scotia private pools pinnacle portfolios annual report · 2017. 3. 13. · scotia private strategic...

Scotia Private Pools™and

Pinnacle PortfoliosAnnual ReportDecember 31, 2011

Money Market FundScotia Private Short Term Income Pool

Bond FundsScotia Private Income PoolScotia Private High Yield Income PoolScotia Private American Core-Plus Bond Pool

Balanced FundScotia Private Strategic Balanced Pool

Canadian Equity FundsScotia Private Canadian Value PoolScotia Private Canadian Mid Cap PoolScotia Private Canadian Growth PoolScotia Private Canadian Small Cap Pool

Foreign Equity FundsScotia Private U.S. Value PoolScotia Private U.S. Mid Cap Value PoolScotia Private U.S. Large Cap Growth PoolScotia Private U.S. Mid Cap Growth PoolScotia Private International Equity PoolScotia Private International Small to Mid Cap Value PoolScotia Private Emerging Markets PoolScotia Private Global Equity PoolScotia Private Global Real Estate Pool

Pinnacle PortfoliosPinnacle Balanced Income PortfolioPinnacle Conservative Balanced Growth PortfolioPinnacle Balanced Growth PortfolioPinnacle Conservative Growth PortfolioPinnacle Growth Portfolio

Financial Statements

Money Market Fund3 • Scotia Private Short Term Income Pool

Bond Funds6 • Scotia Private Income Pool10 • Scotia Private High Yield Income Pool14 • Scotia Private American Core-Plus Bond Pool

Balanced Fund24 • Scotia Private Strategic Balanced Pool

Canadian Equity Funds30 • Scotia Private Canadian Value Pool33 • Scotia Private Canadian Mid Cap Pool36 • Scotia Private Canadian Growth Pool39 • Scotia Private Canadian Small Cap Pool

Foreign Equity Funds42 • Scotia Private U.S. Value Pool45 • Scotia Private U.S. Mid Cap Value Pool48 • Scotia Private U.S. Large Cap Growth Pool52 • Scotia Private U.S. Mid Cap Growth Pool55 • Scotia Private International Equity Pool59 • Scotia Private International Small to Mid Cap Value Pool65 • Scotia Private Emerging Markets Pool69 • Scotia Private Global Equity Pool73 • Scotia Private Global Real Estate Pool

The Pinnacle Portfolios77 • Pinnacle Balanced Income Portfolio79 • Pinnacle Conservative Balanced Growth Portfolio81 • Pinnacle Balanced Growth Portfolio83 • Pinnacle Conservative Growth Portfolio85 • Pinnacle Growth Portfolio

87 Notes to the Financial Statements

98 Management’s Responsibility for Financial Reporting

99 Independent Auditors’ Report

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Scotia Private Short Term Income Pool(formerly, Pinnacle Short Term Income Fund)

STATEMENT OF NET ASSETSAs at December 31,

2011 2010

ASSETSInvestments at fair value $5,702,846 $10,597,859Cash 132,664 32,445Accrued investment income 558 2,350

5,836,068 10,632,654

LIABILITIESDistributions payable 92 26Redemptions payable – 50,278Accrued expenses – 38,679

92 88,983

Net Assets $5,835,976 $10,543,671

NET ASSETS PER SERIESPinnacle Series Units $5,826,022 $10,543,671Series F Units $ 9,954 $ –

UNITS OUTSTANDINGPinnacle Series Units 582,602 1,054,359Series F Units 995 –

NET ASSETS PER UNITPinnacle Series Units $ 10.00 $ 10.00Series F Units $ 10.00 $ –

STATEMENT OF OPERATIONSFor the period ended December 31,

2011 2010

INVESTMENT INCOMEInterest $ 87,545 $103,028Securities lending 7 7

87,552 103,035

EXPENSESManagement fees (note 5) 18 161Harmonized Sales Tax/Goods and Services Tax 6,776 1,944Audit fees 12,887 12,975Independent Review Committee fees 2,810 2,727Custodian fees 953 3,957Filing fees 19,365 17,812Legal fees 2,881 3,806Unitholder reporting costs 12,326 12,607Unitholder administration and service fees 53,352 41,542

111,368 97,531Absorbed expenses (72,225) (23,720)

39,143 73,811

Net investment income (loss) 48,409 29,224

Increase (decrease) in Net Assets from operations $ 48,409 $ 29,224

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 48,387 $ 29,130Series F Units* $ 22 $ 94

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ 0.07 $ 0.02Series F Units* $ 0.03 $ 0.02

STATEMENT OF CHANGES IN NET ASSETSFor the period ended December 31,

2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $10,543,671 $ 15,685,538Series F Units* – –

10,543,671 15,685,538

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 48,387 29,130Series F Units* 22 94

48,409 29,224

DISTRIBUTIONS TO UNITHOLDERSFrom net investment income

Pinnacle Series Units (48,390) (29,250)Series F Units (20) (94)

(48,410) (29,344)

UNIT TRANSACTIONSProceeds from issue

Pinnacle Series Units 3,309,963 21,616,933Series F Units* 10,544 118,985

Reinvested distributionsPinnacle Series Units 47,438 29,150Series F Units* 20 93

Payments on redemptionPinnacle Series Units (8,075,047) (26,787,830)Series F Units* (612) (119,078)

(4,707,694) (5,141,747)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (4,717,649) (5,141,867)Series F Units* 9,954 –

(4,707,695) (5,141,867)

NET ASSETS – END OF PERIODPinnacle Series Units 5,826,022 10,543,671Series F Units* 9,954 –

$ 5,835,976 $ 10,543,671

* Recommenced on July 21, 2011.

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Portfolio Advisor: GCIC Ltd.

The accompanying notes are an integral part of these financial statements.

STATEMENT OF INVESTMENT PORTFOLIOAs at December 31, 2011FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 97.7%Treasury Bills – 23.2%400,000 Province of New Brunswick

0.00% due Feb. 02, 2012 399,352 399,661420,000 Province of Ontario

1.02% due Apr. 25, 2012 417,887 418,646535,000 Province of Quebec

0.96% due Jan. 20, 2012 534,117 534,720

1,351,356 1,353,027

Promissory Notes – 23.0%100,000 Province of Prince Edward Island

0.00% due Mar. 19, 2012 99,753 99,792500,000 Province of Quebec

1.02% due Jan. 19, 2012 498,040 499,737745,000 Province of Saskatchewan

0.00% due Jan. 18, 2012 744,434 744,661

1,342,227 1,344,190

Bankers’ Acceptances – 0.9%55,000 Royal Bank of Canada

1.13% due Jan. 27, 2012 54,732 54,954

Commercial Paper – 10.8%130,000 Daimler Canada Finance Inc.

0.00% due Jan. 18, 2012 129,858 129,923150,000 Imperial Oil Limited

0.00% due Jan. 19, 2012 149,843 149,919100,000 Toyota Credit Canada Inc.

1.23% due May 4, 2012 99,437 99,581150,000 Volkswagen AG

1.21% due Jan. 24, 2012 149,555 149,881100,000 Woodbridge Finance Corporation

0.00% due Jan. 11, 2012 99,902 99,967

628,595 629,271

Short-Term Bonds – 39.8%300,000 Province of Alberta (Floating Rate)

1.26% due Jun. 1, 2014 299,841 300,142275,000 Bank of Montreal (Floating Rate)

1.63% due Dec. 10, 2012 275,000 275,222200,000 Caisse Centrale Desjardins (Floating Rate)

1.58% due Feb. 17, 2012 200,045 200,414275,000 Canadian Imperial Bank of Commerce (Floating Rate)

1.68% due Apr. 8, 2013 275,000 276,029170,000 Caterpillar Financial Services Limited

4.94% due Jun. 1, 2012 172,368 173,033100,000 GE Capital Canada Funding Company

4.38% due Sep. 28, 2012 102,000 103,118275,000 Master Credit Card Trust

5.30% due Aug. 21, 2012 281,865 287,050150,000 National Bank of Canada (Floating Rate)

1.35% due Oct. 10, 2012 150,000 150,109100,000 NAV Canada

3.43% due Apr. 17, 2012 100,602 101,296200,000 Royal Bank of Canada (Floating Rate)

1.53% due Sep. 26, 2013 200,000 200,017150,000 Toronto-Dominion Bank, The (Floating Rate)

1.32% due Sep. 19, 2012 150,000 150,053

FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS (cont’d)Short-Term Bonds (cont’d)100,000 Wells Fargo Financial Canada Corporation

6.05% due Aug. 27, 2012 102,866 104,921

2,309,587 2,321,404

TOTAL INVESTMENT PORTFOLIO 5,686,497 5,702,846

OTHER ASSETS, LESS LIABILITIES – 2.3% 133,130

NET ASSETS – 100.0% 5,835,976

SUMMARY OF INVESTMENT PORTFOLIO

Investment Category December 31, 2011 December 31, 2010

Percentage of Net Assets (%)

Promisory Notes 23.0 –Treasury Bills 23.2 47.6Bankers’ Acceptance 0.9 5.8Commercial Paper 10.8 5.2Deposit Notes – 3.8Short-Term Bonds 39.8 37.9

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Portfolio Advisor: GCIC Ltd.


Scotia Private Short Term Income Pool (Continued)(formerly, Pinnacle Short Term Income Fund)

SUPPLEMENTARY SCHEDULESAs at December 31, 2011 and 2010

Interest rate risk (note 3)

The table below summarizes the Fund’s exposure to interestrate risks by remaining term to maturity of the Fund’sportfolio of money market instruments.

Interest Rate Exposure* December 31, 2011 December 31, 2010

Less than 1 year $4,928,005 $ 9,595,889

1-3 years 774,841 1,001,970

3-5 years – –

5-10 years – –

H 10 years – –

Total $5,702,846 $10,597,859

* Excludes cash

Credit risk (note 3)

The table below summarizes the credit rating of the moneymarket instruments, excluding cash, held by the Fund.

Percentage ofTotal

Money MarketInstruments (%)

Percentage ofNet Assets (%)

Percentage ofTotal

Money MarketInstruments (%)


December 31, 2011 December 31, 2010

Short-Term Rating

R1 – High 16.7 16.3 17.4 17.5

R1 – Middle 36.0 35.1 36.2 36.3

R1 – Low 6.6 6.5 12.3 12.3

Bond Credit Rating

A– to AAA+ 40.7 39.8 34.1 34.2

B– to BBB+ – – – –

Unrated – – – –

Total 100.0 97.7 100.0 100.3

Liquidity risk (note 3)

The table below summarizes a maturity analysis of cash flowsassociated with the maturities of the Fund’s financialliabilities:

Less than 3 months Less than 3 months


Accounts payable and accrued liabilities $92 $88,983

Fair value classification (note 2)

The tables below illustrate the classification of the Fund’sfinancial instruments within the fair value hierarchy as atDecember 31, 2011 and 2010, respectively.

December 31, 2011

Level 1 Level 2 Level 3 Total

Money Market Instruments $ – $5,702,846 $ – $5,702,846

December 31, 2010


Money Market Instruments $ – $10,597,859 $ – $10,597,859

During the periods ended December 31, 2011 and 2010, therewere no transfers between Level 1 and Level 2.

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Scotia Private Short Term Income Pool (Continued)(formerly, Pinnacle Short Term Income Fund)


Scotia Private Income Pool(formerly, Pinnacle Income Fund)


2011 2010

ASSETSInvestments at fair value $301,695,774 $288,141,280Cash 65,711 24,913Accrued investment income 1,590,725 1,441,540Receivable for securities sold – 3,090,792Subscriptions receivable 722,750 416,284Accounts receivable – 2,090

304,074,960 293,116,899

LIABILITIESPayable for securities purchased 1,746,495 3,090,120Redemptions payable 180,017 645,148Accrued expenses 2,192 81,605

1,928,704 3,816,873

Net Assets $302,146,256 $289,300,026

NET ASSETS PER SERIESPinnacle Series Units $266,354,167 $256,203,771Series F Units $ 7,485,533 $ 1,714,436Series I Units $ 28,306,556 $ 31,381,819

UNITS OUTSTANDINGPinnacle Series Units 22,827,287 23,184,019Series F Units 622,113 149,919Series I Units 2,419,843 2,832,237

NET ASSETS PER UNITPinnacle Series Units $ 11.67 $ 11.05Series F Units $ 12.03 $ 11.44Series I Units $ 11.70 $ 11.08

STATEMENT OF OPERATIONSFor the periods ended December 31,

2011 2010

INVESTMENT INCOMEInterest $11,695,094 $11,810,006Securities lending 21,343 21,751Other income 5,549 –

11,721,986 11,831,757

EXPENSESManagement fees (note 5) 17,417 9,256Harmonized Sales Tax/Goods and Services Tax 23,389 10,263Audit fees 16,403 14,575Independent Review Committee fees 3,007 2,727Custodian fees 51,017 34,289Filing fees 16,689 16,442Legal fees 3,004 3,806Unitholder reporting costs 22,197 27,103Unitholder administration and service fees 118,482 115,445Overdraft charges 360 –


269,283 232,278

Net investment income (loss) 11,452,703 11,599,479

Net realized gain (loss) on investments sold 7,969,667 3,028,540Change in unrealized appreciation (depreciation) of investments 9,321,162 6,800,372

Net gain (loss) on investments 17,290,829 9,828,912

Increase (decrease) in Net Assets from operations $28,743,532 $21,428,391

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $25,479,832 $21,682,612Series F Units $ 219,661 $ 75,816Series I Units* $ 3,044,039 $ (330,037)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ 1.10 $ 0.83Series F Units $ 1.03 $ 0.65Series I Units* $ 1.13 $ (0.12)

STATEMENT OF CHANGES IN NET ASSETSFor the periods ended December 31,

2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $256,203,771 $ 284,824,352Series F Units 1,714,436 584,535Series I Units* 31,381,819 –

289,300,026 285,408,887

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 25,479,832 21,682,612Series F Units 219,661 75,816Series I Units* 3,044,039 (330,037)

28,743,532 21,428,391


Pinnacle Series Units (10,193,870) (11,257,570)Series F Units (108,804) (40,165)Series I Units* (1,201,057) (188,603)

From realized gainPinnacle Series Units (1,022,097) –Series F Units (27,745) –Series I Units* (108,780) –

(12,662,353) (11,486,338)


Pinnacle Series Units 44,691,034 57,213,240Series F Units 5,765,707 1,475,927Series I Units* 4,072,710 32,147,906

Reinvested distributionsPinnacle Series Units 11,120,755 11,155,940Series F Units 85,259 35,837Series I Units* 1,309,837 188,603

Payments on redemptionPinnacle Series Units (59,925,258) (107,414,803)Series F Units (162,981) (417,514)Series I Units* (10,192,012) (436,050)

(3,234,949) (6,050,914)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units 10,150,396 (28,620,581)Series F Units 5,771,097 1,129,901Series I Units* (3,075,263) 31,381,819

12,846,230 3,891,139

NET ASSETS – END OF PERIODPinnacle Series Units 266,354,167 256,203,771Series F Units 7,485,533 1,714,436Series I Units* 28,306,556 31,381,819

$302,146,256 $ 289,300,026

* Start date October 12, 2010.

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STATEMENT OF INVESTMENT PORTFOLIOAs at December 31, 2011FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS – 97.1%Federal Bonds – 29.4%

Government of Canada4,115,000 1.50% due Nov. 1, 2013 4,162,336 4,156,100

26,650,000 3.00% due Dec. 1, 2015 27,595,634 28,497,4698,872,000 2.00% due Jun. 1, 2016 8,801,881 9,157,4852,850,000 2.75% due Sep. 1, 2016 3,003,473 3,038,884

18,925,000 3.75% due Jun. 1, 2019 21,499,932 21,649,4652,645,000 3.25% due Jun. 1, 2021 2,953,354 2,940,191

14,846,000 4.00% due Jun. 1, 2041 19,344,081 19,487,787

87,360,691 88,927,381

Provincial Bonds – 10.5%Ontario School Boards Financing Corporation

1,270,000 5.70% due Oct. 11, 2017 1,370,330 1,500,4483,550,416 7.20% due Jun. 9, 2025 4,127,019 4,468,4541,271,799 5.90% due Oct. 11, 2027 1,285,364 1,526,947

Ontario Strategic Infrastructure Finance Authority1,690,000 4.60% due Jun. 1, 2015 1,751,685 1,851,683

Ornge Issuer Trust1,600,000 5.73% due Jun. 11, 2034 1,600,000 1,991,928

Province of New Brunswick2,267,189 6.47% due Nov. 30, 2027 2,279,717 2,839,644

Province of Quebec8,970,000 4.25% due Dec. 1, 2021 9,698,633 9,973,8225,967,000 5.00% due Dec. 1, 2041 6,914,568 7,589,120

29,027,316 31,742,046

Municipal Bonds – 0.8%Toronto Hospital

868,178 5.64% due Dec. 8, 2022 854,407 996,186York Region District School Board

1,000,000 6.55% due Apr. 12, 2023 995,850 1,283,158

1,850,257 2,279,344

Mortgage-Backed Securities – 8.6%Canadian Capital Auto Receivables

94,933 2.00% due Nov. 17, 2012 94,933 94,994First CMBS Issuer Corporation

900,000 5.67% due Nov. 15, 2013 917,796 953,707Merrill Lynch Financial Assets Inc.

2,199,048 5.06% due May 12, 2012 2,153,407 2,217,7191,944,639 5.74% due Nov. 12, 2012 1,987,571 1,984,2561,007,233 4.68% due Aug. 12, 2015 955,159 1,034,6312,600,000 4.83% due Feb. 12, 2039 2,287,844 2,786,6891,896,347 4.64% due Oct. 12, 2016 1,755,353 2,041,4807,550,000 4.71% due Nov. 12, 2016 7,023,882 7,743,226

900,000 4.88% due Apr. 12, 2017 824,400 968,9912,547,575 6.67% due May 7, 2021 2,669,169 2,655,933

694,691 7.37% due May 10, 2022 780,625 784,949Merrill Lynch Financial Assets Inc. (callable)

200,000 7.77% due Aug. 5, 2021 (Sep. 5, 2021) 199,998 218,151Real Estate Asset Liquidity Trust

683,460 4.71% due Mar. 12, 2038 662,149 721,6051,597,512 4.45% due Dec. 12, 2038 1,468,961 1,668,153

23,781,247 25,874,484

Corporate Bonds – 47.8%407 International Inc.

