Experience. Intelligent Investing.

A P R I L 2 0 1 5
The Exemplar Canadian Focus Portfolio was slightly down at
-1.61% for the month of April, but remains positive YTD at
3.41%.
Investors are confused. Has the US currency peaked and the
oil price bottomed? Do higher energy prices lead to rising
inflation in North America while the rest of the world worries
about deflation? What to make of the atrocious first Quarter
GDP reports in the U.S. and Canada? There were several
transitory issues, such as the unseasonably cold weather in
the Northeast and labor disputes at western ports. Falling
energy prices reduced capital spending, while the strong
currency hurt U.S. exports. The most troubling question is
why did U.S. consumers save the oil-price windfall rather than
spending it? Will trends improve in the second quarter or
second half of the year?

EXEMPLAR CANADIAN FOCUS PORTFOLIO

while hoping I will not need them.
For now, I have eliminated the little exposure to the Alberta
economy I had left in the portfolios. Goodbye AutoCanada (a
little late, I know). I have added to the PrarieSky position on
weakness, and sold Badger into recent strength.
Worried about a summer correction, I have been paying
more attention to shorting opportunities. Some of the more
successful recent short trades have been: BNS, FTT, WJA and
HSY(U.S.).
Thank you for your continued interest in the Fund. For further
information, please contact your regional Arrow Capital
Management representative.
Sincerely,

There is no question that equity valuations are expensive, but

if interest rates are about to lift, what alternatives do investors
have? Will all this uncertainty result in a summer correction or
just a market rotation?

Veronika Hirsch
Portfolio Manager
Arrow Capital Management Inc.

In Canada, investment decisions became even more

problematic as a result of the NDP victory in the Alberta
election. An untested new government will inevitably create
confusion and policy uncertainty. Investors HATE uncertainty!
If energy prices continue to climb off the bottom, CAD
will mirror this move. Canadian energy stocks should thus
outperform U.S. energy stocks (denominated in a weakening
currency). How do investors participate in Canadian energy
stocks while avoiding Alberta? There are of course energy
companies with assets outside of Alberta, but the choices are
mostly limited to smaller-caps. Because of the small size of
the portfolios I manage, that will be one problem I will NOT
face.
The Alberta election has been useful in teaching me a
valuable lesson for the October Federal election - to pay
much closer attention to POLLS! I have already begun to
formulate shorting strategies ahead of the Federal election,

Unless otherwise stipulated Exemplar Portfolio returns are net of all fees, in Canadian dollars, reflect class F shares and assume
reinvestment of all distributions. Commissions, trailing commissions, management fees and expenses all may be associated with
Exemplar Portfolio investments. Please read the full prospectus before investing. Except as otherwise noted the indicated rates
of return are the historical annual compounded total returns including changes in share or unit value and the reinvestment of
all dividends or distributions and do not take into account the sales, redemption, distribution, or optional charges or income tax
payable by the unitholder or shareholder that would have reduced returns. Exemplar Portfolios are not insured or guaranteed by
Canada Deposit Insurance Corporation (CDIC) or any other insurer. Exemplar Portfolios are subject to risks of loss of capital and
income and their values change frequently. Past performance may not be repeated. Shares of the Portfolio are highly speculative
and involve a high degree of risk. You may lose a substantial portion or even all of the money you invest in a Portfolio.
36 Toronto Street, Suite 750 Toronto, Ontario Canada M5C 2C5 Tel: 416.323.0477 Tel: 1.877.327.6048 Fax: 416.323.3199 www.arrow-capital.com

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