Excel Income and Growth Fund Commentary

As of November 30, 2011

During the month of November, the MSCI World Index returned -0.1% in Canadian dollar terms and the S&P 500 returned 2.2% in Canadian dollar terms. The blended benchmark of 2/3 MSCI World Index and 1/3 Barclays Capital Global Aggregate Bond Index returned 0.3% for the month of November.  The Fund paid a monthly distribution of $0.033 per unit.

Market Synopsis
Global equity markets continue to be weighed down by uncertainty, as talks continue in Europe on how best to resolve the debt crisis that is threatening the eurozone with ramifications for the broader global economy.  In this environment, it is not surprising to see investors in a “risk-off” mood.  On the heels of the recent downgrade of the US AAA sovereign debt rating, the rating agencies cautioned that the ratings of as many as 15 European countries are being reviewed with a “negative outlook”.  Among all this gloom and doom outlook, it is easy for investors to lose sight of the longer-term picture; emerging economies have a rising middle class that is rapidly urbanizing and entering its prime earning and consuming years.  This will have profound and positive ramifications for economies and companies that can sell to this rising global middle class.

Fund Positioning
During the month of November, the Fund initiated new positions in CIBC and Anvil Mining. 

Market & Fund Outlook
Global equity markets continue to show high levels of volatility, as the ongoing sovereign debt crisis in Europe continues; investors are hoping that, finally, a resolution may be reached by policy makers.   Even if a consensus among policy-makers is reached soon, the recent weakness in equity markets has lasted longer and has been more volatile than originally anticipated.   However, we still believe that the economy will recover, albeit at a slower pace, and there is a sizeable opportunity to be had in stocks with cyclical exposure. We continue to be cautious around market volatility.  We continue to focus on high-quality companies with strong management teams and positive growth profiles.

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