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Palos Investment Funds

Mutual Fund

The Palos Equity Income Fund is a mutual fund sold by prospectus, available to all Canadian residents. This Fund attempts to mirror the investment strategies of our flagship fund, the Palos Income Fund L.P. This fund is eligible to be held in registered accounts such as RRSP or TFSA accounts.

Primary Objectives

Provide an attractive and steady stream of income

Deliver trading-enhanced returns

The Fund seeks to outperform the Toronto Stock Exchange (TSX) on a total return basis with less volatility (“beta”) than that of the TSX.

Investment Strategy

A long-bias, actively managed fund; invests in a core portfolio of select high-grade and undervalued low volatility dividend-paying securities

This Fund takes both long and short positions, engaging in trading strategies that aim to further enhance returns through pair trading, syndication trading, merger arbitrage, statistical pair trading and dividend capturing

Largely fundamental approach complimented with macro analysis

Core portfolio investment decisions are made by analysing a company’s past performance to understand what a security is intrinsically worth through proprietary free cash flow models

Decisions on selling a core portfolio security are based on a reverse engineering model that shows when the security’s market value has surpassed its sustainable intrinsic value

View this fund on globefund.com or on morningstar.ca

Quarterly Portfolio Disclosures:
Quarterly Portfolio Disclosure (as of March 31, 2011)
Quarterly Portfolio Disclosure (as of September 30, 2011)
Quarterly Portfolio Disclosure (as of December 31, 2011)

Management Reports of Fund Performance:
Interim Management Report of Fund Performance (for the interim period ending June 30, 2011)

Financial Statements:
Financial Statements of Palos Equity Income Fund for the years ending December 31, 2010 and 2009
Interim Financial Statements (for the six-month period ending June 30, 2011)

Information:
Fund Facts
Simplified Prospectus
Annual Information Form
Press Release - June 1, 2011
Material Change Report - July 15, 2011
Press Release - July 18, 2011
Press Release - July 28, 2011
Amended and Restated Trust Agreement (effective until August 31, 2011) Amended and Restated Trust Agreement (effective as of September 1, 2011)
Investment and Fund Management Agreement (effective until August 31, 2011)
Investment and Fund Management Agreement (effective as of September 1, 2011)
Visa (issed by the AMF on July 27,2011)
Proxy Voting Record

Please visit Sedar to view our additional documentation.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.