1,850,000 5.96% due Dec. 3, 2035 2,025,715 2,342,372Alliance Pipeline LP

238,004 5.55% due Dec. 31, 2023 238,004 266,6891,097,848 7.22% due Dec. 31, 2025 1,097,849 1,366,384


AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)Corporate Bonds (cont’d)

Bank of Montreal1,605,000 3.98% due Jul. 8, 2016 1,659,230 1,663,5152,475,000 2.96% due Aug. 2, 2016 2,491,583 2,523,1072,950,000 4.61% due Sep. 10, 2025 3,055,669 3,251,526

Bayerische Motoren Werke AG1,700,000 3.22% due Mar. 28, 2013 1,699,813 1,722,958

Blue Water Bridge Authority480,619 6.41% due Jul. 9, 2027 480,619 541,655

British Columbia Ferry Services Inc.1,100,000 5.02% due Mar. 20, 2037 1,100,000 1,198,588

Canadian Imperial Bank of Commerce3,500,000 3.10% due Mar. 2, 2015 3,493,420 3,613,1824,450,000 3.15% due Nov. 2, 2020 4,440,611 4,472,360

Consumers Waterheater Operating Trust4,000,000 5.25% due Mar. 15, 2013 4,000,160 4,089,558

CU Inc.1,600,000 4.54% due Oct. 24, 2041 1,600,000 1,731,679

Electricity Distributors Financial Corp1,022,000 6.45% due Aug. 15, 2012 1,052,743 1,049,997

Enbridge Inc.200,000 7.22% due Jul. 24, 2030 245,800 270,285

1,200,000 7.20% due Jun. 18, 2032 1,218,300 1,646,477Greater Toronto Airports Authority

5,491,000 6.45% due Dec. 3, 2027 6,053,512 7,015,4902,354,654 6.45% due Jul. 30, 2029 2,250,242 2,898,1301,600,000 6.47% due Feb. 2, 2034 1,916,197 2,107,892

Health Montreal Collective Limited Partnership6,740,000 6.72% due Sep. 30, 2049 6,755,095 7,763,918

IGM Financial Inc.500,000 6.58% due Mar. 7, 2018 501,985 579,594

Merrill Lynch & Company Inc.1,439,762 6.14% due May 12, 2012 1,493,033 1,451,348

Milit-Air Inc.551,360 5.75% due Jun. 30, 2019 597,493 625,552

National Bank of Canada1,800,000 4.03% due May 26, 2015 1,800,000 1,907,452

Ontario Infrastructure Projects Corporation1,400,000 4.70% due Jun. 1, 2037 1,401,862 1,584,255

Ontario School Boards Financing Corporation1,780,784 6.55% due Oct. 19, 2026 1,773,091 2,216,224

653,916 5.80% due Nov. 7, 2028 651,620 778,516Plenary Properties LTAP LP

3,061,000 6.29% due Jan. 31, 2044 3,770,968 3,751,835PSP Capital Inc.

17,000,000 4.57% due Dec. 9, 2013 17,408,680 17,993,2044,350,000 2.94% due Dec. 3, 2015 4,348,173 4,520,572

Royal Bank of Canada1,750,000 5.95% due Jun. 18, 2014 1,917,073 1,889,599

Royal Bank of Canada (callable)5,660,000 3.18% due Nov. 2, 2020-(2015) 5,658,415 5,704,695

Royal Office Finance LP10,940,064 5.21% due Nov. 12, 2032 10,907,376 13,013,667

SNC-Lavalin Group Inc.930,000 6.63% due Jun. 30, 2044 1,156,734 1,171,816

Strait Crossing Development Inc.*2,795,669 6.17% due Sep. 15, 2031 2,604,445 2,866,354

Teranet Holdings LP3,675,000 5.75% due Dec. 17, 2040 3,674,999 3,860,0391,640,000 6.10% due Jun. 17, 2041 1,639,277 1,801,836

Toronto Community Housing Corporation Issuer Trust1,400,000 4.88% due May 11, 2037 1,399,999 1,602,9802,000,000 5.40% due Feb. 22, 2040 1,999,999 2,453,150

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Scotia Private Income Pool (Continued)(formerly, Pinnacle Income Fund)




AverageCost ($)

FairValue ($)


Toronto-Dominion Bank, The (callable)8,500,000 4.78% due Dec. 14, 2105-(2016) 7,968,070 9,070,007

11,080,000 5.76% due Dec. 18, 2106-(2017) 11,149,440 12,370,503Trans-Canada Pipelines Limited

321,343 11.20% due Jun. 1, 2014 434,456 380,908700,000 7.90% due Apr. 15, 2027 734,489 1,007,902300,000 8.21% due Apr. 25, 2030 366,030 436,618

132,232,269 144,574,388

TOTAL BOND AND DEBENTURE INSTRUMENTS 274,251,780 293,397,643

MONEY MARKET INSTRUMENTS – 2.7%1,300,000 Government of Canada Treasury Bills

0.87% due Jan. 5, 2012 1,299,753 1,299,8777,000,000 Province of Quebec Promissary Notes

0.94% to 0.96% due fromJan. 4, 2012 to Jan. 20, 2012 6,997,196 6,998,254

8,296,949 8,298,131



NET ASSETS – 100.0% 302,146,256

* This security is not actively traded and considered illiquid.




Federal Bonds 29.4 26.4Provincial Bonds 10.5 17.9Municipal Bonds 0.8 –Corporate Bonds 47.8 54.4Mortgage-Backed Securities 8.6 –Money Market Instruments 2.7 0.9

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SScotia Private Income Pool (Continued)

(formerly, Pinnacle Income Fund)



STATEMENT OF INVESTMENT PORTFOLIOAs at December 31, 2011



The table below summarizes the Fund’s exposure to interestrate risk by remaining term to maturity of the Fund’s portfolioof bond and debenture instruments.


Less than 1 year $ 6,798,314 $ 5,004,052

1-3 years 31,186,035 47,526,564

3-5 years 85,154,076 65,683,203

5-10 years 57,955,010 30,499,221

H 10 years 112,304,208 136,754,477

Total $293,397,643 $285,467,517

* Excludes cash, money market instruments and preferred shares as applicable.

As at December 31, 2011, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift inthe yield curve and all other variables held constant, NetAssets would have decreased or increased by approximately$5,514,691 or 1.8% of total Net Assets (December 31, 2010 –$4,625,067, or 1.6% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.


The table below summarizes the credit ratings of the bondand debenture instruments, excluding cash and money marketinstruments but including preferred shares, held by the Fund.

Percentage ofTotal Bond

and DebentureInstruments (%)






A– to AAA+ 93.3 90.6 95.5 94.3

B– to BBB+ 6.7 6.5 4.5 4.4

Total 100.0 97.1 100.0 98.7





Accounts payable and accrued liabilities $1,928,704 $3,816,873



December 31, 2011


Bond and Debenture Instruments $ – $293,397,643 $ – $293,397,643

Money Market Instruments – 8,298,131 – 8,298,131

$ – $301,695,774 $ – $301,695,774

December 31, 2010


Bond and Debenture Instruments $ – $285,467,517 $ – $285,467,517


$ – $288,141,280 $ – $288,141,280


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Scotia Private Income Pool (Continued)(formerly, Pinnacle Income Fund)


Scotia Private High Yield Income Pool(formerly, Pinnacle High Yield Income Fund)


2011 2010

ASSETSInvestments at fair value $195,538,726 $146,272,339Cash 39,154 4,592Accrued investment income 3,360,318 2,378,792Subscriptions receivable 280,951 114,335Receivable for currency forward contracts 351,873 1,734,847Accounts receivable – 2,472

199,571,022 150,507,377

LIABILITIESPayable for securities purchased – 186,325Redemptions payable 47,266 244,853Accrued expenses 1,592 80,998Payable for currency forward contracts 585,205 430,468

634,063 942,644

Net Assets $198,936,959 $149,564,733

NET ASSETS PER SERIESPinnacle Series Units $124,954,256 $131,588,514Series F Units $ 6,033,825 $ 5,909,980Series I Units $ 9,112,663 $ 10,226,418Series M Units $ 58,836,215 $ 1,839,821

UNITS OUTSTANDINGPinnacle Series Units 13,972,238 14,521,638Series F Units 649,565 626,307Series I Units 1,015,746 1,124,611Series M Units 6,537,899 201,474

NET ASSETS PER UNITPinnacle Series Units $ 8.94 $ 9.06Series F Units $ 9.29 $ 9.44Series I Units $ 8.97 $ 9.09Series M Units $ 9.00 $ 9.13


2011 2010

INVESTMENT INCOMEInterest $11,956,055 $10,307,720Securities lending 6,416 4,479Foreign withholding taxes/tax reclaims – (32,256)Other income 426 327

11,962,897 10,280,270

EXPENSESManagement fees (note 5) 148,848 39,757Harmonized Sales Tax/Goods and Services Tax 36,281 13,197Audit fees 16,508 14,575Independent Review Committee fees 3,073 2,727Custodian fees 19,292 23,095Filing fees 17,730 18,396Legal fees 3,255 3,806Unitholder reporting costs 23,413 27,019Unitholder administration and service fees 119,507 116,064Overdraft charges 1,230 –


386,835 254,483


Net realized gain (loss) on investments sold (1,248,576) (4,829,554)Net realized gain (loss) on currency forwards (560,674) –Net gain (loss) foreign exchange 317,491 2,173,693Change in unrealized appreciation (depreciation) of investments (472,230) 10,264,873Change in unrealized appreciation (depreciation) of currency forwards (1,537,711) 772,002

Net gain (loss) on investments (3,501,700) 8,381,014

Increase (decrease) in Net Assets from operations $ 8,074,362 $18,406,801

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 6,395,640 $17,745,373Series F Units $ 222,374 $ 556,453Series I Units* $ 495,165 $ 96,808Series M Units** $ 961,183 $ 8,167

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ 0.45 $ 1.09Series F Units $ 0.38 $ 1.00Series I Units* $ 0.46 $ 0.09Series M Units** $ 0.25 $ 0.07


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $131,588,514 $150,648,914Series F Units 5,909,980 3,730,685Series I Units* 10,226,418 –Series M Units** 1,839,821 –

149,564,733 154,379,599

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 6,395,640 17,745,373Series F Units 222,374 556,453Series I Units* 495,165 96,808Series M Units** 961,183 8,167

8,074,362 18,406,801


Pinnacle Series Units (7,970,518) (9,589,200)Series F Units (304,958) (295,402)Series I Units* (606,034) (125,772)Series M Units** (2,633,143) (12,904)

(11,514,653) (10,023,278)


Pinnacle Series Units 16,902,579 16,845,000Series F Units 1,360,720 2,343,522Series I Units* 270,109 10,242,446Series M Units** 65,446,931 1,839,861

Reinvested distributionsPinnacle Series Units 7,920,619 9,514,653Series F Units 134,048 151,998Series I Units* 606,034 125,772Series M Units** 1,719,284 11,588

Payments on redemptionPinnacle Series Units (29,882,578) (53,576,226)Series F Units (1,288,339) (577,276)Series I Units* (1,879,029) (112,836)Series M Units** (8,497,861) (6,891)

52,812,517 (13,198,389)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (6,634,258) (19,060,400)Series F Units 123,845 2,179,295Series I Units* (1,113,755) 10,226,418Series M Units** 56,996,394 1,839,821

49,372,226 (4,814,866)

NET ASSETS – END OF PERIODPinnacle Series Units 124,954,256 131,588,514Series F Units 6,033,825 5,909,980Series I Units* 9,112,663 10,226,418Series M Units** 58,836,215 1,839,821

$198,936,959 $149,564,733


** Start date October 5, 2010.

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Portfolio Advisor: Guardian Capital LP




AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS – 85.9%Mortgage-Backed Securities – 3.1%

Merrill Lynch Financial Assets Inc.500,000 6.65% due Nov. 12, 2034 492,950 565,338

1,599,000 6.45% due Jun. 12, 2035 1,480,419 1,633,192Miramax LLC, Class A

1,000,000 6.25% due Oct. 20, 2015 1,018,102 1,017,842Miramax LLC, Class B

3,000,000 10.00% due Apr. 20, 2017 2,965,883 2,955,147

5,957,354 6,171,519

Corporate Bonds – 82.8%Ahern Rentals Inc. (callable)

2,000,000 9.25% due Aug. 15, 2013-(2011) 2,411,001 417,707AK Steel Corporation (callable)

2,570,000 7.63% due May 15, 2020-(2015) 2,637,522 2,557,170Bell Aliant Regional Communications, LimitedPartnership

1,100,000 6.17% due Feb. 26, 2037 1,090,920 1,128,820Black Press Group Ltd.*

3,000,000 10.00% due Feb. 4, 2014 3,000,000 2,947,500Bombardier Inc.

2,000,000 7.35% due Dec. 22, 2026 2,025,000 2,009,167Brookfield Power Corporation

1,500,000 5.25% due Nov. 5, 2018 1,499,460 1,597,189Canadian Satellite Radio Holdings Inc. (callable)

2,500,000 9.75% due Jun. 21, 2018-(2014) 2,487,500 2,560,417Canadian Tire Corporation, Limited

2,973,000 5.61% due Sep. 4, 2035 2,709,647 2,991,293Cascades Inc. (callable)

1,000,000 7.75% due Dec. 15, 2017-(2013) 1,042,471 1,008,6092,025,000 7.75% due Dec. 15, 2016-(2013) 1,984,500 2,021,625

CCS Inc. (callable)2,000,000 11.00% due Nov. 15, 2015-(2011) 1,814,907 1,986,653.00

Clear Channel Communications, Inc. (callable)3,000,000 10.75% due Aug. 1, 2016-(2012) 2,245,845 2,047,781

Clondalkin Acquisition B.V. (callable)1,000,000 2.55% due Dec. 15, 2013-(2011) 786,193 952,574

Connacher Oil & Gas Limited (callable)1,000,000 8.75% due Aug. 1, 2018-(2015) 1,000,000 902,5003,500,000 8.50% due Aug. 1, 2019-(2015) 3,404,305 3,227,039

Corrections Corporation of America (callable)2,500,000 7.75% due Jun. 1, 2017-(2013) 2,797,179 2,769,854

Cott Beverages Inc. (callable)2,750,000 8.13% due Sep. 9, 2018-(2014) 2,867,418 3,029,329

Data & Audio-Visual Enterprises Holdings Inc.*(callable)

4,000,000 9.50% due Apr. 29, 2018-(2014) 4,000,000 3,607,500Data & Audio-Visual Enterprises Holdings Inc.*(callable)

2,870,981 15.00% due Nov. 25, 2018-(2011) 2,869,444 2,562,408DISH DBS Corporation

2,500,000 7.75% due May 31, 2015 2,646,852 2,795,324Dole Food Company, Inc. (callable)

1,500,000 8.00% due Oct. 1, 2016-(2012) 1,567,653 1,582,645Domtar Corporation

250,000 7.13% due Aug. 15, 2015 302,736 281,9621,250,000 9.50% due Aug. 1, 2016 1,405,919 1,537,695

El Paso Corporation900,000 7.25% due Jun. 1, 2018 919,889 1,009,370


AverageCost ($)

FairValue ($)


Fairfax Financial Holdings Limited3,117,000 7.38% due Apr. 15, 2018 3,299,803 3,478,9542,000,000 7.50% due Aug. 19, 2019 1,992,780 2,209,4163,000,000 6.40% due May 25, 2021 3,004,040 3,035,3772,000,000 7.75% due Jul. 15, 2037 1,943,339 1,945,963

Flint Energy Services Ltd. (callable)2,000,000 7.50% due Jun. 15, 2019-(2015) 1,980,000 1,970,000

Freeport-McMoRan Copper & Gold Inc. (callable)4,150,000 8.38% due Apr. 1, 2017-(2012) 4,227,689 4,471,963

Frontier Communications Corporation1,600,000 8.75% due Apr. 15, 2022 1,655,293 1,613,774

Garda World Security Corp. (callable)5,000,000 9.75% due Mar. 15, 2017-(2014) 5,157,960 5,056,250

Groupe Aeroplan Inc.1,000,000 6.95% due Jan. 26, 2017 1,003,840 1,057,108

Harvest Operations Corp.1,000,000 6.88% due Oct. 1, 2017 1,019,713 1,041,720

Huntington Ingalls Industries Inc. (callable)1,500,000 7.13% due Mar. 15, 2016-(2016) 1,456,597 1,499,542

Iron Mountain Incorporated (callable)3,375,000 7.50% due Mar. 15, 2017-(2012) 3,330,363 3,456,141

Kruger Products LP4,000,000 8.00% due Aug. 9, 2018 4,000,000 3,900,000

Las Vegas Sands Corp. (callable)1,000,000 6.38% due Feb. 15, 2015-(2011) 1,083,882 1,029,627

Leucadia National Corporation (callable)2,500,000 7.13% due Mar. 15, 2017-(2012) 2,496,709 2,572,462

MEG Energy Corp.2,000,000 6.50% due Mar. 15, 2021 1,960,609 2,075,798

MetroPCS Communications, Inc. (callable)2,000,000 7.88% due Sep. 1, 2018-(2014) 2,085,174 2,070,704

Milagro Oil & Gas, Inc. (callable)3,000,000 10.50% due May 15, 2014-(2014) 2,811,329 2,445,112

Millar Western Forest Products Ltd. (callable)7,250,000 8.50% due Apr. 1, 2021-(2016) 6,343,650 5,613,570

NES Rentals Holdings, Inc. (callable)500,000 12.25% due Apr. 15, 2015-(2013) 480,697 429,805

Newalta Corporation (callable)2,500,000 7.63% due Nov. 23, 2017-(2013) 2,500,000 2,553,125

Newalta Corporation2,500,000 7.75% due Nov. 14, 2015 2,500,000 2,558,333

Nextel Communications, Inc. (callable)6,050,000 7.38% due Aug. 1, 2015-(2011) 5,941,532 5,608,986

North American Energy Partners Inc. (callable)4,500,000 9.13% due Apr. 7, 2017-(2013) 4,500,000 4,320,000

NOVA Chemicals Corporation1,305,000 6.50% due Jan. 15, 2012 1,369,909 1,329,530

NOVA Chemicals Corporation (callable)400,000 3.78% due Nov. 15, 2013-(2011) 369,778 401,406

2,000,000 8.38% due Nov. 1, 2016-(2013) 2,117,703 2,210,7892,000,000 8.63% due Nov. 1, 2019-(2014) 2,127,235 2,241,353

Paragon Gaming Inc.*960,343 12.50% due Apr. 15, 2012 960,343 921,929

Paramount Resources Ltd. (callable)4,000,000 8.25% due Dec. 13, 2017-(2013) 4,000,000 4,126,667

Pilgrim’s Pride Corporation (callable)2,000,000 7.88% due Dec. 15, 2014-(2014) 2,006,772 1,916,622

Precision Drilling Corporation3,500,000 6.50% due Mar. 15, 2015 3,498,750 3,540,833

Precision Drilling Corporation (callable)1,000,000 6.63% due Nov. 15, 2020-(2015) 999,650 1,036,626

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Scotia Private High Yield Income Pool (Continued)(formerly, Pinnacle High Yield Income Fund)

Portfolio Advisor: Guardian Capital LP


FaceValue ($)/Number ofShares Issuer

AverageCost ($)

FairValue ($)


Quadra FNX Mining Ltd. (callable)1,000,000 7.75% due Jun. 15, 2015-(2015) 972,027 1,028,985

Qwest Communications International Inc.(callable)

2,000,000 7.13% due Apr. 1, 2018-(2013) 2,036,240 2,124,191RTL-Westcan LP (callable)

2,150,000 9.50% due Apr. 4, 2017-(2013) 2,172,000 2,158,063Savanna Energy Services Corp. (callable)

4,000,000 7.00% due May 25, 2018-(2014) 4,000,000 3,886,667Seminole Hard Rock Entertainment Inc. (callable)

500,000 3.05% due Mar. 15, 2014-(2011) 302,252 477,561Sherritt International Corporation

2,000,000 8.25% due Oct. 24, 2014 2,000,000 2,096,2502,000,000 7.75% due Oct. 15, 2015 2,000,000 2,073,3334,000,000 8.00% due Nov. 15, 2017 4,000,000 4,060,000

Taseko Mines Limited (callable)2,000,000 7.75% due Apr. 15, 2019-(2015) 1,905,465 1,833,834

Trident Exploration Corp. (callable)7,000,000 8.25% due Apr. 13, 2018-(2015) 6,987,500 6,405,000

Trinidad Drilling Ltd. (callable)4,000,000 7.88% due Jan. 15, 2019-(2015) 4,012,533 4,197,443

United Refining Company (callable)500,000 10.50% due Feb. 28, 2018-(2015) 471,660 476,288

Vermilion Energy Inc. (callable)1,500,000 6.50% due Feb. 10, 2016-(2014) 1,500,000 1,536,094

Windstream Corporation1,000,000 7.88% due Nov. 1, 2017 1,056,071 1,110,733

167,157,248 164,736,058


EQUITIES – 0.1%Canadian Equities – 0.1%

13,800 Data & Audio-Visual Enterprises Holdings Inc.,Warrants* $12.00 Sep. 25, 2018 – 53,999

39,100 Data & Audio-Visual Enterprises Holdings Inc.,Warrants* $12.00 Sep. 25, 2018, Class B – 152,998

Number ofShares/FaceValue ($) Issuer

AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Canadian Equities (cont’d)

2,300 Data & Audio-Visual Enterprises Holdings lnc.Warrants $3.91 Sep. 25, 2018* – 9,000

– 215,997

United States – 0.0%44,000 InSight Health Services Holdings Corp.* 580,990 –

TOTAL EQUITIES 580,990 215,997


0.74% to 0.91% due fromJan. 6, 2012 to Mar. 15, 2012

6,220,000 Province of Ontario Treasury Bills 12,739,947 12,750,8660.95% to 0.98% due fromJan. 18, 2012 to Mar. 14, 2012 6,207,693 6,214,501

3,020,000 Province of Manitoba Term Deposits0.92% to 0.93% due Mar. 7, 2012 3,014,209 3,014,940

1,390,000 Province of Quebec Promissory Notes 1,421,457 1,416,106(U.S.) 0.03% to 0.05% due Jan. 12, 2012

1,000,000 Export Development Canada Commercial Paper(U.S.) 0.03% due Mar. 6, 2012 1,024,088 1,018,739

24,407,394 24,415,152


Currency Forward Contracts – (0.1)% (233,332)OTHER ASSETS, LESS LIABILITIES – 2.0% 3,631,565

NET ASSETS – 100.0% 198,936,959


CURRENCY FORWARD CONTRACTS

Settlement Date Currency To Be Received Contractual Amount Currency To Be Delivered Contractual AmountCanadian Value as at

December 31, 2011 ($)

Canadian ($)Appreciation/

(Depreciation)

Jan. 23, 2012 Canadian Dollar 19,048,819 U.S. Dollar 18,355,000 18,719,086 329,733Jan. 23, 2012 Canadian Dollar 1,602,886 U.S. Dollar 1,550,000 1,580,746 22,140Jan. 23, 2012 U.S. Dollar 18,355,000 Canadian Dollar 19,259,351 19,239,650 (539,635)Jan. 23, 2012 U.S. Dollar 1,550,000 Canadian Dollar 1,626,369 1,624,705 (45,570)

(233,332)

The currency forward contracts outstanding at December 31, 2011 are placed with a financial institution with a credit rating of AA� by Standard & Poor’s.




