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Quarterly commentary
Second quarter 2011

Trimark Resources Fund

June 2011 Investment philosophy Trimark Resources Fund invests primarily in Canadian companies involved in the natural resources industry that are trading at attractive prices relative to their historical earnings, cash flow and valuation. The portfolio management team looks for industry-leading businesses with strong management teams, sustainable cash flow and solid balance sheets. Norman MacDonald CFA Performance Summary

The Fund's Class A units declined 7.12% over the second quarter of 2011. This compares to a decline of 8.46% for the Fund's custom benchmark - a composite of the S&P/TSX Composite Index's energy and materials sectors, weighted in proportion to their representation within the Index

The Fund's relative outperformance was a function of stock selection, as the Fund's holdings in both the materials and energy sectors outperformed those of the benchmark over the quarter

Key contributors to performance

Tourmaline Oil Corp. was a top contributor to Fund performance over the quarter and posted a strong positive return. Tourmaline is a Canadian natural gas company with a seasoned management team. The company has an exceptional exploration portfolio that is starting to get recognized by the market

Antofagasta PLC's share price rose over the quarter, bouncing back from a prior widespread selloff of copper stocks. The company is a copper producer based in Chile that has excellent growth prospects and low current cash costs as a result of the region in which it operates. Antofagasta has a conservative balance sheet, an attractive dividend yield, and is the largest shareholder, which helps align management's interests with those of the company's shareholders

Key detractors from performance

Shares of Niko Resources Ltd., an offshore oil and gas company, declined on concerns related to a shortfall of gas production at the company's D6 block in offshore India, as well as some potential difficulties in meeting the company's required gas withdrawal rates. The portfolio manager still believes there is significant long-term potential for Niko's exploration assets and that the company is trading at a discounted valuation

Barrick Gold Corp.'s share price declined as a result of market concerns related to the company's $7.3 billion takeover bid for copper producer Equinox Minerals Limited. Investors are concerned about the possible increase in the company's debt burden to fund the acquisition and also that the acquisition of a copper producer indicates that Barrick's management has shifted its attention away from gold production. The portfolio manager believes Barrick is still predominately a gold company and that the company's share price remains attractively valued

Portfolio activity

Copper mining company Antofagasta was a recent new addition to the portfolio Marsulex Inc., Frontier Oil Corporation, Silver Wheaton Corp. and Cameco Corp. were all sold from the portfolio during the reporting period. Marsulex was acquired by Chemtrade Logistics Income Fund; Frontier Oil and Silver Wheaton were sold on valuation; and Cameco was sold to redeploy capital to what the portfolio manager believes are relatively more attractive investment opportunities


Oil prices declined over the second quarter, and the team believes oil & gas stocks are now even more attractively valued. Further, in the run-up in oil prices earlier in 2011, energy stocks did not appreciate at the 11/16/2011


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same rate as the price of crude. Oil stocks were discounting a lower price for oil than the current spot price at the end of the period

Natural gas prices have stabilized. The portfolio management team believes the window of opportunity to invest in natural gas stocks at bargain prices has closed, but that these stocks still represent good value. The portfolio manager is comfortable with the Fund's current weighting in oil & gas stocks (at approximately 38% of the portfolio)

Volatility in base metal and gold prices has provided the opportunity to buy high-quality mining names like Antofagasta and add to the portfolio manager's best ideas at what the team believes are attractive prices. As a result, the weighting of the portfolio's top 10 holdings increased over the quarter from approximately 35% to 39%

The Fund is positioned in a select group of high-quality resource companies that aren't overly leveraged, have strong existing asset bases and generate significant free cash flow. The Fund is well diversified across the resources sector, and does not make concentrated bets on any one commodity

Performance for Trimark Resources Fund, Series A, as of June 30, 2011, 1YR: 23.75%, 3YR: -0.08%, 5YR: 8.54%, 10YR: 15.85%. Performance of the blended S&P/TSX Materials and S&P/TSX Energy Index as of June 30, 2011, 1YR: 21.40%, 3YR: -3.62%, 5YR: 6.85%, 10YR: not available.

The above companies were selected for illustrative purposes only and are not intended to convey specific investment advice. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. The indicated rates of return are the historical annual compounded total returns, including changes in security values and reinvestment of all distributions, and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder, which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. Copies are available from your advisor or from Invesco Canada Ltd. The views expressed above are based on current market conditions and are subject to change without notice; they are not intended to convey specific investment advice. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. Invesco and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. Trimark and all associated trademarks are trademarks of Invesco Canada Ltd. Invesco Canada Ltd., 2011 11/16/2011