OCT 18 2010 – BCV Recent Trading Activity

BCV Asset Management has recently sent us a detailed description of several trades that have been executed in certain client accounts. These changes go a long way to helping you understand the specifics of your portfolio, but also the investment strategy of BCV in general.

“Tax Loss Trades on Manulife Financial Corporation and Husky Energy Inc.:

1. We have realized losses on Manulife Financial Corporation (MFC CN) and Husky Energy Inc. (HSE CN), two companies which have performed poorly over the preceding year, in late September. These transactions were made in taxable accounts in order to realize a capital loss that can be used by investors to offset future capital gains. Many client portfolios realized capital gains on the sale of BCE Inc. and Enbridge Inc. earlier this quarter, so this impact will help to reduce capital gain taxes payable for this year.

2. We expect that we will repurchase shares of Manulife Financial Corporation after the 30 day waiting period passes, but we do not expect to repurchase shares of Husky Energy Inc. in the immediate future.

We made a decision to sell BCE Inc. (BCE CN) from client portfolios because it is our view that increasing competition in the wireless telecommunications market inevitably leads to lower profit margins across the entire industry. BCE is faced with serious competition in one of their largest markets (Quebec) from Videotron Inc., a well-financed new entrant, and in other major urban markets from the many new entrants, including Wind, Mobilicity, and Public Mobile. We believe that BCE will face a difficult environment to increase sales and we expect margins to fall. While it may be possible to reduce costs to maintain margins, many of the easiest cost reductions have been implemented since CEO George Cope arrived at BCE in 2008. Following the sale of our client positions, BCE has announced a consolidation strategy in which it will own the CTV television network, believing that content delivery will be an important differentiator in the wireless industry. We prefer to have less exposure to companies in the wireless industry as these changes unfold.

We also made a decision to sell Enbridge Inc. (ENB CN) because we believed that the company was fully-valued at the time of sale. The business prospects for Enbridge remain quite good, as oil production grows in Alberta and demand for outgoing pipeline capacity grows along with it. With shares of Enbridge trading near the high end of its historic price to earnings and price to cash flow ratios, we considered the company to be fully valued and we believed this was a prudent opportunity to sell the position. We did not consider the oil spill in Michigan to be a factor in our decision to sell shares of Enbridge. We continue to like companies in the pipeline and utility sectors and we continue to hold shares of TransCanada Pipelines Ltd. and Fortis Inc. for most client portfolios.

Teva Pharmaceutical Industries Inc. (TEVA US) is one of the largest generic drug manufacturers in the world. Teva, with a market capitalization of almost 50 billion dollars, has a long and consistent track record of increasing sales and earnings, with sales of just under 3.8 billion dollars and earnings of 800 million dollars in the most recent quarter. Teva is more than a generic drug manufacturer, having a branded pharmaceutical division accounting for approximately 20 percent of all sales. The company produces the top selling Multiple Sclerosis drug, Copaxone, and has a research and development division that is focused on the next generation of branded pharmaceuticals. We believe that the main generic drug manufacturing business is well-positioned because of the numerous patented drugs that have reached or are reaching their patent expiry date. We also believe Teva will continue to grow as a company, both organically and through acquisitions, while maintaining its financial strength, profitability, and dividend. We observed a buying opportunity for Teva in late August as the market overplayed the impact of margin compression caused by pressures from government health plans to reduce drug expenses. We believe that Teva is likely to continue to grow substantially and is considerably undervalued in the marketplace when trading at 10 times earnings, particularly because we expect earnings to continue to grow.

Medtronic Inc. (MDT US) is a leading company in the medical device industry, producing products for cardiac rhythm management (pacemakers) and implants for spinal, vascular, neurological, and cardiac surgery. In the most recent fiscal year, Medtronic had sales of more than 15 billion dollars, with globally-diversified sales (over 40 percent from outside North America) and consistent profit margins. Medtronic is well-positioned for the future because of its existing product mix and its strong product pipeline and because of the medical needs of an increasingly-ageing population. We see the management team at Medtronic to be very growth-oriented and we cite the recent streamlining of its global sales force and the decision to consolidate manufacturing and research and development efforts to focus on their most high growth opportunities as examples of this focus on growth. We also saw a buying opportunity for Medtronic in late August, with the company trading at slightly less than 10 times forward earnings and providing a dividend yield of 2.7 percent.

In addition to being desirable investments in their own right, we also believe that the addition of Medtronic Inc. and Teva Pharmaceutical Industries Inc. will enhance the diversification of client portfolios.”

If you would like to discuss these changes in more details we would be happy to discuss how these changes reflect your investment needs. Alternatively, we can set up a video conference or personal meeting with BCV.

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