Bond and Debenture Instruments 85.9 91.3Equities 0.1 0.1Money Market Instruments 12.1 6.4Currency Forward Contracts (0.1) 0.9

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SScotia Private High Yield Income Pool (Continued)

(formerly, Pinnacle High Yield Income Fund)


Portfolio Advisor: Guardian Capital LP-For equities, all common shares unless otherwise noted.The accompanying notes are an integral part of these financial statements.



The table below summarizes the Fund’s exposure to interestrate risks by remaining term to maturity of the Fund’sportfolio of bond and debenture instruments.


Less than 1 year $ 2,251,459 $ 978,856

1-3 years 23,730,941 13,147,043

3-5 years 52,712,965 26,898,427

5-10 years 80,324,666 86,279,887

H 10 years 11,887,546 9,271,106

Total $170,907,577 $136,575,319


As at December 31, 2011, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift inthe yield curve and all other variables held constant, NetAssets would have decreased or increased by approximately$2,192,937, or 1.1% of total Net Assets (December 31, 2010 –$1,687,573, or 1.1% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.

Currency risk (note 3)

The table below indicates the currencies to which the Fundhad significant exposure, net of the impact of foreign cur-rency forward contracts and foreign currency spot contracts,if any, based on the fair value of the Fund’s financialinstruments.

CurrencyNet CurrencyExposure ($)


Net CurrencyExposure ($)



U.S. Dollar 88,496,276 44.5 38,163,050 25.5

Australian Dollar 1 0.0 978,856 0.7

Total 88,496,277 44.5 39,141,906 26.2

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all currencies, withall other variables held constant, Net Assets would havedecreased or increased, respectively by $8,849,628, or approx-imately 4.5% of total Net Assets (December 31, 2010 –$3,914,191, or 2.6% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.



Percentage ofBond andDebenture

Instruments (%)Percentage ofNet Assets (%)




A– to AAA+ 1.3 1.1 5.6 5.1B– to BBB+ 81.4 69.9 84.5 77.3C– to CCC+ 7.4 6.4 7.2 6.5Unrated 9.9 8.5 2.7 2.4

Total 100.0 85.9 100.0 91.3





Accounts payable and accrued liabilities $ 48,858 $512,176

Payable for currency forward contracts 585,205 430,468

$634,063 $942,644



December 31, 2011


Warrants $ – $ 215,997 $ – $ 215,997Bond and Debenture Instruments – 170,907,577 – 170,907,577Money Market Instruments – 24,415,152 – 24,415,152Currency Forward Contracts – Assets – 351,873 – 351,873

$ – $195,890,599 $ – $195,890,599

Currency Forward Contracts – Liabilities – (585,205) – (585,205)

$ – $195,305,394 $ – $195,305,394

December 31, 2010


Equities $ – $ 875 $ – $ 875Warrants – 192,648 – 192,648Bond and Debenture Instruments – 136,575,319 – 136,575,319Money Market Instruments – 9,503,497 – 9,503,497Currency Forward Contracts – Assets – 1,734,847 – 1,734,847

$ – $148,007,186 $ – $148,007,186


$ – $147,576,718 $ – $147,576,718


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Scotia Private High Yield Income Pool (Continued)(formerly, Pinnacle High Yield Income Fund)


Scotia Private American Core-Plus Bond Pool(formerly, Pinnacle American Core-Plus Bond Fund)


2011 2010

ASSETSInvestments at fair value $191,102,679 $147,022,012Cash 43,962,367 119,161Accrued investment income 1,616,715 1,004,230Receivable for securities sold 3,586,623 2,633,738Subscriptions receivable 122,781 12,489Receivable for currency forward contracts 1,803,130 2,555,564Accounts receivable – 2,831

242,194,295 153,350,025

LIABILITIESPayable for securities purchased 51,626,588 26,250,648Redemptions payable 40,663 362,126Accrued expenses 261 63,321Payable for currency spot contracts – 153Payable for currency forward contracts 39,532 74,919

51,707,044 26,751,167

Net Assets $190,487,251 $126,598,858

NET ASSETS PER SERIESPinnacle Series Units $ 27,446,398 $ 23,982,777Series F Units $ 117,450 $ 80,774Series I Units $162,923,403 $102,535,307




2011 2010

INVESTMENT INCOMEDividends $ 16 $ 17Interest 5,931,748 2,916,359Securities lending 2,477 –Foreign withholding taxes/tax reclaims (22,414) (9,155)Other income 2,678 124

5,914,505 2,907,345

EXPENSESManagement fees (note 5) 828 561Harmonized Sales Tax/Goods and Services Tax 15,218 6,147Audit fees 19,200 14,225Independent Review Committee fees 2,856 2,727Custodian fees 51,364 112,156Filing fees 16,439 16,442Legal fees 2,784 3,806Unitholder reporting costs 13,863 15,592Unitholder administration and service fees 65,858 88,356Overdraft charges 1,188 –


185,498 257,724


Net realized gain (loss) on investments sold 5,659,278 919,271Net realized gain (loss) on currency forwards (3,498,686) –Net gain (loss) foreign exchange (121,583) 5,478,888Transaction costs (34) (2)Change in unrealized appreciation (depreciation) of investments 6,677,025 (919,117)Change in unrealized appreciation (depreciation) of currency spots 153 –Change in unrealized appreciation (depreciation) of currency forwards (717,047) 1,368,147

Net gain (loss) on investments and transaction costs 7,999,106 6,847,187

Increase (decrease) in Net Assets from operations $13,728,113 $9,496,808

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 1,996,550 $2,506,023Series F Units $ 8,329 $ 6,041Series I Units $11,723,234 $6,984,744

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ 0.71 $ 0.78Series F Units $ 0.68 $ 0.70Series I Units $ 0.77 $ 0.76


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 23,982,777 $ 27,424,631Series F Units 80,774 81,265Series I Units 102,535,307 41,296,946

126,598,858 68,802,842

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 1,996,550 2,506,023Series F Units 8,329 6,041Series I Units 11,723,234 6,984,744

13,728,113 9,496,808


Pinnacle Series Units (719,637) (758,980)Series F Units (2,621) (1,600)Series I Units (4,503,442) (2,345,742)

From realized gainPinnacle Series Units (148,024) –Series F Units (636) –Series I Units (882,676) –

(6,257,036) (3,106,322)


Pinnacle Series Units 8,095,627 5,590,517Series F Units 29,034 12,142Series I Units 49,572,833 83,123,975

Reinvested distributionsPinnacle Series Units 866,466 753,004Series F Units 3,258 1,600Series I Units 5,386,118 2,345,742

Payments on redemptionPinnacle Series Units (6,627,361) (11,532,418)Series F Units (688) (18,674)Series I Units (907,971) (28,870,358)

56,417,316 51,405,530

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units 3,463,621 (3,441,854)Series F Units 36,676 (491)Series I Units 60,388,096 61,238,361

63,888,393 57,796,016

NET ASSETS – END OF PERIODPinnacle Series Units 27,446,398 23,982,777Series F Units 117,450 80,774Series I Units 162,923,403 102,535,307

$190,487,251 $126,598,858

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Portfolio Advisor: Logan Circle Partners, L.P.




AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS – 100.3%British Pound – 1.3%

Dubai Holding Commercial Operations Ltd.500,000 6.00% due Feb. 1, 2017 637,144 575,727

United Kingdom Treasury Gilt900,000 5.00% due Mar. 7, 2018 1,691,057 1,741,126100,000 4.75% due Mar. 7, 2020 166,591 195,228

2,494,792 2,512,081

Chile Peso – 0.3%Republic of Chile

325,000,000 5.50% due Aug. 5, 2020 670,985 661,602

Columbia Peso – 1.3%Republic of Columbia

3,625,000,000 12.00% due Oct. 22, 2015 2,567,235 2,494,500

European Euro – 1.1%Bundesrepublik Deutschland

60,000 3.50% due Jan. 4, 2016 86,750 88,347185,000 3.75% due Jan. 4, 2017 283,832 278,854

Government of Netherlands500,000 3.25% due Jul. 15, 2021 761,807 718,355

Republic of Argentina875,738 7.82% due Dec. 31, 2033 858,639 690,319

Republic of Korea75,000 4.25% due Dec. 7, 2021 113,400 102,047

Vale S.A.125,000 4.38% due Mar. 24, 2018 172,710 167,712

2,277,138 2,045,634

Japanese Yen – 0.5%Eksportfinans ASA

100,000,000 0.72% due Jul. 28, 2016 1,051,526 988,835

Mexican Peso – 0.6%Mex Bonos Desarr

7,000,000 6.50% due Jun. 10, 2021 521,262 510,336United Mexican States

8,240,000 6.25% due Jun. 16, 2016 676,585 619,190

1,197,847 1,129,526

Norweigian Krone – 0.5%International Bank for Reconstruction andDevelopment, The

2,350,000 3.25% due Apr. 14, 2014 410,615 407,2303,000,000 3.75% due May 19, 2017 538,514 524,845

949,129 932,075

Peruvian Nuevo Sol – 0.5%Republic of Peru

2,200,000 8.20% due Aug. 12, 2026 978,986 987,529

Polish Zloty – 0.6%Government of Poland

4,100,000 5.25% due Oct. 25, 2017 1,362,355 1,194,992

South African Rand – 0.5%Republic Of South Africa

7,800,000 6.75% due Mar. 31, 2021 907,972 879,243

Uraguayan Peso – 1.0%Uruguay, Oriental Republic of

36,500,000 4.38% due Dec. 15, 2028 1,865,452 1,858,002


AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)United States Dollar – 92.1%

Adjustable Rate Mortgage Trust (callable)76,107 5.18% due Jan. 25, 2036-(2018) 77,845 61,840

Ally Auto Receivables Trust604,444 0.43% due Nov. 15, 2012 617,290 615,720

Ally Master Owner Trust820,000 1.81% due May 15, 2014 787,503 838,050

Altria Group, Inc.435,000 9.70% due Nov. 10, 2018 569,996 599,423160,000 10.20% due Feb. 6, 2039 211,500 254,062

American International Group, Inc.650,000 4.88% due Sep. 15, 2016 635,541 625,193

AmeriCredit Automobile Receivables Trust275,000 1.61% due Oct. 8, 2015 263,967 280,867

AmeriCredit Automobile Receivables TrustSeries 2010-4 Class B

325,000 1.99% due Dec. 8, 2013 307,992 331,047AmeriCredit Automobile Receivables TrustSeries 2011-3 Class B

560,000 2.28% due Jun. 8, 2016 548,386 571,097AmeriCredit Automobile Receivables TrustSeries 2011-4 Class A3

1,990,000 1.17% due May 9, 2016 1,966,471 2,012,565Ameriprise Financial Inc. (callable)

355,000 7.52% due Jun. 1, 2066-(2016) 349,830 363,933AmerisourceBergen Corporation

40,000 5.88% due Sep. 15, 2015 47,384 46,296Amgen Inc. (callable)

445,000 3.88% due Nov. 15, 2021-(Aug. 15, 2021) 451,898 460,809Anadarko Petroleum Corporation

650,000 6.38% due Sep. 15, 2017 707,295 766,809400,000 6.45% due Sep. 15, 2036 435,151 471,247

Anheuser-Busch Companies, Inc.750,000 5.50% due Jan. 15, 2018 827,968 894,621

ArcelorMittal140,000 6.13% due Jun. 1, 2018 147,324 140,763600,000 5.25% due Aug. 5, 2020 564,101 556,410

AT&T Corporation175,000 8.00% due Nov. 15, 2031 231,396 252,843

AT&T Inc.465,000 2.95% due May 15, 2016 494,964 495,22075,000 8.75% due Mar. 1, 2031 112,543 112,046

Banc of America Alternative Loan Trust74,619 5.50% due Apr. 25, 2020 80,489 72,233

Banc of America Commercial Mortgage Inc.175,000 5.63% due Jul. 10, 2016 181,188 197,929238,546 2.76% due Nov. 25, 2033 233,199 234,827144,559 4.88% due Nov. 10, 2042 142,085 147,807444,000 5.07% due Nov. 10, 2042 460,003 463,177850,000 6.21% due Feb. 10, 2051 934,214 975,950

Banc of America Mortgage Securities (callable)30,932 2.75% due Oct. 25, 2034 -(Apr. 25, 2017) 17,772 26,598

135,483 5.15% due Oct. 25, 2035-(Apr. 25, 2019) 118,718 126,818405,592 2.80% due Aug. 25, 2035-(2019) 344,762 323,525166,948 2.87% due Jan. 25, 2035-(Aug. 25, 2019) 149,537 137,796179,893 6.00% due Sep. 26, 2037-(May 25, 2021) 160,531 153,764

Bank of America Alternative Loan Trust(callable)

25,733 6.00% due Nov. 25, 2034-(Jan. 25, 2022) 29,369 26,21537,428 6.00% due Dec. 25, 2034-(May 25, 2022) 47,332 37,902

167,063 6.00% due Jun. 25, 2035-(Feb. 25, 2023) 152,942 133,612

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AverageCost ($)

FairValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)United States Dollar (cont’d)

Bank of America Corporation534,569 4.75% due Aug. 1, 2015 520,099 526,961130,000 6.10% due Jun. 15, 2017 125,277 126,229

Bank of America Mortgage24,934 7.50% due Aug. 25, 2035 24,719 25,618

Bear Stearns Adjustable Rate MortgageTrust

630,722 2.78% due Jan. 25, 2035 507,955 522,516Bear Stearns Commercial Mortgage Inc.

95,964 5.27% due Mar. 11, 2039 95,468 97,98053,243 4.74% due Sep. 11, 2042 56,725 55,08055,000 4.94% due Sep. 11, 2042 55,579 56,614

Bear Stearns Companies LLC730,000 5.55% due Jan. 22, 2017 753,950 788,665

Bemis Company, Inc.75,000 5.65% due Aug. 1, 2014 81,095 82,749

Best Buy Co., Inc.505,000 6.75% due Jul. 15, 2013 570,842 545,542

BHP Billiton Limited225,000 3.25% due Nov. 21, 2021 228,119 235,836

BMW Vehicle Owner Trust716,995 0.31% due Sep. 25, 2012 710,008 730,472

Boston Scientific Corporation370,000 4.50% due Jan. 15, 2015 383,548 396,647300,000 6.40% due Jun. 15, 2016 316,689 342,469

Carmax Auto Owner Trust255,138 0.31% due Sep. 17, 2012 252,652 259,933267,264 1.56% due Jul. 15, 2014 278,726 273,090

Caterpillar Inc.115,000 5.20% due May 27, 2041 112,980 141,933

CF Industries Holdings, Inc.405,000 6.88% due May 1, 2018 453,444 472,957

CIGNA Corporation320,000 5.38% due Feb. 15, 2042 322,394 322,928

Citicorp Mortgage Securities, Inc. (callable)206,941 5.75% due Apr. 25, 2015 (Jun. 25, 2036) 171,136 196,590

Citigroup Commercial Mortgage Trust740,000 5.43% due Oct. 15, 2049 771,999 840,050

Citigroup Inc.905,000 4.59% due Dec. 15, 2015 927,769 922,500

Citigroup/Deutsche Bank CommercialMortgage Trust

120,000 5.34% due Jan. 15, 2046 130,962 132,399Comcast Corporation

580,000 6.50% due Jan. 15, 2015 639,664 669,853350,000 5.70% due May 15, 2018 386,631 409,181

Commercial Mortgage Asset Trust250,000 7.35% due Jan. 17, 2032 267,442 271,563125,000 7.35% due Jan. 17, 2032 133,604 137,030

Commonwealth Edison Company510,000 5.80% due Mar. 15, 2018 564,552 613,273100,000 6.45% due Jan. 15, 2038 122,518 134,421

Commonwealth REIT (callable)75,000 5.75% due Feb. 15, 2014-(Aug. 15, 2013) 72,462 78,218

Consumers Energy Company150,000 6.13% due Mar. 15, 2019 170,885 185,845

Continental Airlines Inc.246,651 0.88% due Jun. 2, 2015 227,963 241,748

Corporacion Andina de Fomento445,000 8.13% due Jun. 4, 2019 525,688 556,097


AverageCost ($)

FairValue ($)


Countrywide Alternative Loan Trust(callable)

36,199 6.00% due Jan. 25, 2035-(Aug. 25, 2017) 44,583 35,684Countrywide Alternative Loan Trust

29,277 5.50% due Mar. 25, 2036 35,533 15,591Countrywide Asset-Backed Certificates

150,000 5.53% due Mar. 25, 2029 133,952 132,073Countrywide Home Loans (callable)

40,105 2.61% due Sep. 20, 2034-(Apr. 20, 2015) 38,906 12,35553,050 6.00% due Mar. 25, 2036-(Dec. 25, 2017) 56,339 44,513

Countrywide Home Loans439,780 4.58% due Dec. 19, 2033 424,003 449,230

Credit Suisse First Boston MortgageSecurities Corp. (callable)

4,002 7.00% due Feb. 25, 2034-(Sep. 25, 2016) 5,582 4,3518,885 7.00% due Dec. 25, 2033-(Jul. 25, 2018) 12,337 10,530

Credit Suisse First Boston MortgageSecurities Corp.

