↗ Disposable income inequality

Source: OECD Income Distribution Database (www.oecd.org/social/income-distribution-database.htm)

Negative impact of the financial crisis

Percentage point change in the Gini coefficient of household market and disposable incomes between 2007 and 2010

Positive effects of redistribution

Source: Barry Bannister, Economic Outlook, 2013

Negative impact of the financial crisis

Positive aspects of recovery

Source: Ned Davies, US Economic Outlook, June 13, 2013

Negative: wage growth at a 25yr low

Source: FactSet, Bureau of Labour Statistics, Macquarie Research, June 2013

Positive: Corporate Profit Margins & Unit Labour Costs (ULC)

Source: Ned Davis Research, 2012

Positive: S&P Stock Index & Non-farm Unit Labour Cost (ULC)

Source: Ned Davis Research, 2012

Going forward: factors of production respond differently

• In 3 deepest recession since 1970 one factor always lagged

Source: Barry Bannister, Economic Outlook, 2013

Going forward: offshore unit labour benefit is dissipating

Source: BCA Research, as of December 31, 2012

Disclaimer

The commentaries contained herein are provided as a general source of information based on information available as of June 13, 2013 and should not be considered as personal investment advice or an offer or solicitation to buy and / or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication, however accuracy cannot be guaranteed. Market conditions may change and the manager accepts no responsibility for individual investment decisions arising from the use or reliance on the information contained herein.Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated

The information contained in this commentary is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions.