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## Annual Total Return 

## Annual Compound Returns 

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The following table shows the Fund’s historical annual compound return (net of expenses) for the periods ended December 31, 2010 as compared to the performance of the S&P/TSX 60 Index. 

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* From date of inception on October 27, 2006 

** The S&P/TSX 60 Index is a capitalization-weighted index based on 60 highly capitalized stocks for which options are listed. 

The equity performance benchmark shown here provides an approximate indication of how the Fund’s returns compare to a public market index for similar securities. It is important to note that the Fund is not managed in order to match or exceed this index; rather, its objectives are to pay out monthly dividends and return the original invested amount at the termination date. As a result, the Fund has, from time to time, maintained cash balances in an effort to provide greater net asset value stability and employs a covered option writing strategy to generate the distributions. 

The use of options may have the effect of limiting or reducing the total returns of the Fund, particularly in a rising market since the premiums associated with writing covered call options may be outweighed by the foregone opportunity of remaining fully invested in the securities comprising the portfolio. The Manager believes that in a flat or downward trending market, a portfolio that is subject to covered call option writing will generally provide higher relative returns and lower volatility than one on which no options are written. 

## Portfolio Manager Report 

The Canadian economy grew at a quick pace in the first half of 2010 but had slower gross domestic product growth in the third quarter of 1.0 percent. The Bank of Canada raised the benchmark overnight rate in June, July and September from the unusually low rate of 0.25 percent to 1.00 percent in quarter point increments. The Canadian currency has traded in a fairly narrow range for most of the year and the Canadian banks have used the stronger dollar to make inroads into the U.S. with the Bank of Montreal and The Toronto-Dominion Bank announcing acquisitions in December. 

The Fund invests primarily in a universe of fifteen specified stocks, with under or overweight allocations holding between 4 percent and 10 percent in each security. As the year progressed the Fund added weight in Energy and Utilities names, such as Enbridge Inc. and Canadian Utilities Ltd., while generally reducing weight in the Financials in the portfolio, such as Royal Bank of Canada and Canadian Imperial Bank of Commerce. For the second straight year, the best performing stock was Teck Resources Limited, up over 67 percent in 2010. The weakest performing stock was Manulife Financial Corporation (“MFC”). The Fund increased its holding in MFC above the 4 percent minimum following the price capitulation in the summer of 2010. While it has recovered somewhat, the stock is still well below pre-crisis levels. The Fund continues to hold an overweight position in this name due to its leverage to improving equity markets and rising interest rates. 

For the year ended December 31, 2010, the net asset value of the Fund based on closing prices was $7.63 per unit compared to the net asset value of $7.40 per unit at December 31, 2009 and distributions of $0.48 per unit were paid to unitholders during the year. The Fund’s units, listed on the Toronto Stock Exchange as CDD.UN, closed on December 31, 2010 at $7.15 per unit, which represents a 6.3 percent discount to the net asset value. 