10,000 4.60% due Mar. 15, 2035 10,898 10,390460,000 5.51% due Jul. 15, 2035 461,420 471,173195,000 5.33% due Nov. 15, 2036 205,454 199,20191,264 4.69% due Apr. 15, 2037 95,340 95,42150,000 6.38% due Apr. 15, 2037 52,499 51,58990,114 5.12% due Aug. 15, 2038 95,213 92,363

CVS Caremark Corporation260,000 3.25% due May 18, 2015 264,100 279,032187,467 6.04% due Dec. 10, 2028 195,416 201,348

DBUBS Mortgage Trust395,000 3.64% due Sep. 10, 2016 393,838 425,005

DCP Midstream, LLC185,000 3.25% due Oct. 1, 2015 174,246 188,470

Delta Air Lines, Inc.195,000 6.42% due Jul. 2, 2012 211,957 201,397

Deutsche Telekom International Finance B.V.255,000 4.88% due Jul. 8, 2014 268,779 276,518

Developers Diversified Realty Corporation(callable)

175,000 5.38% due Oct. 25, 2012-(Jul. 17, 2012) 174,559 179,254DIRECTV Holdings LLC

655,000 3.55% due Mar. 15, 2015 647,939 694,465Discover Financial Services

473,000 10.25% due Jul. 15, 2019 590,984 589,353E*Trade Financial Corporation (callable)

325,000 12.50% due Nov. 30, 2017-(2012) 375,153 375,809Ecolab, Inc.

395,000 4.35% due Dec. 8, 2021 403,454 435,424465,000 5.50% due Dec. 8, 2041 502,303 528,638

Eksportfinans ASA105,000 2.38% due May 25, 2016 90,215 86,581

El Paso Pipeline Partners, L.P120,000 6.50% due Apr. 1, 2020 122,620 134,231

Enterprise Products Operating LLC75,000 5.90% due Apr. 15, 2013 83,622 80,092

Enterprise Products Operating LLC (callable)305,000 7.03% due Jan. 15, 2068-(2018) 303,447 324,328

Enterprise Products Operating LLC680,000 5.25% due Jan. 31, 2020 724,844 766,175

Export-Import Bank of Korea, The400,000 4.13% due Sep. 9, 2015 412,102 417,169

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AverageCost ($)

FairValue ($)


Express Scripts, Inc.475,000 6.25% due Jun. 15, 2014 533,289 534,049

Fannie Mae288,567 5.50% due Sep. 25, 2017 302,383 312,734418,967 4.00% due Aug. 1, 2018 444,360 452,400740,000 Stripped Bond due Oct. 9, 2019 433,366 586,383180,000 5.26% due May 25, 2020 200,642 204,19360,000 4.50% due Aug. 25, 2023 55,904 67,672

175,000 4.50% due Sep. 25, 2024 190,153 198,040165,000 5.00% due Oct. 25, 2024 167,783 182,22714,632 7.50% due Nov. 25, 2026 21,212 16,842

115,000 4.50% due Jun. 25, 2029 121,610 132,252495,000 4.00% due Nov. 25, 2029 469,066 558,126

3,283 7.50% due Jun. 1, 2031 5,265 3,8875,214 7.50% due Apr. 1, 2032 7,572 6,162

22,000 5.00% due Nov. 1, 2033 28,540 24,03113,609 5.00% due Nov. 1, 2034 16,141 14,85210,667 5.00% due Nov. 1, 2034 12,725 11,645

109,089 5.50% due Sep. 25, 2035 127,515 122,19536,901 5.00% due Jan. 1, 2036 40,945 40,271

513,157 4.50% due Aug. 25, 2040 574,084 578,0981,590,000 3.00% due Dec. 1, 2099 1,672,970 1,672,5331,815,000 3.50% due Dec. 1, 2099 1,953,931 1,933,4824,845,000 4.00% due Dec. 1, 2099 5,177,954 5,182,874

13,950,000 4.50% due Dec. 1, 2099 15,191,913 15,122,6833,035,000 5.00% due Dec. 1, 2099 3,336,885 3,340,3786,335,000 5.50% due Dec. 1, 2099 7,059,499 7,026,877

Fannie Mae Grantor Trust (callable)20,632 5.41% due Sep. 26, 2033-(Dec. 26, 2010) 23,619 22,16614,043 9.50% due Jul. 25, 2041-(2016) 21,727 16,7345,455 7.50% due Dec. 25, 2041-(Oct. 25, 2017) 7,864 6,540

Fannie Mae Grantor Trust283,746 6.99% due Feb. 19, 2030 321,703 338,153195,396 7.50% due Jun. 19, 2030 221,534 223,176234,451 7.50% due Jul. 25, 2041 276,377 282,616520,053 7.50% due Dec. 25, 2041 570,129 586,466

Fannie Mae Whole Loan (callable)20,773 6.50% due Feb. 25, 2044-(Jan. 25, 2023) 29,365 23,84361,396 6.50% due May 25, 2044-(Oct. 25, 2023) 74,126 68,816

Fannie Mae Whole Loan390,892 7.00% due Feb. 25, 2044 445,334 461,739

Federal Government Loan MortgageCorporation

1,115,000 4.50% due Dec. 1, 2099 1,214,092 1,203,406Federal Home Loan Mortgage Corporation

29,245 5.00% due Jun. 1, 2018 29,380 32,00530,962 5.00% due Sep. 1, 2033 42,177 33,638

1,855,000 5.00% due Dec. 1, 2099 2,049,640 2,030,427Federal National Mortgage Association

575,000 2.92% due Aug. 25, 2021 582,713 596,8612,095,000 3.50% due Dec. 1, 2099 2,205,087 2,195,0763,480,000 6.00% due Dec. 1, 2099 3,916,697 3,903,278

Federal Republic of Brazil860,000 5.63% due Jan. 7, 2041 1,006,207 1,016,431

FHLMC Multifamily Structured Pass ThroughCertificates

180,000 4.32% due Dec. 25, 2015 199,351 199,988740,000 3.81% due Aug. 25, 2020 752,976 810,600

1,315,000 3.99% due May 25, 2021 1,373,448 1,461,391


AverageCost ($)

FairValue ($)


First Horizon Mortgage Pass-Through Trust(callable)

45,183 5.61% due Oct. 25, 2034-(Jul. 25, 2011) 52,776 43,1243,262 8.00% due Jul. 25, 2033-(Jun. 25, 2012) 4,897 3,481

First Union-Lehman Brothers216,083 6.78% due Mar. 18, 2013 232,783 224,702

Ford Credit Floorplan Master Owner Trust A335,000 1.50% due Sep. 15, 2015 345,323 341,212

Ford Motor Credit Company LLC355,000 7.50% due Aug. 1, 2012 376,174 372,523270,000 3.88% due Jan. 15, 2015 267,839 274,387

Freddie Mac (callable)15,188 7.00% due May 15, 2024-(Aug. 15, 2012) 19,863 17,305

Freddie Mac3,335 4.00% due Feb. 1, 2014 4,157 3,481

433,529 1.50% due Mar. 15, 2015 442,256 448,588980,000 2.00% due Aug. 25, 2016 935,887 1,038,867165,000 4.00% due Aug. 15, 2024 169,225 186,16260,000 5.00% due May 15, 2026 55,628 69,609

220,000 4.50% due Nov. 15, 2029 229,963 249,527400,000 4.50% due Apr. 15, 2030 392,923 461,68036,494 5.50% due Jul. 15, 2030 36,490 37,40214,385 4.50% due Oct. 15, 2031 15,145 14,769

440,000 5.00% due May 15, 2033 459,813 516,777155,000 5.00% due Jun. 15, 2033 168,508 180,40565,000 4.50% due Dec. 15, 2033 65,602 74,00585,000 6.00% due Apr. 15, 2035 90,475 95,729

213,333 4.00% due Nov. 15, 2036 232,466 238,433Freddie Mac Structured Pass-ThroughCertificates (callable)

23,478 6.50% due Sep. 25, 2043-(Jul. 25, 2015) 33,803 27,417Freeport-McMoRan Copper & Gold Inc.(callable)

405,000 8.38% due Apr. 1, 2017-(2012) 421,858 436,420GE Capital Commercial MortgageCorporation

190,000 5.31% due Oct. 10, 2015 213,026 212,08160,219 7.11% due May 15, 2033 62,126 61,73716,856 6.27% due Dec. 10, 2035 18,023 17,29150,785 5.05% due Jul. 10, 2045 52,330 52,118

Genentech, Inc.20,000 4.75% due Jul. 15, 2015 23,495 22,720

General Electric Capital Corporation275,000 5.25% due Dec. 6, 2017 297,565 322,138

General Electric Company675,000 4.65% due Oct. 17, 2021 706,483 717,568

Genworth Financial Inc., Class A (callable)555,000 6.15% due Nov. 15, 2066-(2016) 322,809 319,695

Georgia-Pacific LLC360,000 8.88% due May 15, 2031 502,017 508,431

Gilead Sciences, Inc.255,000 3.05% due Dec. 1, 2016 256,987 266,758

Gilead Sciences, Inc. (callable)795,000 4.40% due Dec. 1, 2021-(Sep. 1, 2021) 819,019 868,770

GMAC Commercial Mortgage Securities, Inc.435,000 6.87% due Apr. 15, 2034 425,465 443,775

GMAC Mortgage Corporation97,303 4.55% due Dec. 10, 2041 101,800 99,949

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GMAC Mortgage Corporation Loan Trust(callable)

603,912 4.95% due May 25, 2035-(Sep. 25, 2019) 595,895 620,650Goldman Sachs Group, Inc.

575,000 5.63% due Jan. 15, 2017 610,751 585,052660,000 6.00% due Jun. 15, 2020 708,954 691,455

Government National Mortgage Association2,963 7.50% due Feb. 15, 2032 4,321 3,541

45,066 7.00% due Dec. 15, 2034 55,126 53,215162,267 4.50% due Jun. 16, 2039 174,958 174,557600,000 3.86% due Oct. 16, 2047 580,855 655,524575,000 4.53% due Sep. 16, 2051 557,220 650,819390,063 4.70% due Sep. 20, 2061 433,955 441,386

Government National Mortgage AssociationII Reverse

324,011 4.50% due Jul. 20, 2061 340,168 359,250359,080 4.70% due Sep. 1, 2061 379,412 402,450

Great Plains Energy Inc.455,000 4.85% due Jun. 1, 2021 467,693 492,719

Greenwich Capital Commercial FundingCorp.

42,142 4.62% due Aug. 10, 2042 43,609 43,503GS Mortgage Securities Corporation II

70,244 4.96% due Aug. 10, 2038 74,219 73,331GSR Mortgage Loan Trust

80,002 2.70% due Aug. 25, 2034 65,602 73,137HART (Honda Auto Receivables Trust)

852,172 0.40% due Oct. 22, 2012 868,279 868,190Health Care REIT, Inc.

165,000 6.50% due Mar. 15, 2041 155,665 166,967Hewlett-Packard Company

485,000 4.75% due Jun. 2, 2014 529,522 522,380400,000 2.65% due Jun. 1, 2016 402,001 405,970770,000 4.65% due Dec. 9, 2021 789,637 831,503

Home Equity Asset Trust264,426 0.47% due Jul. 25, 2036 242,591 246,935

HSBC Finance Corporation170,000 6.68% due Jan. 15, 2021 166,221 178,819

Humana Inc.170,000 6.45% due Jun. 1, 2016 190,975 195,112295,000 8.15% due Jun. 15, 2038 321,143 391,069

Hungary Government115,000,000 5.50% due Feb. 12, 2014 529,612 455,794

Idearc Inc.*28,000 8.00% due Nov. 15, 2016 – –

IDEX Corporation135,000 4.50% due Dec. 15, 2020 130,251 144,517

IndyMac INDX Mortgage Loan Trust(callable)

61,756 5.36% due Dec. 25, 2035-(Sep. 25, 2019) 73,130 46,218Intel Corporation

300,000 1.95% due Oct. 1, 2016 296,619 314,441325,000 3.30% due Oct. 1, 2021 321,064 351,197

International Paper Company215,000 4.75% due Nov. 15, 2021 216,641 232,700

J.P. Morgan Chase Commercial MortgageSecurities Corp.

650,000 5.79% due Aug. 12, 2017 691,428 730,380145,000 6.09% due Sep. 12, 2017 99,508 101,717102,500 4.99% due Jul. 12, 2035 110,034 106,731


AverageCost ($)

FairValue ($)


20,000 5.21% due Dec. 12, 2034 20,849 20,042215,000 5.10% due Jan. 12, 2037 221,414 218,99981,429 4.70% due Jul. 15, 2042 80,924 83,569

504,000 5.81% due Jun. 12, 2043 545,677 560,990200,000 5.87% due Apr. 15, 2045 165,761 156,369

JPMorgan Chase & Co.895,000 4.63% due May 10, 2021 912,408 952,436

JPMorgan Chase Commerical MortgageSecurities Corp. (callable)

20,000 7.90% due Apr. 30, 2049-(2018) 19,796 23,953JPMorgan Mortgage Trust (callable)

135,000 5.08% due Sep. 25, 2015-(Oct. 25, 2016) 149,478 124,53641,788 5.32% due Jul. 25, 2035-(2018) 41,971 42,014

JPMorgan Mortgage Trust217,204 2.77% due Oct. 25, 2036 189,181 163,045

Kimberly-Clark Corporation75,000 7.50% due Nov. 1, 2018 90,835 100,242

Kraft Foods Inc.325,000 4.13% due Feb. 9, 2016 331,485 360,356

LB-UBS Commercial Mortgage Trust37,796 5.01% due Dec. 15, 2014 39,711 39,63347,031 4.47% due Oct. 15, 2029 47,785 49,448

315,000 4.63% due Oct. 15, 2029 320,176 331,476109,634 4.55% due Feb. 15, 2030 108,624 111,694

4,821 7.70% due Jul. 15, 2032 5,008 4,902Lehman Brothers Holdings Inc.

25,000 6.63% due Jan. 18, 2012 21,741 6,75040,000 6.88% due May 2, 2018 40,417 10,748

Lehman Mortgage Trust5,909 5.50% due Dec. 25, 2035 6,056 5,964

Lorillard Tobacco Company674,000 6.88% due May 1, 2020 736,241 764,771

Lowe’s Companies, Inc.280,000 3.80% due Nov. 15, 2021 286,259 300,018

Master Adjustable Rate Mortgages Trust(callable)

18,029 2.70% due Dec. 25, 2033-(Nov. 25, 2021) 16,200 14,208Master Adjustable Rate Mortgages Trust

324,101 5.40% due Jun. 25, 2035 277,417 301,899Masters Alternative Loans

7,426 8.00% due Sep. 25, 2033 8,387 7,670Medco Health Solutions, Inc.

285,000 6.13% due Mar. 15, 2013 311,403 306,736130,000 7.25% due Aug. 15, 2013 138,184 143,201

Merrill Lynch & Co., Inc.770,000 6.40% due Aug. 28, 2017 818,722 769,843

Merrill Lynch Mortgage Trust186,934 2.60% due Dec. 25, 2034 163,952 180,03816,929 4.96% due Jul. 12, 2038 18,754 17,668

279,000 5.11% due Jul. 12, 2038 265,595 299,0011,050,000 5.69% due Feb. 12, 2051 1,091,257 1,141,142

MetLife, Inc. (callable)275,000 10.75% due Aug. 1, 2039-(2034) 372,028 369,283

Mid State Trust13,531 6.01% due Aug. 15, 2037 18,027 14,12118,238 4.86% due Jul. 15, 2038 24,270 18,461

MLCC Mortgage Investors, Inc.148,943 2.15% due May 25, 2036 135,271 134,370

Montpelier Re Holdings Ltd.275,000 6.13% due Aug. 15, 2013 287,046 285,593

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Morgan Stanley730,000 6.00% due May 13, 2014 757,306 755,168740,000 6.63% due Apr. 1, 2018 806,980 745,609180,000 5.50% due Jul. 28, 2021 176,144 169,813

Morgan Stanley Capital I50,000 5.37% due Dec. 15, 2016 49,402 50,359

Morgan Stanley Dean Witter Capital100,000 6.79% due Jul. 15, 2033 98,430 102,90693,221 4.18% due Mar. 12, 2035 95,853 95,630

Mosaic Co.390,000 3.75% due Nov. 15, 2021 394,829 401,022

Motorola, Inc.270,000 5.38% due Nov. 15, 2012 276,325 283,768150,000 7.50% due May 15, 2025 180,660 177,147

Municipal Electric Authority of Georgia295,000 6.64% due Apr. 1, 2057 307,466 324,090230,000 7.06% due Apr. 1, 2057 224,447 241,369

Nalco Holding Company (callable)225,000 8.25% due May 15, 2017-(2013) 245,753 260,175

National Rural Utilities Cooperative FinanceCorp

180,000 1.90% due Nov. 1, 2015 169,698 184,948NB Capital Trust IV (callable)

25,000 8.25% due Apr. 15, 2027-(Jan. 21, 2011) 18,816 23,496NCUA Guaranteed Notes

1,153,547 1.84% due Oct. 7, 2020 1,161,410 1,182,576New Jersey Turnpike Authority

345,000 7.10% due Jan. 1, 2041 348,605 460,790News America Inc.

375,000 6.15% due Feb. 15, 2041 404,962 440,009Next Generation Network

392,272 2.40% due Dec. 8, 2020 389,558 405,892NII Capital Corp.

