A Comment -- General Comments From an Expert (A Commentary)

Hedge Funds: Are they riskier than mutual funds? No. Not if you use conservative strategies. You have to understand what you are getting into. You need to put up $25,000 per strategy.

Performance Expectation of Hedge Funds: 2011 was a difficult stretch of time. The hedge fund world is a broad world. Some strategies don’t put capital protection foremost. Look at 2008 and 2011 and that gives you an idea what to expect in the future. In both cases you are either at 0 or close to it, while stocks dropped.

Alternative Investment Information: There are more and more resources available in Canada. Canada Hedge Watch periodical.

Ratings of Who Had the Best Returns: Canada Hedge Watch periodical.

Man GLG Emerging Markets Income Fund: Seeing opportunity in the bond market in this strategy. The developing world is paying a nice yield on their sovereign debt. Don’t go whole-heartedly into it.

ROI High Income Placement Fund: Invests in loans and mortgages in the private space. High quality loans to high quality borrowers. Never had a negative day. Banks aren’t interested in the actual projects, but the borrowers are fine.

SG Capital Cedar Street Fund LP: The proposition is that you have an agile, nimble strategy in poorly analyzed companies. Will turn over positions each quarter depending on announcements. Fund made 9%. No complications for Canadians investing in this US fund. Exempt of US$ risk.

Blackheath Futures Fund LP: Makes money in the back of emotions in the market. Agriculture and metals, bonds and energy. It follows trends as they form.

Fiera Market Neutral Fund: (Top Pick June 11/10, Down 6.5%)

Picton Mahoney Income Opportunities fund: (Top Pick June 11/10, Up 9.20%) Great long/short strategy working in global bond markets.

Spartan Multi Strategy Fund: (Top Pick June 11/10, Up 3.0%)

Markets. Very strong start, particularly in the US but not bad for Canada either. People are feeling a little bit, about Europe. Data coming out of US is not rosy but not bad. Big winners last year were the telcos, pipelines and utilities, the utility stocks and their now trading at multiples of earnings, which are very much at the high-end of their historic range. However, interest rates are going to stay low for 1.5-2 years so you can't leave too early but he is looking for other opportunities. With the Cdn$ near par he is looking south of the border also.

Sectors. He likes the banks, agriculture and oil sands. Oilsands particularly are very deeply undervalued. People are concerned about the political machinations in the US, environmental concerns in Canada as to whether pipelines will get built to the West or South. He believes the oil will come out of the ground and get refined somewhere. Fertilizer stocks are suffering from an oversupply in the good crops last year. This is a cyclical commodity but it will come back and in the meantime this is an opportunity to get them at good prices. Banks have got good dividend yields and are trading at a low multiple of earnings and it is underestimated how well they're going to do in this low interest rate environment.

(A Top Pick Feb 8/11. Up 14.3%.) 4.25% Canada Real Return Bonds due 12/01/21. Inflation protected.

Europe. He is currently buying in Europe. Moving forward, he suspects there might be better opportunities in Europe. Perhaps towards the end of the year might be a bit better to pick up new positions.