Here is a summary of the effect of Canadian federal income tax legislation on Acker Finley funds and unitholders. You are strongly encouraged to consult your tax advisor to determine the implications specific to your situation.

For Units in a Tax-Deferred Plan

If you hold your units in a tax-deferred plan such as a registered retirement savings plan, registered retirement income fund or deferred profit sharing plan, you do not have to pay taxes on distributions or on redeeming your units. Taxes will generally be payable when you take money out of the plan.

For Units outside a Tax-Deferred Plan

If you do not hold your units in a tax-deferred plan:

• You may have tax liabilities on distributions received from the fund, and on gains realized when redeeming your units.
• You must pay tax on distributions received during the year, even if they are reinvested in additional units of the fund.
• Dividends that the fund receives from Canadian corporations in which it invests and distributes to you are eligible for the federal dividend tax credit.
• If you receive any capital gains distributions from a fund, you must treat them as a capital gain subject to tax.
• You are taxed on capital gains realized when you redeem your units. A capital gain occurs when you redeem units at a price that is higher than your adjusted cost base. A capital loss occurs when you redeem units at a price that is lower than your adjusted cost base. Capital losses are generally deductible in calculating net capital gains, within limits prescribed by law.
• A simple way of calculating your adjusted cost base is to add together the cost of the units purchased and the amount of distributions received, and divide the total cost by the total number of units.
• If you purchase units just before a taxable distribution late in the calendar year, you will still have to pay tax on the distribution.
• A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the portfolio turnover rate in a year, the greater the chance that you will receive taxable capital gains in the year as a result of capital gains distributions by the fund.