1,295,000 7.63% due Apr. 1, 2016 1,298,037 1,309,447Nissan Auto Receivables Owner Trust

1,103,366 0.41% due Nov. 15, 2012 1,126,815 1,124,016804,708 5.00% due Sep. 15, 2014 834,587 834,408

Nokia Corporation215,000 5.38% due May 15, 2019 209,156 220,833675,000 6.63% due May 15, 2039 621,820 658,220

Nomura Asset Acceptance Corporation48,199 4.79% due Mar. 25, 2035 60,476 46,801

O’Reilly Automotive, Inc. (callable)375,000 4.63% due Sep. 15, 2021-(Jun. 15, 2021) 370,696 401,419

Petrohawk Energy Corp. (callable)415,000 7.25% due Aug. 15, 2018-(2014) 475,800 482,741

Petróleos de Venezuela S.A.2,000,000 5.00% due Oct. 28, 2015 1,265,558 1,447,364

Philip Morris International Inc.420,000 5.65% due May 16, 2018 480,681 510,217

Prime Mortgage Trust (callable)23,320 6.00% due Feb. 25, 2034-(Jun. 25, 2022) 26,386 24,949

Prudential Commercial Mortgage Trust450,000 4.71% due Feb. 11, 2036 432,456 468,183

Reed Elsevier Capital Inc.270,000 7.75% due Jan. 15, 2014 310,960 306,989

Regency Centers LP95,000 5.88% due Jun. 15, 2017 98,153 106,325


AverageCost ($)

FairValue ($)


Renaissance Home Equity Loan Trust168,506 5.61% due May 25, 2036 153,875 121,204170,000 5.68% due Jun. 25, 2037 114,637 72,492

Republic of Argentina625,000 7.00% due Oct. 3, 2015 562,068 590,584

2,350,000 2.50% due Dec. 31, 2038 941,921 837,960Republic of Belarus

200,000 8.75% due Aug. 3, 2015 179,824 177,509Republic of Columbia

800,000 4.38% due Jul. 12, 2021 871,021 874,943Republic of Poland

300,000 5.00% due Mar. 23, 2022 293,791 307,035Republic of Turkey

1,175,000 5.13% due Mar. 25, 2022 1,179,462 1,143,2171,500,000 6.00% due Jan. 14, 2041 1,460,119 1,440,796

Republic of Venezuela590,000 9.25% due Sep. 15, 2027 404,287 435,207

Residential Accredit Loans, Inc. (callable)262,308 6.00% due Sep. 25, 2035-(Apr. 25, 2022) 183,737 153,555

Residential Asset Mortgage Products, Inc.(callable)

956 7.00% due Nov. 25, 2031-(Jan. 25, 2014) 1,349 991326,995 6.50% due Jul. 25, 2032-(Apr. 25, 2022) 324,756 339,904

Residential Funding Mortgage Securities II118,543 5.79% due Feb. 25, 2036 132,847 114,194

Rio Tinto Plc & Rio Tinto Ltd.395,000 3.75% due Sep. 20, 2021 390,150 419,282

RSB Bondco LLC100,000 5.72% due Apr. 1, 2018 106,714 113,509

Santander Drive Auto Receivables Trust962,184 0.42% due Oct. 15, 2012 998,457 980,270269,893 0.95% due Aug. 15, 2013 266,364 275,085370,000 1.84% due Nov. 17, 2014 362,738 377,708660,000 2.50% due Dec. 15, 2015 652,105 672,295250,000 2.66% due Jan. 15, 2016 244,538 254,699

Sempra Energy435,000 2.00% due Mar. 15, 2014 424,394 448,641

Sequoia Mortgage Trust (callable)294,336 0.58% due Dec. 20, 2034-(Jul. 20, 2015) 275,175 270,331

Simon Property Group, Inc.345,000 10.35% due Apr. 1, 2019 471,458 480,838

Smurfit-Stone Container Corp.175,000 7.50% due Nov. 20, 2025 159,097 167,687

Southern Copper Corporation600,000 7.50% due Jul. 27, 2035 661,643 673,164

Statoil ASA160,000 1.80% due Nov. 23, 2016 163,431 164,385390,000 3.15% due Jan. 23, 2022 398,980 408,353

Structured Adjustable Rate Mortgage Loan(callable)

25,614 5.50% due Dec. 25, 2034-(Sep. 25, 2014) 30,891 24,956122,652 5.27% due Jun. 25, 2036-(Oct. 25, 2018) 219,535 11,552

Structured Asset Securities Corporation(callable)

399,245 2.52% due Nov/ 25, 2033-(Sep. 25, 2014) 387,620 384,30428,028 6.00% due May 25, 2034-(Apr. 25, 2018) 35,996 28,547

Structured Asset Securities Corporation3,368 4.51% due Feb. 25, 2035 3,568 3,399

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AverageCost ($)

FairValue ($)


TD Ameritrade Holding Corp460,000 4.15% due Dec. 1, 2014 490,312 495,336

Telecom Italia Capital S.A.190,000 7.72% due Jun. 4, 2038 182,890 167,018

Telefonica Emisiones SAU275,000 2.58% due Apr. 26, 2013 279,023 273,437

Telefonos de Mexico, S.A.B. de C.V.290,000 5.50% due Jan. 27, 2015 328,133 320,290

Textron Inc.485,000 6.20% due Mar. 15, 2015 534,424 537,678

Time Warner Cable Inc.675,000 3.50% due Feb. 1, 2015 671,147 721,405100,000 8.38% due Mar. 15, 2023 123,800 132,332

Timken Company, The95,000 6.00% due Sep. 15, 2014 104,048 105,223

Total Capital SA200,000 4.45% due Jun. 24, 2020 216,778 226,892

Transocean Ltd.460,000 5.05% due Dec. 15, 2016 470,233 475,868315,000 6.38% due Dec. 15, 2021 321,157 342,150665,000 6.80% due Mar. 15, 2038 687,545 702,466

Tyco Electronics Group SA190,000 6.00% due Oct. 1, 2012 209,056 200,037355,000 6.55% due Oct. 1, 2017 386,475 417,168

United Continental Holdings, Inc.80,000 6.56% due Feb. 15, 2012 81,356 81,708

United States Treasury Note405,000 0.13% due Dec. 31, 2013 414,389 409,394

2,990,000 0.88% due Dec. 31, 2016 3,065,815 3,053,1171,185,000 1.38% due Dec. 31, 2018 1,202,304 1,209,7615,040,000 2.00% due Nov. 15, 2021 5,182,966 5,191,730

315,000 6.25% due Aug. 15, 2023 425,536 459,1184,380,000 3.75% due Aug. 15, 2041 5,180,675 5,243,3271,310,000 3.13% due Nov. 15, 2041 1,380,585 1,398,112

Vale Overseas Limited291,000 4.63% due Sep. 15, 2020 295,316 304,765

Valero Logistics230,000 6.05% due Mar. 15, 2013 297,665 245,601

Verizon Communications Inc.325,000 3.00% due Apr. 1, 2016 318,868 346,724

VF Corporation240,000 3.50% due Sep. 1, 2021 234,507 253,139

Virgin Media Secured Finance PLC (callable)460,000 6.50% due Jan. 15, 2018-(2014) 492,227 498,476

Wachovia Bank Commercial Mortgage Trust365,000 5.04% due Apr. 15, 2035 375,455 377,105105,000 4.11% due Jun. 15, 2035 105,069 109,335127,260 5.85% due Feb. 15, 2051 130,697 130,554

Wachovia Capital Trust III320,000 5.57% due Mar. 29, 2049 285,221 273,608

WaMu Mortgage Pass-Through Certificates(callable)

658,772 2.61% due Mar. 25, 2037-(Jun. 25, 2020) 608,946 546,34613,736 6.00% due Oct. 25, 2034-(May 25, 2028) 18,285 14,404

WaMu Mortgage Pass-Through Certificates94,540 2.48% due Jan. 25, 2033 87,157 88,170

Washington Mutual, Inc.379,436 2.45% due Oct. 25, 2033 358,277 351,963

FaceValue ($)/Number ofShares Issuer

AverageCost ($)

FairValue ($)


Watson Pharmaceuticals, Inc.660,000 5.00% due Aug. 15, 2014 719,148 720,611

Wells Fargo & Company475,000 2.63% due Dec. 15, 2016 481,838 490,500

Wells Fargo Mortgage Backed SecuritiesTrust (callable)

34,266 2.69% due Jul. 25, 2034-(Dec. 25, 2019) 33,707 33,10485,278 2.69% due Sep. 25, 2034-(Dec. 25, 2010) 82,643 76,594

258,702 6.00% due Jun. 25, 2035-(May 25, 2016) 239,884 240,75498,968 2.72% due Oct. 25, 2035-(Aug. 25, 2016) 101,352 36,750

216,595 2.68% due Sep. 25, 2034-(Mar. 25, 2017) 199,807 203,464216,021 5.05% due Mar. 25, 2036-(2017) 226,000 210,201200,874 2.69% due Oct. 25, 2035-(Aug. 25, 2017) 170,850 164,524162,888 2.72% due Mar. 25, 2035-(Dec. 25, 2017) 143,915 124,95160,052 2.73% due Jul. 25, 2036-(Mar. 25, 2018) 45,117 44,34251,654 5.50% due Jan. 25, 2036-(Feb. 25, 2019) 51,015 50,317

Wells Fargo Mortgage Backed SecuritiesTrust

378,270 2.62% due Dec. 25, 2034 350,304 355,698186,187 2.71% due Dec. 25, 2034 175,337 171,55832,616 5.50% due Mar. 25, 2036 32,408 32,779

140,085 5.77% due Apr. 25, 2036 119,687 123,29140,000 6.00% due Jul. 25, 2037 40,164 34,490

Weyerhaeuser Company125,000 7.38% due Oct. 1, 2019 140,213 141,758

Williams Partners LP685,000 7.25% due Feb. 1, 2017 794,605 832,370

Willis Group Holdings Limited385,000 4.13% due Mar. 15, 2016 381,098 395,496

World Omni Auto Receivables Trust645,509 0.41% due Nov. 15, 2012 654,124 658,892

WPP Finance UK Corp.210,000 8.00% due Sep. 15, 2014 235,253 238,132

XL Group Plc630,000 5.25% due Sep. 15, 2014 668,068 678,440

Yum! Brands, Inc.435,000 4.25% due Sep. 15, 2015 465,931 477,093

172,776,866 175,418,585

TOTAL BOND AND DEBENTUREINSTRUMENTS 189,100,283 191,102,604

EQUITIES – 0.0%28 GenOn Energy, Inc. – 75


Currency Forward Contracts – 0.9% 1,763,598OTHER ASSETS, LESS LIABILITIES – (1.2)% (2,379,026)

NET ASSETS – 100.0% 190,487,251


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Portfolio Advisor: Logan Circle Partners, L.P.-For equities, all common shares unless otherwise noted.The accompanying notes are an integral part of these financial statements.

CURRENCY FORWARD CONTRACTS


December 31, 2011 ($)

Canadian ($)Appreciation/(Depreciation)

Jan. 4, 2012 U.S. Dollar 200,000 Brazilian Real 361,900 197,631 6,128Jan. 12, 2012 British Pound 1,068,792 U.S. Dollar 1,653,688 1,685,057 6,578Jan. 12, 2012 Canadian Dollar 171,027,799 U.S. Dollar 166,070,592 169,281,869 1,745,930Jan. 12, 2012 Mexican Peso 13,839,500 U.S. Dollar 1,000,000 1,019,992 (9,556)Jan. 12, 2012 Turkish Lira 7,886,358 U.S. Dollar 4,178,604 4,277,827 (15,438)Jan. 12, 2012 U.S. Dollar 4,661,601 British Pound 3,000,612 4,748,391 833Jan. 12, 2012 U.S. Dollar 2,974,662 European Euro 2,270,899 2,994,466 36,110Jan. 12, 2012 U.S. Dollar 1,025,035 Japanese Yen 79,960,901 1,058,840 (14,538)Jan. 12, 2012 U.S. Dollar 660,009 Mexican Peso 9,116,806 664,864 7,551

1,763,598

The currency forward contracts outstanding at December 31, 2011 are placed with a financial institution with a credit rating of A by Standard & Poor’s.




Bond and Debenture InstrumentsBrazilian Real – 0.4British Pound 1.3 2.0Chile Peso 0.3 –Columbia Peso 1.3 –European Euro 1.1 1.4Indian Rupee – 0.7Japanese Yen 0.5 –Mexican Peso 0.6 0.5Norwegian Krone 0.5 0.5Peruvian Nuevo Sol 0.5 –Philippine Peso – 0.5Polish Zloty 0.6 1.0South African Rand 0.5 0.5Uraguayan Peso 1.0 –U.S. Dollar 92.1 85.5

Equities 0.0 0.0Money Market Instruments – 23.1Currency Forward Contracts 0.9 2.0

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The table below summarizes the Fund’s exposure to interestrate risk by the remaining term to maturity of the Fund’sportfolio of bonds and debenture instruments.


Less than 1 year $ 6,938,738 $ 1,507,567

1-3 years 12,573,494 8,074,000

3-5 years 26,627,757 17,957,179

5-10 years 48,683,243 32,564,805

H 10 years 96,279,372 57,686,926

Total $191,102,604 $117,790,477


As at December 31, 2011, had prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift inthe yield curve and all other variables held constant, NetAssets would have decreased or increased by approximately$2,585,715, or 1.4% of total Net Assets (December 31, 2010 –$1,548,866, or 1.2% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.








U.S. Dollar 51,020,306 26.8 31,058,066 24.5

Turkish Lira 4,286,579 2.3 – –

Columbia Peso 2,494,500 1.3 – –

Mexican Peso 2,134,475 1.1 448,340 0.4

Uraguayan Peso 1,858,002 1.0 – –

Polish Zloty 1,194,997 0.6 1,265,309 1.0

Peruvian New Sol 987,529 0.5 – –

Norwegian Krone 933,061 0.5 1,624,476 1.3

South African Rand 879,243 0.5 674,167 0.5

Chile Peso 661,602 0.3 – –

Hungary Forint 515,477 0.3 – –

Swiss Franc 7,604 0.0 7,455 0.0

British Pound (66,645) 0.0 (14,742) 0.0

Japanese Yen (70,005) 0.0 (583,372) (0.5)

Brazilian Real (197,631) (0.1) – –

European Euro (944,608) (0.5) 823,836 0.7

Swedish Krona – – 938,387 0.7

Indian Rupee – – 884,537 0.7

Philippine Peso – – 645,916 0.5

Australian Dollar – – 193,224 0.2

New Russian Ruble – – 78 0.0

Total 65,694,486 34.6 37,965,677 30.0

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$6,569,449, or 3.5% of total Net Assets (December 31, 2010 –$3,796,568, or 3.0% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.










A– to AAA+ 65.8 65.9 43.9 40.8

B– to BBB+ 30.1 30.3 25.1 23.3

C– to CCC+ 1.7 1.7 2.3 2.2

D– To DDD+ – – 0.1 0.1

Unrated 2.4 2.4 28.6 26.6

Total 100.0 100.3 100.0 93.0






Payable for currency spot contracts – 153

Payable for currency forward contracts 39,532 74,919

$51,707,044 $26,751,167



December 31, 2011


Equities $75 $ – $ – $ 75

Bond and Debenture Instruments – 191,102,604 – 191,102,604

Currency Forward Contracts – Assets – 1,803,130 – 1,803,130

75 192,905,734 – 192,905,809


$75 $192,866,202 $ – $192,866,277

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December 31, 2010


Equities $12,117 $ – $ – $ 12,117



Currency Forward Contracts – Assets – 2,555,564 – 2,555,564

12,117 149,565,459 – 149,577,576

Currency Spot Contracts – Liabilities (153) – – (153)


$11,964 $149,490,540 $ – $149,502,504


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Scotia Private Strategic Balanced Pool(formerly, Pinnacle Strategic Balanced Fund)


2011 2010

ASSETSInvestments at fair value $40,680,647 $54,856,864Cash 297,638 70,823Accrued investment income 123,996 204,544Receivable for securities sold 119,306 867,999Subscriptions receivable 196 35,582Receivable for currency spot contracts 47 1Accounts receivable – 1,785

41,221,830 56,037,598

LIABILITIESPayable for securities purchased 190,735 867,999Redemptions payable 8,315 75,886Accrued expenses 680 73,663Payable for currency spot contracts 21 –

199,751 1,017,548

Net Assets $41,022,079 $55,020,050

NET ASSETS PER SERIESPinnacle Series Units $40,939,315 $54,937,743Series F Units $ 82,764 $ 82,307

UNITS OUTSTANDINGPinnacle Series Units 2,927,327 3,568,324Series F Units 5,846 5,262

NET ASSETS PER UNITPinnacle Series Units $ 13.99 $ 15.40Series F Units $ 14.16 $ 15.64


2011 2010

INVESTMENT INCOMEDividends $ 592,238 $ 622,697Interest 680,617 919,849Securities lending 4,539 2,812Foreign withholding taxes/tax reclaims (27,395) (8,587)Other income 548 193

1,250,547 1,536,964

EXPENSESManagement fees (note 5) 795 695Harmonized Sales Tax/Goods and Services Tax 17,161 5,186Audit fees 17,374 19,075Independent Review Committee fees 2,943 2,727Custodian fees 42,091 8,636Filing fees 15,149 15,152Legal fees 2,912 3,806Unitholder reporting costs 14,236 16,514Unitholder administration and service fees 84,769 86,374Overdraft charges 2 –


192,221 155,528


Net realized gain (loss) on investments sold 1,984,024 737,284Net gain (loss) foreign exchange 1,264 (800)Transaction costs (24,419) (10,510)Change in unrealized appreciation (depreciation) of investments (6,428,895) 3,090,309Change in unrealized appreciation (depreciation) of currency spots 25 1

Net gain (loss) on investments and transaction costs (4,468,001) 3,816,284

Increase (decrease) in Net Assets from operations $(3,409,675) $5,197,720

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(3,402,953) $5,190,961Series F Units $ (6,722) $ 6,759

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (1.04) $ 1.37Series F Units $ (1.27) $ 1.42


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 54,937,743 $ 56,866,809Series F Units 82,307 13,748

55,020,050 56,880,557

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (3,402,953) 5,190,961Series F Units (6,722) 6,759

(3,409,675) 5,197,720


Pinnacle Series Units (1,086,144) (1,359,804)Series F Units (1,009) (1,066)

(1,087,153) (1,360,870)


Pinnacle Series Units 5,074,355 5,806,186Series F Units 7,200 81,155

Reinvested distributionsPinnacle Series Units 1,083,782 1,353,509Series F Units 988 1,066

Payments on redemptionPinnacle Series Units (15,667,468) (12,919,918)Series F Units – (19,355)

(9,501,143) (5,697,357)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (13,998,428) (1,929,066)Series F Units 457 68,559

(13,997,971) (1,860,507)

NET ASSETS – END OF PERIODPinnacle Series Units 40,939,315 54,937,743Series F Units 82,764 82,307

$ 41,022,079 $ 55,020,050

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Portfolio Advisor: Gryphon Investment Counsel Inc.



