The Performance page of each of our funds shows a graph of our actual returns compared to our backtest.

The following are our results month by month compared to our backtest.

Canadian Equity Fund
Sixteen Year Backtest: CAGR	Live Investing: January 1, 2007 through:	Resulting actual CAGR
29.61%	March ‘07	62.51%
29.61%	April ‘07	54.26%
29.61%	May ‘07	58.73%
29.61%	June ‘07	43.03%
29.61%	July ‘07	34.11%
29.61%	August ‘07	19.37%
29.61%	September ‘07	31.01%

Until the summer liquidity crisis, our US Model was approaching the performance of our backtest. It fell back during the summer but recovered nicely in September. We believe that, absent further crises, our US Fund will go back to its performance earlier in the year, tracking slightly below the backtest. Compared to the early years of the backtest, the US economy is facing some challenges and returns slightly below our backtest will probably continue for a while.

Our Canadian model significantly outperformed our own backtest, even with the summer turmoil in the markets. The Canadian economy is strong and performance in excess of our backtest is likely to continue.

We are aware that backtests have a terrible reputation. “I’ve never seen a fund achieve its backtest, ever,” is a comment we’ve heard repeatedly. Frankly, we are not surprised, but we believe our backtest is more likely to be predictive of future performance for two reasons:

1. Our model is based on easily-understood common-sense rules that we developed using the techniques of Behavioral Finance. We go for several weeks without a trade. At least in calm markets. Our investment philosophy and the resulting rules we use are as far from the bulk of quantitative funds as it is possible to be.
2. We work very hard to make sure our model is robust, tradable, and that our backtests simulate the real world as faithfully as technology allows. Just as an aircraft simulator does an excellent job of simulating the actual airplane, we believe our backtesting software accurately simulates the real trading environment.