Number ofShares Issuer

AverageCost ($)

FairValue ($)

EQUITIES – 57.5%Canadian Equities – 43.6%Energy – 12.9%

4,820 Calfrac Well Services Ltd. 72,719 136,9365,815 Cameco Corporation 138,825 106,822

29,455 Canadian Natural Resources Ltd. 893,873 1,121,0577,940 Canadian Oil Sands Ltd. 241,567 184,367

16,230 Cenovus Energy Inc. 457,997 549,06110,645 Crescent Point Energy Corp. 374,786 477,21511,360 Husky Energy Inc. 335,805 277,9795,870 Imperial Oil Ltd. 293,134 266,322

18,190 Petrobank Energy and Resources Ltd. 370,296 192,45011,170 Petrominerales Ltd. 311,000 183,74731,830 Suncor Energy, Inc. 1,080,598 935,16547,500 Talisman Energy Inc. 780,873 616,5507,290 Trican Well Service Ltd. 130,266 127,648

17,460 Trinidad Drilling Ltd. 119,473 134,966

5,601,212 5,310,285

Materials – 7.1%7,305 Agrium Inc. 386,955 498,932

22,390 First Quantum Minerals Ltd. 551,215 447,80026,780 HudBay Minerals, Inc. 231,806 270,7462,865 Inmet Mining Corporation 137,023 187,572

48,740 Lundin Mining Corporation 370,424 188,13615,325 Potash Corporation of Saskatchewan Inc. 609,577 645,02919,240 Teck Resources Ltd., Class B 500,648 689,754

2,787,648 2,927,969

Industrials – 3.1%4,285 Canadian Pacific Railway Limited 218,343 295,279

16,660 Finning International Inc. 377,196 368,8528,495 SNC-Lavalin Group Inc. 376,772 432,8206,470 Stantec Inc. 170,500 178,378

1,142,811 1,275,329

Consumer Discretionary – 2.6%24,920 Gildan Activewear Inc. 491,481 476,96910,375 Magna International Inc. 400,964 351,9206,255 Quebecor Inc., Class B 133,684 215,985

1,026,129 1,044,874

Consumer Staples – 1.3%16,805 Alimentation Couche-Tard Inc., Class B 288,915 531,878

Financials – 13.3%16,470 Bank of Montreal 792,104 919,52020,670 Bank of Nova Scotia, The 919,437 1,049,41612,410 Canadian Imperial Bank of Commerce 781,847 915,2383,915 Home Capital Group Inc. 229,534 192,227

34,130 Manulife Financial Corporation 897,040 369,6286,110 National Bank of Canada 298,073 440,775

11,695 Power Financial Corporation 351,544 298,45624,105 Royal Bank of Canada 1,139,039 1,251,532

5,408,618 5,436,792

Information Technology – 1.8%26,735 Celestica Inc. 282,947 199,97819,380 CGI Group Inc., Class A 210,639 371,51511,265 Research In Motion Limited 735,298 166,271

1,228,884 737,764

Telecommunication Services – 1.5%15,755 Rogers Communications, Inc., Class B 470,121 618,226

TOTAL CANADIAN EQUITIES 17,954,338 17,883,117


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES – 13.9%United States – 5.9%Materials – 0.4%

1,600 Praxair, Inc. 159,926 174,174

Industrials – 1.5%2,700 Danaher Corporation 140,936 129,3951,850 Dover Corporation 114,965 109,4302,550 Honeywell International Inc. 145,866 141,1201,405 Jacobs Engineering Group, Inc. 58,988 58,0722,550 Wabtec Corporation 159,877 181,647

620,632 619,664

Consumer Discretionary – 1.1%3,200 Coach, Inc. 182,405 199,0322,335 TJX Companies, Inc., The 118,094 153,5811,400 Yum! Brands, Inc. 73,736 84,167

374,235 436,780

Consumer Staples – 0.3%2,050 Bunge Limited 146,898 119,381

Health Care – 1.0%2,050 Johnson & Johnson 129,981 136,9035,250 ResMed Inc. 160,646 135,8031,765 Varian Medical Systems, Inc. 105,891 120,694

396,518 393,400

Financials – 0.5%2,750 American Express Company 132,165 132,1282,300 JPMorgan Chase & Co. 99,388 77,889

231,553 210,017

Information Technology – 1.1%1,850 Anixter International Inc. 125,244 112,4081,690 Cognizant Technology Solutions Corporation 114,260 110,5372,050 Fiserv, Inc. 125,289 122,6181,910 QUALCOMM, Inc. 108,151 106,266

472,944 451,829

TOTAL UNITED STATES 2,402,706 2,405,245

France – 1.3%1,249 Atos Origin SA 64,241 55,6732,230 BNP Paribas 144,780 88,9381,466 Schneider Electric SA 72,085 78,052

466 SEB SA 42,250 35,589757 Technip SA 49,207 72,079

1,635 Teleperformance 58,984 36,9382,411 Total SA 148,185 125,369

466 Vallourec SA 43,453 30,684

623,185 523,322

Germany – 1.1%989 Adidas-Salomon AG 49,370 65,535

1,697 Fresenius SE & Co. KGaA 146,962 159,9791,230 MTU Aero Engines Holding AG 49,500 80,178

787 Siemens AG 69,744 76,6811,836 Stada Arzneimittel AG 52,910 46,540

529 Wacker Chemie AG 73,731 43,347

442,217 472,260

Hong Kong – 0.7%24,500 Kingboard Chemicals Holdings Limited 86,118 74,0022,900 Kingboard Chemical Holdings Ltd. Warrants

HKD 40.00 Oct. 31, 2012* – 9560,000 Li & Fung Limited 101,106 112,535

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Scotia Private Strategic Balanced Pool (Continued)(formerly, Pinnacle Strategic Balanced Fund)


-For equities, all common shares unless otherwise noted.The accompanying notes are an integral part of these financial statements.


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Hong Kong (cont’d)

24,500 Yue Yuen Industrial (Holdings) Limited 74,884 78,857

262,108 265,489

Italy – 0.1%6,104 David Campari – Milano SpA 28,485 41,332

Japan – 2.0%8,000 Asahi Glass Company, Limited 71,129 68,5951,500 Bridgestone Corporation 34,045 34,5902,000 Hamamatsu Photonics KK 41,872 71,2081,900 Honda Motor Co., Ltd. 65,231 58,9432,800 IBIDEN Co., Ltd. 97,066 56,6092,800 Komatsu Ltd. 52,244 66,5217,500 Kuraray Co., Ltd. 87,112 108,5592,500 Nabtesco Corporation 54,438 46,2853,200 Nikon Corporation 58,540 72,4882,000 Seven & I Holdings Co., Ltd. 50,495 56,7313,700 Stanley Electric Co., Ltd. 79,516 55,3052,100 Terumo Corporation 112,359 100,6354,000 Toray Industries Inc. 29,518 29,141

833,565 825,610

Netherlands – 1.2%1,969 Gemalto NV 76,581 97,1572,078 Heineken NV 91,550 97,731

353 Imtech NV 9,384 9,27311,442 ING Groep NV 120,028 83,068

783 Nutreco Holding NV 35,285 52,3812,671 Unilever NV 86,181 93,4472,570 Wolters Kluwer NV 55,032 45,079

474,041 478,136

Singapore – 0.1%26,000 Olam International Limited 50,383 43,326

Spain – 0.3%1,289 Industria de Diseno Textil SA 73,493 107,291

Sweden – 0.3%1,929 Getinge AB Class B 46,183 49,6472,919 Hexagon AB 35,499 44,1874,516 Telefonaktiebolaget LM Ericsson, Class B 46,376 46,736

128,058 140,570

Number ofShares/Face Value ($) Issuer

AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Switzerland – 0.6%

1,373 Adecco SA 67,019 58,30285 Galenica AG 47,367 50,56711 Lindt & Spruengli AG 24,393 33,311

2,082 Novartis AG 104,600 121,179

243,379 263,359

United Kingdom – 0.3%1,608 Intertek Group PLC 31,878 51,5955,102 Serco Group PLC 45,038 38,2351,243 Weir Group PLC, The 22,940 39,743

99,856 129,573

TOTAL FOREIGN EQUITIES 5,661,476 5,695,513

TOTAL EQUITIES 23,615,814 23,578,630

BOND AND DEBENTURE INSTRUMENTS – 41.7%Federal Bonds – 41.2%

Canada Housing Trust No. 12,550,000 3.60% due Jun. 15, 2013 2,640,831 2,642,568

Government of Canada2,500,000 3.50% due Jun. 1, 2013 2,599,125 2,588,6344,150,000 2.50% due Sep. 1, 2013 4,236,279 4,255,3643,125,000 4.25% due Jun. 1, 2018 3,359,781 3,645,3952,550,000 5.75% due Jun. 1, 2029 3,332,850 3,764,285

16,168,866 16,896,246

Corporate Bonds – 0.5%Brilliant Power Funding Corporation*

64,089 5.67% due May 31, 2026 68,354 72,445Pearson International Fuel Facilities Corporation*

72,820 5.09% due Mar. 9, 2032 72,700 77,409Royal Bank Scotland*

86,000 6.67% due Oct. 05,2017 82,963 55,917

224,017 205,771



Currency Spot Contracts – 0.0% 26OTHER ASSETS, LESS LIABILITIES – 0.8% 341,406

NET ASSETS – 100.0% 41,022,079


CURRENCY SPOT CONTRACTS


December 31, 2011 ($)


(Depreciation)

Jan. 3, 2012 Canadian Dollar 9,155 Hong Kong Dollar 69,818 9,159 (3)Jan. 4, 2012 Canadian Dollar 4,477 Hong Kong Dollar 34,262 4,494 (18)Jan. 4, 2012 Japanese Yen 689,222 Canadian Dollar 9,081 9,078 44Jan. 5, 2012 Japanese Yen 690,771 Canadian Dollar 9,143 9,140 3

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The currency spot contracts outstanding at December 31, 2011 are placed with a financial institution with a credit rating of AA� by Standard & Poor’s.

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(formerly, Pinnacle Strategic Balanced Fund)







Canadian EquitiesEnergy 12.9 16.2Materials 7.1 11.9Industrials 3.1 4.1Consumer Discretionary 2.6 6.6Consumer Staples 1.3 1.6Health Care – 1.0Financials 13.3 14.0Information Technology 1.8 3.6Telecommunication Services 1.5 1.3

United States Equities 5.9 –France Equities 1.3 –Germany Equities 1.1 –Hong Kong Equities 0.7 –Italy Equities 0.1 –Japan Equities 2.0 –Netherlands Equities 1.2 –Singapore Equities 0.1 –Spain Equities 0.3 –Sweden Equities 0.3 –Switzerland Equities 0.6 –United Kingdom Equities 0.3 –Bond and Debenture Instruments 41.7 37.2Money Market Instruments – 2.2Currency Spot Contracts 0.0 0.0

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The table below summarizes the Fund’s exposure to interestrate risk by the remaining term to maturity of the Fund’sportfolio of bond and debenture instruments.


Less than 1 year $ – $ –

1-3 years 9,486,566 12,959,337

3-5 years – 48,533

5-10 years 3,701,312 3,102,087

H 10 years 3,914,139 4,373,097

Total $17,102,017 $20,483,054


As at December 31, 2011, had the prevailing interest ratesincreased or decreased by 0.25%, assuming a parallel shift inthe yield curve and all other variables held constant, NetAssets would have decreased or increased by approximately$208,796, or 0.5% of total Net Assets (December 31, 2010 –$244,174, or 0.4% of total Net Assets). In practice, actualresults may differ from this sensitivity analysis and thedifference could be material.








U.S. Dollar 2,405,245 5.9 781 0.0

European Euro 1,622,340 4.0 2,182,734 4.0

Japanese Yen 843,829 2.1 1,160,168 2.1

Swiss Franc 263,359 0.6 309,660 0.5

Hong Kong Dollar 251,836 0.6 549,934 1.0

Swedish Krona 140,570 0.3 161,363 0.3

British Pound 129,573 0.3 215,500 0.4

Singapore Dollar 43,326 0.1 60,803 0.1

Total 5,700,078 13.9 4,640,943 8.4

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$570,008, or approximately 1.4% of total Net Assets (Decem-ber 31, 2010 – $464,094, or approximately 0.8% of total NetAssets). In practice, actual results may differ from thissensitivity analysis and the difference could be material.

Other price risk (note 3)

The table below indicates the estimated impact on the NetAssets of the Fund due to a 10% change in the respectivemarket indices, with all other variables held constant. TheFund’s historical sensitivity measure may not be representa-tive of its future sensitivity measure, and accordingly, theimpact on Net Assets could be materially different.

BenchmarkDecember 31,

2011December 31,

2010December 31,

2011December 31,

2010

Impact on Net Assets ($) Impact on Net Assets (%)

S&P/TSX Composite

Index – 40%, DEX

Universe Bond

Index – 50%, Morgan

Stanley Capital

Index (MSCI) All

Country World

(ACWI) ex-Canada

Index – 10%

Blended Benchmark

Impact (product of all

benchmarks above) 4,676,517 5,997,185 11.4 10.9








A– to AAA+ 99.7 41.6 98.5 36.9

B– to BBB+ 0.3 0.1 0.3 0.1

C– to CCC+ – – 0.3 0.1

Unrated – – 0.9 0.3

Total 100.0 41.7 100.0 37.4


The table below summarizes a maturity analysis cash flowsassociated with the maturities of the Fund’s financialliabilities:



Accounts payable and accrued liabilities $199,730 $1,017,548

Payable for currency spot contracts 21 –

$199,751 $1,017,548

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December 31, 2011


Equities $20,333,441 $ 3,245,094 $ – $23,578,535

Warrants – 95 – 95


Currency Spot Contracts – Assets 47 – – 47

$20,333,488 $20,347,206 $ – $40,680,694


$20,333,467 $20,347,206 $ – $40,680,673

December 31, 2010


Equities $31,857,123 $ 1,314,790 $ – $33,171,913

Warrants 3,060 – 3,060



Currency Spot Contract – Assets 1 – – 1

$31,860,184 $22,996,681 $ – $54,856,865


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Scotia Private Canadian Value Pool(formerly, Pinnacle Canadian Value Equity Fund)


2011 2010

ASSETSInvestments at fair value $94,716,256 $110,516,565Cash 30,732 8,478Accrued investment income 275,879 271,019Receivable for securities sold 533,743 –Subscriptions receivable 39,363 241,018Accounts receivable – 2,221

95,595,973 111,039,301

LIABILITIESRedemptions payable 51,729 235,766Accrued expenses 603 96,107

52,332 331,873

Net Assets $95,543,641 $110,707,428

NET ASSETS PER SERIESPinnacle Series Units $85,322,040 $ 98,867,186Series F Units $ 290,711 $ 327,269Series I Units $ 9,930,890 $ 11,512,973

UNITS OUTSTANDINGPinnacle Series Units 5,031,949 5,022,658Series F Units 17,222 16,661Series I Units 573,012 572,260



2011 2010

INVESTMENT INCOMEDividends $ 2,373,742 $ 2,458,360Interest 7,495 57,663Securities lending 5,615 2,811Foreign withholding taxes/tax reclaims (572) (1,164)Other income 81 –

2,386,361 2,517,670

EXPENSESManagement fees (note 5) 2,858 3,464Harmonized Sales Tax/Goods and Services Tax 19,726 10,786Audit fees 17,506 20,325Independent Review Committee fees 3,016 2,727Custodian fees 5,562 17,196Filing fees 16,439 16,442Legal fees 3,015 3,806Unitholder reporting costs 22,549 28,131Unitholder administration and service fees 136,220 127,743Overdraft charges 261 479


223,199 228,749


Net realized gain (loss) on investments sold 5,527,605 7,378,127Net gain (loss) foreign exchange 27 (6,553)Transaction costs (57,558) (54,122)Change in unrealized appreciation (depreciation) of investments (20,290,327) 6,312,797



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(11,392,157) $15,215,750Series F Units $ (35,431) $ 48,309Series I Units* $ (1,229,503) $ 655,111

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (2.32) $ 2.61Series F Units $ (2.33) $ 2.49Series I Units* $ (2.20) $ 1.12


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 98,867,186 $109,820,949Series F Units 327,269 286,282Series I Units* 11,512,973 –

110,707,428 110,107,231

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (11,392,157) 15,215,750Series F Units (35,431) 48,309Series I Units* (1,229,503) 655,111

(12,657,091) 15,919,170


Pinnacle Series Units (1,842,793) (2,164,886)Series F Units (3,179) (3,601)Series I Units* (226,488) (9,773)

(2,072,460) (2,178,260)

UNIT TRANSACTIONSPinnacle Series Units 16,004,682 15,076,548Series F Units 105,976 230,665Series I Units* 2,660,453 11,469,662

Reinvested distributionsPinnacle Series Units 1,823,197 2,144,644Series F Units 3,179 3,601Series I Units* 226,488 9,773


(434,236) (13,140,713)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (13,545,146) (10,953,763)Series F Units (36,558) 40,987Series I Units* (1,582,083) 11,512,973

(15,163,787) 600,197

NET ASSETS – END OF PERIODPinnacle Series Units 85,322,040 98,867,186Series F Units 290,711 327,269Series I Units* 9,930,890 11,512,973

$ 95,543,641 $110,707,428


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STATEMENT OF INVESTMENT PORTFOLIOAs at December 31, 2011Number ofShares Issuer

AverageCost ($)

FairValue ($)

EQUITIES – 98.3%Energy – 21.9%

133,100 Canadian Natural Resources Ltd. 2,792,332 5,065,78680,300 Cenovus Energy Inc. 1,913,561 2,716,54957,200 EnCana Corporation 1,402,365 1,080,508

127,600 Nexen Inc. 2,595,633 2,067,12033,800 Penn West Petroleum Ltd. 527,699 681,408

207,464 Suncor Energy, Inc. 4,817,184 6,095,292246,600 Talisman Energy Inc. 2,782,107 3,200,868

16,830,881 20,907,531

Materials – 23.1%58,500 Agrium Inc. 3,166,903 3,995,550

166,200 Barrick Gold Corporation 7,284,888 7,666,80697,590 Cascades Inc. 389,756 431,348

7,100 Domtar Corporation 497,054 578,01133,700 Methanex Corporation 648,388 783,18884,400 Potash Corporation of Saskatchewan Inc. 3,288,585 3,552,39666,000 Quadra FNX Mining Ltd. 908,187 995,280

411,500 Sherritt International Corporation 1,394,975 2,238,56052,200 Teck Resources Ltd., Class B 2,353,281 1,871,370

19,932,017 22,112,509

Industrials – 5.3%36,200 Canadian National Railway Company 1,444,415 2,898,53431,300 Canadian Pacific Railway Limited 1,785,151 2,156,883

3,229,566 5,055,417

Consumer Discretionary – 6.2%13,700 Canadian Tire Corporation, Limited, Class A 638,196 899,40583,200 Gildan Activewear Inc. 1,695,697 1,592,44862,100 Magna International Inc. 2,874,847 2,106,432

104,800 RONA inc. 1,272,009 1,020,75212,200 Thomson Reuters Corporation 433,280 331,718

6,914,029 5,950,755

Consumer Staples – 1.5%108,100 Maple Leaf Foods Inc. 1,153,727 1,169,642

5,600 Metro Inc., Class A 214,853 302,288

1,368,580 1,471,930

Financials – 29.8%137,300 Bank of Nova Scotia, The 4,750,474 6,970,72175,200 Canadian Imperial Bank of Commerce 4,367,460 5,546,000

8,800 Genworth MI Canada Inc. 233,330 180,312121,780 Manulife Financial Corporation 2,646,895 1,318,877129,100 Royal Bank of Canada 5,210,307 6,702,872101,200 Toronto-Dominion Bank, The 4,723,249 7,716,500

21,931,715 28,435,282

Information Technology – 1.0%61,900 Celestica Inc. 488,741 463,01231,700 Research In Motion Limited 1,758,325 467,892

2,247,066 930,904

Telecommunication Services – 8.3%14,400 BCE Inc. 413,389 611,42484,500 Rogers Communications, Inc., Class B 2,615,381 3,315,78173,600 TELUS Corporation Non-Voting, Class A 2,465,051 4,015,616

5,493,821 7,942,821

Index Units – 1.2%65,000 iShares S&P/TSX 60 Index Fund 1,091,053 1,109,550

TOTAL EQUITIES 79,038,728 93,916,699


AverageCost ($)

FairValue ($)

MONEY MARKET INSTRUMENTS – 0.8%800,000 Government of Canada Treasury Bills

0.79% to 0.88% due fromJan. 5, 2012 to Mar. 1, 2012 799,368 799,557



NET ASSETS – 100.0% 95,543,641




Energy 21.9 27.0Materials 23.1 18.1Industrials 5.3 8.4Consumer Discretionary 6.2 4.6Consumer Staples 1.5 1.9Financials 29.8 29.6Information Technology 1.0 3.0Telecommunication Services 8.3 6.4Index Units 1.2 0.2Money Market Instruments 0.8 0.6

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Scotia Private Canadian Value Pool (Continued)(formerly, Pinnacle Canadian Value Equity Fund)

Portfolio Advisor: Scheer, Rowlett & Associates Investment Management Ltd.




The table below indicates the currency to which the Fundhad significant exposure, net of the impact of foreign cur-rency forward contracts and foreign currency spot contracts,if any, based on the fair value of the Fund’s financialinstruments.






U.S. Dollar 5,837 0.0 – –

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$584 or approximately 0.0% of total Net Assets, (December 31,2010 - $0, or approximately 0.0% of total Net Assets). Inpractice, actual results may differ from this sensitivity analy-sis and the difference could be material.


The table below indicates the estimated impact on the NetAssets of the Fund due to a 10% change in the respectivemarket index, with all other variables held constant. TheFund’s historical sensitivity measure may not be representa-tive of its future sensitivity measure, and accordingly, theimpact on Net Assets could be materially different.


2011December 31,

2010December 31,

2011December 31,

2010


S&P/TSX Composite

Index 10,223,170 11,513,573 10.7 10.4





Accounts payable and accrued liabilities $52,332 $331,873


The tables below illustrate the classification of the Fund’sfinancial instruments within the fair value hierarchy as atDecember 31, 2011 and 2010, respectively.December 31, 2011


Equities $93,916,699 $ – $ – $93,916,699

Money Market Instruments – 799,557 – 799,557

$93,916,699 $799,557 $ – $94,716,256

December 31, 2010


Equities $109,817,413 $ – $ – $109,817,413


$109,817,413 $699,152 $ – $110,516,565


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SScotia Private Canadian Value Pool (Continued)(formerly, Pinnacle Canadian Value Equity Fund)


Scotia Private Canadian Mid Cap Pool(formerly, Pinnacle Canadian Mid Cap Equity Fund)


2011 2010

ASSETSInvestments at fair value $41,281,700 $47,090,559Cash 23,336 63,341Accrued investment income 71,478 60,236Receivable for securities sold 375,742 226,526Subscriptions receivable 13,148 49,143Accounts receivable – 2,018

41,765,404 47,491,823

LIABILITIESPayable for securities purchased 469,094 –Redemptions payable 18,126 38,939Accrued expenses 292 64,656

487,512 103,595

Net Assets $41,277,892 $47,388,228

NET ASSETS PER SERIESPinnacle Series Units $36,688,862 $41,870,112Series F Units $ 36,349 $ 23,482Series I Units $ 4,552,681 $ 5,494,634




2011 2010

INVESTMENT INCOMEDividends $ 696,193 $ 613,455Interest 33,106 315,242Capital gains distributions received 1,184 –Securities lending 14,525 22,393Other income 560 –

745,568 951,090



153,004 180,946


Net realized gain (loss) on investments sold 1,427,718 4,923,155Net gain (loss) foreign exchange (76) (173)Transaction costs (199,005) (98,991)Change in unrealized appreciation (depreciation) of investments (8,872,603) 5,526,530



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(6,299,851) $10,344,663Series F Units $ (4,611) $ 7,153Series I Units* $ (746,940) $ 768,849



2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $41,870,112 $ 49,528,942Series F Units 23,482 40,715Series I Units* 5,494,634 –

47,388,228 49,569,657

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (6,299,851) 10,344,663Series F Units (4,611) 7,153Series I Units* (746,940) 768,849

(7,051,402) 11,120,665


Pinnacle Series Units (402,633) (788,357)Series F Units (91) (444)Series I Units* (57,619) (13,263)

(460,343) (802,064)


Pinnacle Series Units 10,855,182 5,525,958Series F Units 26,888 43,340Series I Units* 740,990 5,399,496

Reinvested distributionsPinnacle Series Units 400,041 783,698Series F Units 91 444Series I Units* 57,619 13,263

Payments on redemptionPinnacle Series Units (9,733,989) (23,524,792)Series F Units (9,410) (67,726)Series I Units* (936,003) (673,711)

1,401,409 (12,500,030)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (5,181,250) (7,658,830)Series F Units 12,867 (17,233)Series I Units* (941,953) 5,494,634

(6,110,336) (2,181,429)


$41,277,892 $ 47,388,228


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AverageCost ($)

FairValue ($)


160,600 Advantage Oil & Gas Ltd. 776,641 677,73298,000 BlackPearl Resources Inc. 353,128 402,78019,300 Gibson Energy Inc. 360,434 367,08624,700 MEG Engery Corporation 881,926 1,018,381

307,400 Midway Energy Ltd. 936,849 992,90243,900 Pason Systems Inc. 577,030 524,60574,700 Peyto Exploration & Development Corporation 1,470,400 1,815,210

164,000 Pinecrest Energy Inc 297,816 388,68055,508 Poseidon Concepts Corp. 570,004 691,07571,100 Secure Energy Services Inc. 481,219 487,74626,059 ShawCor Ltd. Class A 706,413 748,67590,600 Surge Energy, Inc. 645,350 807,24652,900 Tourmaline Oil Corp. 1,515,475 1,408,727

143,600 Uranium One, Inc. 276,494 307,30455,100 Veresen Inc. 806,256 842,479

119,300 Wild Stream Exploration Inc. 1,053,905 1,064,156

11,709,340 12,544,784

Materials – 21.6%66,245 Alamos Gold Inc. 964,763 1,157,963

102,633 AuRico Gold Inc. 981,625 837,485335,000 Capstone Mining Corp. 866,651 927,95048,600 First Majestic Silver Corp. 847,584 831,54649,500 Ivanhoe Mines Ltd. 759,279 892,98011,425 Labrador Iron Ore Royalty Income Fund 421,022 426,838

131,000 Lundin Mining Corporation 472,645 505,66049,100 Major Drilling Group International Inc. 602,758 759,08699,100 New Gold Inc. 1,080,550 1,012,80286,300 Osisko Mining Corporation 1,171,890 845,740

111,200 SEMAFO Inc. 890,711 732,808

9,059,478 8,930,858

Industrials – 4.3%63,176 CAE, Inc. 707,668 622,28424,625 Finning International Inc. 559,157 545,19815,500 Wajax Corporation 487,586 596,440

1,754,411 1,763,922

Consumer Discretionary – 7.2%16,393 Cogeco Cable Inc. 653,702 841,78120,000 IMAX Corporation 388,994 372,40051,100 Linamar Corporation 720,982 711,31229,700 Quebecor Inc., Class B 982,476 1,025,541

2,746,154 2,951,034

Consumer Staples – 4.1%15,600 Alimentation Couche-Tard Inc., Class B 450,346 493,740

6,400 Empire Company Limited, Class A 368,000 376,70437,900 Maple Leaf Foods Inc. 426,454 410,07839,000 Viterra, Inc. 391,395 418,470

1,636,195 1,698,992

Financials – 22.2%63,900 Brookfield Properties Corporation, Inc. 918,460 1,017,92714,300 Canadian Real Estate Investment Trust* 505,770 505,79131,708 Canadian Western Bank 821,733 818,06677,300 Chartwell Seniors Housing Real Estate Investment

Trust 569,744 657,05025,000 First Capital Realty, Inc. 414,745 432,50040,200 Guardian Capital Group Ltd., Class A 389,516 376,27217,600 H&R Real Estate Investment Trust 361,853 409,024

9,480 Industrial Alliance Insurance and FinancialServices Inc. 280,628 248,471

22,300 Intact Financial Corporation 1,275,058 1,305,21944,700 Power Financial Corporation 1,135,645 1,140,744


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Financials (cont’d)

44,900 Primaris Retail Real Estate Investment Trust 905,580 925,38931,650 TMX Group Inc. 1,200,874 1,317,906

8,779,606 9,154,359

Information Technology – 4.7%38,100 Celestica Inc. 284,995 284,98826,598 CGI Group Inc., Class A 337,454 509,88421,780 Open Text Corporation 986,662 1,133,429

1,609,111 1,928,301

Utilities – 4.7%58,400 Brookfield Infrastructure Partners LP 1,421,389 1,645,12811,600 Brookfield Renew Energy Partners LP 303,338 315,172

1,724,727 1,960,300

TOTAL EQUITIES 39,019,022 40,932,550

MONEY MARKET INSTRUMENTS – 0.8%350,000 Bank of Montreal Bearers’ Deposit Notes

1.10% due Mar. 22, 2012 349,045 349,150


OTHER ASSETS, LESS LIABILITIES – 0.0% (3,808)

NET ASSETS – 100.0% 41,277,892





Energy 30.4 25.7Materials 21.6 29.3Industrials 4.3 6.4Consumer Discretionary 7.2 8.3Consumer Staples 4.1 2.8Health Care – 1.3Financials 22.2 21.0Information Technology 4.7 3.5Utilities 4.7 –Money Market Instruments 0.8 1.1

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SScotia Private Canadian Mid Cap Pool (Continued)(formerly, Pinnacle Canadian Mid Cap Equity Fund)

Portfolio Advisor: Connor, Clark & Lunn Investment Management Ltd.






2011December 31,

2010December 31,

2011December 31,

2010


S&P/TSX Completion

Index TR 4,169,067 4,644,046 10.1 9.8








December 31, 2011


Equities $40,932,550 $ – $ – $40,932,550


$40,932,550 $349,150 $ – $41,281,700

December 31, 2010


Equities $46,592,186 $ – $ – $46,592,186


$46,592,186 $498,373 $ – $47,090,559


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Scotia Private Canadian Mid Cap Pool (Continued)(formerly, Pinnacle Canadian Mid Cap Equity Fund)


Scotia Private Canadian Growth Pool(formerly, Pinnacle Canadian Growth Equity Fund)


2011 2010

ASSETSInvestments at fair value $102,901,187 $120,951,209Cash 65,364 58,993Accrued investment income 156,836 159,388Receivable for securities sold – 259,883Subscriptions receivable 66,553 128,541Accounts receivable – 2,409

103,189,940 121,560,423

LIABILITIESRedemptions payable 41,862 110,775Accrued expenses 74 91,825

41,936 202,600

Net Assets $103,148,004 $121,357,823

NET ASSETS PER SERIESPinnacle Series Units $ 92,139,412 $108,890,686Series F Units $ 465,090 $ 398,578Series I Units $ 10,543,502 $ 12,068,559




2011 2010

INVESTMENT INCOMEDividends $ 1,868,404 $ 2,114,439Interest 28,559 (140)Securities lending 7,982 3,695Other income 227 –

1,905,172 2,117,994



226,109 237,997


Net realized gain (loss) on investments sold 5,106,579 3,243,504Net gain (loss) foreign exchange 1,882 (1,754)Transaction costs (194,879) (185,258)Change in unrealized appreciation (depreciation) of investments (17,904,797) 9,657,680



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(10,226,698) $13,701,397Series F Units $ (41,381) $ 43,982Series I Units* $ (1,044,073) $ 848,790



2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $108,890,686 $119,129,534Series F Units 398,578 206,155Series I Units* 12,068,559 –

121,357,823 119,335,689

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (10,226,698) 13,701,397Series F Units (41,381) 43,982Series I Units* (1,044,073) 848,790

(11,312,152) 14,594,169


Pinnacle Series Units (1,448,341) (1,676,412)Series F Units (3,294) (1,283)Series I Units* (175,489) (10,613)

(1,627,124) (1,688,308)


Pinnacle Series Units 14,091,621 17,786,400Series F Units 202,293 273,547Series I Units* 2,498,347 11,973,247

Reinvested distributionsPinnacle Series Units 1,430,701 1,658,641Series F Units 3,294 1,283Series I Units* 175,489 10,613


(5,270,543) (10,883,727)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (16,751,274) (10,238,848)Series F Units 66,512 192,423Series I Units* (1,525,057) 12,068,559

(18,209,819) 2,022,134


$103,148,004 $121,357,823


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AverageCost ($)

FairValue ($)


50,380 Baytex Energy Corporation 2,571,190 2,867,126114,240 Canadian Natural Resources Ltd. 3,941,095 4,347,97462,040 Celtic Exploration Ltd. 1,483,314 1,412,65176,570 Cenovus Energy Inc. 2,399,370 2,590,36366,320 Crescent Point Energy Corp. 2,752,152 2,973,12650,560 Imperial Oil Ltd. 2,072,726 2,293,90733,100 MEG Engery Corporation 1,209,658 1,364,71364,150 Peyto Exploration & Development Corporation 1,469,149 1,558,845

180,790 Precision Drilling Corporation 2,106,948 1,891,063143,180 Suncor Energy, Inc. 5,377,795 4,206,62847,100 Tourmaline Oil Corp. 1,330,058 1,254,273

106,980 Trican Well Service Ltd. 2,299,770 1,873,220

29,013,225 28,633,889

Materials – 23.5%49,620 Barrick Gold Corporation 2,254,317 2,288,97156,360 Canfor Corporation 562,610 597,980

148,280 Eldorado Gold Corporation 2,009,231 2,071,47274,810 First Majestic Silver Corp. 1,587,982 1,279,999

141,720 First Quantum Minerals Ltd. 3,042,565 2,834,40084,070 Goldcorp, Inc. 3,652,051 3,789,87683,190 Ivanhoe Mines Ltd. 1,885,751 1,500,74876,220 Osisko Mining Corporation 1,067,021 746,95693,970 Potash Corporation of Saskatchewan Inc. 4,636,621 3,955,197

337,510 SEMAFO Inc. 3,234,440 2,224,19180,790 Teck Resources Ltd., Class B 2,872,625 2,896,322

26,805,214 24,186,112

Industrials – 8.6%303,230 Bombardier Inc., Class B 1,952,050 1,228,08246,810 Canadian National Railway Company 2,478,817 3,748,07775,930 Finning International Inc. 1,924,956 1,681,09043,120 SNC-Lavalin Group Inc. 2,079,336 2,196,964

8,435,159 8,854,213

Consumer Discretionary – 4.8%71,940 Dollarama Inc. 2,140,247 3,197,01251,030 Magna International Inc. 1,726,528 1,730,938

3,866,775 4,927,950

Consumer Staples – 1.4%46,400 Alimentation Couche-Tard Inc., Class B 1,004,589 1,468,560

Health Care – 2.5%54,310 Valeant Pharmaceuticals International, Inc. 1,761,842 2,580,268

Financials – 22.1%119,280 Bank of Nova Scotia, The 5,304,102 6,055,84455,540 Brookfield Asset Management Inc., Class A 1,487,039 1,553,45433,510 Home Capital Group Inc. 1,521,135 1,645,34151,550 Intact Financial Corporation 2,399,148 3,017,22222,380 National Bank of Canada 1,499,737 1,614,49344,580 Royal Bank of Canada 2,173,150 2,314,59487,410 Toronto-Dominion Bank, The 5,480,237 6,665,011

19,864,548 22,865,959

Information Technology – 2.7%81,730 CGI Group Inc., Class A 1,642,669 1,566,76423,840 Open Text Corporation 1,464,897 1,240,634

3,107,566 2,807,398

Telecommunication Services – 2.1%55,070 Rogers Communications, Inc., Class B 1,960,647 2,160,947

TOTAL EQUITIES 95,819,565 98,485,296


AverageCost ($)

FairValue ($)


0.82% to 0.91% due fromMar. 1, 2012 to Jun. 7, 2012 4,412,426 4,415,891



NET ASSETS – 100.0% 103,148,004




Energy 27.8 25.8Materials 23.5 29.5Industrials 8.6 7.6Consumer Discretionary 4.8 6.8Consumer Staples 1.4 –Health Care 2.5 2.2Financials 22.1 23.2Information Technology 2.7 3.5Telecommunication Services 2.1 –Money Market Instruments 4.3 1.1

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Scotia Private Canadian Growth Pool (Continued)(formerly, Pinnacle Canadian Growth Equity Fund)

Portfolio Advisor: MFC Global Investment Management










U.S. Dollar 42,644 0.0 – –

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$4,264 or approximately 0.0% of total Net Assets,(December 31, 2010 - $0, or approximately 0.0% of total NetAssets). In practice, actual results may differ from thissensitivity analysis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010


S&P/TSX Composite

Index 10,521,096 12,863,929 10.2 10.6








December 31, 2011


Equities $98,485,296 $ – $ – $ 98,485,296


$98,485,296 $4,415,891 $ – $102,901,187

December 31, 2010


Equities $119,632,913 $ – $ – $119,632,913


$119,632,913 $1,318,296 $ – $120,951,209


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SScotia Private Canadian Growth Pool (Continued)(formerly, Pinnacle Canadian Growth Equity Fund)


Scotia Private Canadian Small Cap Pool(formerly, Pinnacle Canadian Small Cap Equity Fund)


2011 2010

ASSETSInvestments at fair value $176,777,598 $146,571,393Cash 7,300,653 10,512Accrued investment income 402,537 407,285Receivable for securities sold 30,418 7,035Subscriptions receivable 43 78,812Accounts receivable – 2,489

184,511,249 147,077,526

LIABILITIESRedemptions payable 39,080 81,282Accrued expenses 1,416 80,148

40,496 161,430

Net Assets $184,470,753 $146,916,096

NET ASSETS PER SERIESPinnacle Series Units $ 48,063,904 $ 57,795,760Series F Units $ 295,205 $ 527,296Series I Units $136,111,644 $ 88,593,040




2011 2010

INVESTMENT INCOMEDividends $ 4,196,683 $ 1,619,484Interest 292,270 1,555,004Capital gains distributions received 41 –Securities lending 44,672 22,100Other income 1,077 182

4,534,743 3,196,770



276,796 232,464





INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 1,296,287 $14,249,603Series F Units $ 918 $ 108,557Series I Units $ 923,563 $14,248,119



2011 2010


146,916,096 85,748,287

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 1,296,287 14,249,603Series F Units 918 108,557Series I Units 923,563 14,248,119

2,220,768 28,606,279


Pinnacle Series Units (1,042,159) (1,512,708)Series F Units (896) (9,827)Series I Units (3,288,379) (1,225,968)

From realized gainPinnacle Series Units (213,431) –Series F Units (1,309) –Series I Units (603,469) –

(5,149,643) (2,748,503)



Reinvested distributionsPinnacle Series Units 1,246,452 1,503,635Series F Units 2,109 9,586Series I Units 3,891,849 1,225,968

Payments on redemptionPinnacle Series Units (17,625,502) (28,468,828)Series F Units (333,170) (545,817)Series I Units (1,432,769) (925,786)

40,483,532 35,310,033

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (9,731,856) (5,621,152)Series F Units (232,091) (168,774)Series I Units 47,518,604 66,957,735

37,554,657 61,167,809


$184,470,753 $146,916,096

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AverageCost ($)

FairValue ($)


266,802 AltaGas Ltd. 5,594,718 8,494,977870,329 Canadian Energy Services & Technology

Corporation 5,097,229 9,695,4662,016,700 Delphi Energy Corp. 4,837,581 4,275,404

673,247 Gasfrac Energy Services, Inc. 5,189,634 4,699,26492,348 Paramount Resources Ltd. 3,146,394 3,920,173

2,929,933 Sandstorm Metals & Energy Ltd. 1,336,122 952,2281,024,544 Sandstorm Metals & Energy Ltd. Warrants $0.70

Dec. 23, 2012 84,945 30,73687,244 ShawCor Ltd. Class A 2,024,687 2,506,520

236,856 Zargon Oil & Gas Ltd 2,868,447 3,228,347347,340 ZCL Composites Inc. 1,865,963 1,014,233

32,045,720 38,817,348

Materials – 10.8%197,332 Fortress Paper Limited 7,310,052 5,209,565655,320 Neo Material Technologies, Inc. 2,744,354 4,796,94243,828 Opta Minerals Inc. 168,443 85,903

129,191 Stella-Jones Inc. 3,573,062 5,233,527395,072 Winpak Ltd. 3,920,022 4,665,800

17,715,933 19,991,737

Industrials – 17.5%336,256 Bird Construction, Inc. 3,397,598 3,860,219409,583 Contrans Group, Inc., Class A 3,842,942 3,198,84318,628 Data Group Income Fund, The 140,083 70,041

133,817 DirectCash Payments Inc. 2,259,993 2,676,34052,594 Genivar, Inc. 1,024,396 1,383,7484,988 IBI Group, Inc. 95,401 65,492

239,590 Morneau Shepell, Inc. 2,433,291 2,491,736806,430 New Flyer Industries Inc. 7,909,085 4,532,13749,900 Omni-Lite Industries Canada Inc. 110,201 70,858

173,400 Richelieu Hardware Ltd. 3,901,128 4,941,90015,761 Russel Metals Inc. 225,155 353,046

314,058 Stantec Inc. 7,232,419 8,658,580

32,571,692 32,302,940

Consumer Discretionary – 4.3%50,000 AlarmForce Industries Inc. 517,494 512,500

101,611 Automodular Corporation 193,471 186,9647,500 McGraw-Hill Ryerson Ltd. 297,999 321,000

239,540 MTY Food Group Inc. 2,696,750 3,636,217123,224 Uni-Select Inc. 3,069,966 3,206,288

6,775,680 7,862,969

Consumer Staples – 2.5%224,052 Alliance Grain Traders, Inc. 5,834,077 4,640,117

Health Care – 7.3%66,298 Amica Mature Lifestyles Inc-Sub Receipts* 493,920 502,53911,856 Amica Mature Lifestyles Inc. 90,106 92,477

1,358,708 Centric Health Corp. 1,813,878 2,065,236261,728 Paladin Labs, Inc. 6,227,162 10,767,490

8,625,066 13,427,742

Financials – 22.6%128,300 Allied Properties Real Estate Investment Trust 2,270,858 3,239,575265,279 Altus Group Ltd. 3,791,702 928,477218,500 Canadian Western Bank 3,946,372 5,637,300176,704 Distinction Group, Inc. 574,323 791,63455,135 EGI Financial Holdings, Inc. 580,932 383,188

215,696 Element Financial Corp. Restricted 864,633 1,024,556178,714 Element Financial Corp. Rights Jan. 26, 2012* – –


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Financials (cont’d)

311,377 Element Financial Corp. 1,307,783 1,479,041210,284 Equitable Group Inc. 5,285,763 5,257,100116,844 Equity Financial Holdings, Inc. 706,443 1,099,502221,968 First National Financial Corporation 3,107,280 3,862,243242,770 FirstService Corporation 5,613,179 6,537,796192,118 Home Capital Group Inc. 6,508,732 9,432,994198,874 InterRent Real Estate Investment Trust 606,268 630,43155,186 Mainstreet Equity Corporation 954,480 1,313,979

36,118,748 41,617,816

Information Technology – 9.1%125,640 COM DEV International Ltd. 360,333 252,536141,724 Constellation Software Inc. 4,907,551 10,739,845760,316 Critical Control Solutions Corp. 477,786 209,087690,506 Descartes Systems Group Inc., The 3,353,483 4,985,453211,143 Sylogist Ltd. 480,443 380,057692,360 TIO Networks Corporation 368,202 304,638

9,947,798 16,871,616

Utilities – 0.2%173,603 Maxim Power Corp. 476,161 338,526

TOTAL EQUITIES 150,110,875 175,870,811

MONEY MARKET INSTRUMENTS – 0.5%908,000 Government of Canada Treasury Bills

0.80% to 0.89% due Mar. 01, 2012 906,315 906,787


OTHER ASSETS, LESS LIABILITIES – 4.2% 7,693,155

NET ASSETS – 100.0% 184,470,753





Energy 21.0 18.4Materials 10.8 11.0Industrials 17.5 16.8Consumer Discretionary 4.3 9.6Consumer Staples 2.5 2.7Health Care 7.3 4.6Financials 22.6 24.7Information Technology 9.1 9.7Utilities 0.2 –Money Market Instruments 0.5 2.2

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SScotia Private Canadian Small Cap Pool (Continued)(formerly, Pinnacle Canadian Small Cap Equity Fund)

Portfolio Advisor: Mawer Investment Management Ltd.










U.S. Dollar 358 0.0 350 0.0

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$36, or approximately 0.0% of total Net Assets (December 31,2010 – $35, or approximately 0.0% of total Net Assets). Inpractice, actual results may differ from this sensitivity analy-sis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010


BMO Small Cap

Weighted Index 15,680,014 12,487,868 8.5 8.5








December 31, 2011


Equities $175,840,075 $ – $ – $175,840,075

Warrants – 30,736 – 30,736


$175,840,075 $937,523 $ – $176,777,598

December 31, 2010


Equities $142,449,366 $ 135,503 $ – $142,584,869


Warrants – 781,688 – 781,688

$142,449,366 $4,122,027 $ – $146,571,393


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Scotia Private Canadian Small Cap Pool (Continued)(formerly, Pinnacle Canadian Small Cap Equity Fund)


Scotia Private U.S. Value Pool(formerly, Pinnacle American Value Equity Fund)


2011 2010

ASSETSInvestments at fair value $178,028,634 $130,930,023Cash 5,028,451 9,584,950Accrued investment income 716,068 150,378Receivable for securities sold – 65,665Subscriptions receivable 35,234 69,736Accounts receivable – 2,381

183,808,387 140,803,133LIABILITIESPayable for securities purchased – 992,082Redemptions payable 20,820 126,553Accrued expenses 631 100,461

21,451 1,219,096Net Assets $183,786,936 $139,584,037

NET ASSETS PER SERIESPinnacle Series Units $ 42,908,366 $ 47,891,850Series F Units $ 50,175 $ 66,131Series I Units $140,828,395 $ 91,626,056UNITS OUTSTANDINGPinnacle Series Units 4,254,797 4,780,840Series F Units 4,952 6,564Series I Units 13,621,079 8,927,718NET ASSETS PER UNITPinnacle Series Units $ 10.08 $ 10.02Series F Units $ 10.13 $ 10.08Series I Units $ 10.34 $ 10.26


2011 2010

INVESTMENT INCOMEDividends $ 4,797,892 $ 2,123,667Interest 287 2,294Securities lending 30,693 301Foreign withholding taxes/tax reclaims (694,944) (284,344)Other income 499 470

4,134,427 1,842,388



229,762 243,705



Net gain (loss) on investments and transaction costs (693,478) 12,214,834


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 1,197,359 $ 5,843,197Series F Units $ 1,140 $ 6,492Series I Units $ 2,012,688 $ 7,963,828



2011 2010


139,584,037 79,140,832

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 1,197,359 5,843,197Series F Units 1,140 6,492Series I Units 2,012,688 7,963,828

3,211,187 13,813,517


Pinnacle Series Units (682,301) (718,662)Series F Units (251) (461)Series I Units (2,672,023) (766,551)

(3,354,575) (1,485,674)



Reinvested distributionsPinnacle Series Units 679,973 716,804Series F Units 251 461Series I Units 2,672,023 766,551

Payments on redemptionPinnacle Series Units (12,041,510) (16,514,301)Series F Units (31,210) (19,708)Series I Units (1,104,878) (201,225)

44,346,287 48,115,362

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (4,983,484) (3,804,944)Series F Units (15,956) 25,858Series I Units 49,202,339 64,222,291

44,202,899 60,443,205


$183,786,936 $139,584,037

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Portfolio Advisor: Herndon Capital Management, LLC



AverageCost ($)

FairValue ($)


39,000 Apache Corporation 3,536,664 3,599,02238,503 Chevron Corporation 3,942,156 4,171,37140,453 Core Laboratories NV 3,896,713 4,690,08359,307 Diamond Offshore Drilling, Inc. 3,667,207 3,338,90884,384 Exxon Mobil Corporation 6,926,141 7,279,95297,788 Halliburton Company 3,750,827 3,437,10163,159 HollyFrontier Corporation 1,810,145 1,503,770

149,044 Marathon Oil Corporation 3,560,570 4,444,51990,789 RPC, Inc. 1,928,161 1,688,04472,103 Valero Energy Corporation 1,882,397 1,544,828

34,900,981 35,697,598

Materials – 6.0%22,389 CF Industries Holdings, Inc. 3,007,126 3,307,42770,989 Cliffs Natural Resources Inc. 4,988,343 4,509,36283,937 Freeport-McMoRan Copper & Gold Inc. 3,832,387 3,146,088

11,827,856 10,962,877

Industrials – 7.3%95,833 Copa Holdings SA, Class A 5,496,064 5,724,30239,435 Cummins Inc. 3,663,622 3,536,31450,715 Lockheed Martin Corporation 3,855,225 4,177,897

13,014,911 13,438,513

Consumer Discretionary – 10.1%90,235 Coach, Inc. 5,079,568 5,612,39549,018 Ross Stores, Inc. 1,725,417 2,374,618

122,717 TJX Companies, Inc., The 6,258,513 8,071,52942,319 Yum! Brands, Inc. 2,163,947 2,544,184

15,227,445 18,602,726

Consumer Staples – 13.8%166,647 Altria Group, Inc. 4,276,593 5,035,658112,964 Campbell Soup Company 3,825,996 3,822,05135,874 Colgate-Palmolive Company 3,062,276 3,375,23797,953 Herbalife Ltd. 4,831,698 5,158,36258,687 Kellogg Company 3,188,743 3,024,18561,825 Philip Morris International Inc. 4,079,923 4,941,969

23,265,229 25,357,462

Health Care – 10.5%47,446 Eli Lilly and Company 1,784,566 2,008,437

132,300 Endo Pharmaceuticals Holdings Inc. 4,996,804 4,640,71089,370 Express Scripts, Inc. 3,709,621 4,017,12195,409 Gilead Sciences, Inc. 3,698,561 3,969,74561,401 Waters Corporation 5,681,259 4,629,081

19,870,811 19,265,094

Financials – 15.3%74,461 Aflac, Inc. 3,890,594 3,281,731

161,474 American Capital Agency Corporation 4,547,760 4,611,193210,323 Annaly Capital Management Inc. 3,595,453 3,421,994153,672 Apartment Investment & Management

Company 3,862,278 3,583,6711,630,106 Chimera Investment Corporation 5,648,104 4,168,474

137,134 Eaton Vance Corp. 4,314,797 3,302,784167,750 Federated Investors, Inc., Class B 4,067,961 2,590,892124,074 Waddell & Reed Financial, Inc. 4,667,207 3,128,553

34,594,154 28,089,292

Information Technology – 12.0%34,124 Accenture PLC, Class A 2,002,636 1,850,56311,958 Apple Inc. 4,054,812 4,933,535

174,453 Corning Incorporated 2,547,692 2,305,18623,746 International Business Machines Corporation 3,158,776 4,448,489


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Information Technology (cont’d)

180,725 Microsoft Corporation 4,412,898 4,776,126119,155 Western Digital Corporation 4,349,665 3,757,167

20,526,479 22,071,066

Telecommunication Services – 2.5%381,211 Windstream Corporation 4,726,237 4,544,006



NET ASSETS – 100.0% 183,786,936




Energy 19.4 8.8Materials 6.0 2.6Industrials 7.3 9.6Consumer Discretionary 10.1 13.6Consumer Staples 13.8 12.8Health Care 10.5 8.9Financials 15.3 15.6Information Technology 12.0 16.4Telecommunication Services 2.5 1.9Utilities – 3.6

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Scotia Private U.S. Value Pool (Continued)(formerly, Pinnacle American Value Equity Fund)

Portfolio Advisor: Herndon Capital Management, LLC










U.S. Dollar 183,049,082 99.6 140,513,852 100.7

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$18,304,908, or approximately 10.0% of total Net Assets(December 31, 2010 – $14,051,385, or approximately 10.1% oftotal Net Assets). In practice, actual results may differ fromthis sensitivity analysis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010


Russell 1000

Value Index 17,092,185 13,539,943 9.3 9.7

Liquidity Risk (note 3)







December 31, 2011


Equities $178,028,634 $ – $ – $178,028,634

December 31, 2010


Equities $130,930,023 $ – $ – $130,930,023


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Scotia Private U.S. Value Pool (Continued)(formerly, Pinnacle American Value Equity Fund)


Scotia Private U.S. Mid Cap Value Pool(formerly, Pinnacle American Mid Cap Value Equity Fund)


2011 2010

ASSETSInvestments at fair value $10,765,329 $11,352,787Cash 441,444 498,180Accrued investment income 15,651 9,430Receivable for securities sold 11,895 91,896Subscriptions receivable – 38Accounts receivable – 5,278

11,234,319 11,957,609

LIABILITIESPayable for securities purchased 52,436 98,246Redemptions payable – 37,087Accrued expenses 200 55,918

52,636 191,251

Net Assets $11,181,683 $11,766,358

NET ASSETS PER SERIESPinnacle Series Units $ 8,170,413 $ 9,195,250Series F Units $ 16,686 $ 20,673Series I Units $ 127,228 $ 168,802Series M Units $ 2,867,356 $ 2,381,633

UNITS OUTSTANDINGPinnacle Series Units 1,025,213 1,078,499Series F Units 2,101 2,416Series I Units 15,874 19,715Series M Units 359,670 277,970



2011 2010

INVESTMENT INCOMEDividends $ 162,311 $ 150,458Interest 811 (6,014)Securities lending 109 190Foreign withholding taxes/tax reclaims (21,357) (25,196)

141,874 119,438

EXPENSESManagement fees (note 5) 15,231 678Harmonized Sales Tax/Goods and Services Tax 11,511 3,506Audit fees 17,719 17,825Independent Review Committee fees 3,194 2,727Custodian fees 8,005 24,114Filing fees 19,240 18,259Legal fees 3,271 3,806Unitholder reporting costs 15,908 15,005Unitholder administration and service fees 62,410 73,481Overdraft charges 1 –


79,062 62,901


Net realized gain (loss) on investments sold (186,446) 992,436Net gain (loss) foreign exchange 18,031 (32,752)Transaction costs (38,364) (36,293)Change in unrealized appreciation (depreciation) of investments (632,884) 962,399

Net gain (loss) on investments and transaction costs (839,663) 1,885,790

Increase (decrease) in Net Assets from operations $(776,851) $1,942,327

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(559,975) $1,943,660Series F Units $ (1,009) $ 2,320Series I Units* $ (8,570) $ 14,528Series M Units** $(207,297) $ (18,181)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (0.53) $ 1.46Series F Units $ (0.49) $ 0.69Series I Units* $ (0.47) $ 0.69Series M Units** $ (0.63) $ (0.31)


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 9,195,250 $12,427,087Series F Units 20,673 11,962Series I Units* 168,802 –Series M Units** 2,381,633 –

11,766,358 12,439,049

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (559,975) 1,943,660Series F Units (1,009) 2,320Series I Units* (8,570) 14,528Series M Units** (207,297) (18,181)

(776,851) 1,942,327


Pinnacle Series Units (25,991) (62,013)Series F Units – (6)Series I Units* (222) (459)Series M Units** (8,217) (208)

(34,430) (62,686)


Pinnacle Series Units 1,528,517 1,570,490Series F Units 3,600 22,555Series I Units* 9,998 183,574Series M Units** 1,454,399 2,437,313

Reinvested distributionsPinnacle Series Units 25,917 61,843Series F Units – 6Series I Units* 222 459Series M Units** 8,217 209

Payments on redemptionPinnacle Series Units (1,993,305) (6,745,817)Series F Units (6,578) (16,164)Series I Units* (43,002) (29,300)Series M Units** (761,379) (37,500)

226,606 (2,552,332)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (1,024,837) (3,231,837)Series F Units (3,987) 8,711Series I Units* (41,574) 168,802Series M Units** 485,723 2,381,633

(584,675) (672,691)

NET ASSETS – END OF PERIODPinnacle Series Units 8,170,413 9,195,250Series F Units 16,686 20,673Series I Units* 127,228 168,802Series M Units** 2,867,356 2,381,633

$11,181,683 $11,766,358


** Start date November 2, 2010.

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Portfolio Advisor: Cramer Rosenthal McGlynn, LLC



AverageCost ($)

FairValue ($)

EQUITIES – 96.3%UNITED STATES EQUITIES – 96.3%Energy – 4.2%

3,800 Cameron International Corporation 162,687 190,43610,500 El Paso Corporation 187,797 284,229

350,484 474,665

Materials – 4.5%1,900 Air Products and Chemicals, Inc. 151,670 164,8262,900 Airgas, Inc. 190,802 230,6882,200 Allegheny Technologies, Inc. 80,354 107,092

422,826 502,606

Industrials – 14.9%2,800 Ashlands Inc. 124,834 163,0284,310 Avery Dennison Corporation 111,142 125,9783,200 Dover Corporation 153,753 189,2843,100 Eaton Corporation 141,492 137,479

10,850 Republic Services, Inc. 305,067 304,2054,300 Thomas & Betts Corporation 177,332 239,149

10,550 Tyco International Ltd. 436,784 501,838

1,450,404 1,660,961

Consumer Discretionary – 13.9%4,300 CBS Corporation, Class B 85,812 118,8964,500 Harman International Industries, Incorporated 128,019 174,5352,100 Hasbro, Inc. 72,319 68,2282,800 Limited Brands, Inc. 115,337 115,104

14,500 Newell Rubbermaid Inc. 185,184 238,2815,250 Nordstrom, Inc. 260,613 265,8306,772 Stanley Black & Decker Inc. 378,996 466,0472,200 Starwood Hotels & Resorts Worldwide, Inc. 86,982 107,563

1,313,262 1,554,484

Consumer Staples – 5.0%6,600 General Mills, Inc. 263,649 271,7192,285 J.M. Smucker Company, The 150,292 181,8361,585 Mead Johnson Nutrition Company 116,221 110,969

530,162 564,524

Health Care – 9.8%8,345 CIGNA Corporation 326,095 356,9936,400 Hospira, Inc. 236,864 197,8918,700 St. Jude Medical, Inc. 316,577 304,0194,700 Stryker Corporation 228,278 238,029

1,107,814 1,096,932

Financials – 16.0%7,000 CB Richard Ellis Group, Inc. 99,818 108,400

11,029 Fifth Third Bancorp 126,982 141,1286,900 Liberty Interactive Corporation, Class A 114,718 113,2484,300 Northern Trust Corporation 158,273 172,9998,900 NYSE Euronext 242,711 236,6567,100 Principal Financial Group, Inc. 172,659 177,9434,000 State Street Corporation 155,962 164,230

14,510 SunTrust Banks, Inc. 267,711 261,5074,700 Willis Group Holdings PLC 167,225 185,692

11,100 XL Group PLC 211,958 223,572

1,718,017 1,785,375

Information Technology – 18.0%5,250 BMC Software, Inc. 211,603 175,2233,700 Fidelity National Information Service, Inc. 93,168 100,119

41,400 LSI Corporation 222,318 250,9606,200 Maxim Integrated Products Inc. 160,912 164,2938,050 Motorola Solutions, Inc. 352,544 379,6394,600 NetApp, Inc. 167,737 169,9318,424 Parametric Technology Corporation 142,091 154,5687,350 Rovi Corporation 294,940 183,385


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)UNITED STATES EQUITIES (cont’d)Information Technology (cont’d)

5,100 Tyco Electronics Ltd. 147,878 160,03314,500 Western Union Company 229,793 269,747

2,022,984 2,007,898

Utilities – 10.0%6,800 American Water Works Co., Inc. 206,194 220,7909,650 CMS Energy Corporation 193,451 217,2744,713 Edison International 191,093 198,7869,665 PPL Corporation 268,502 289,6886,800 Xcel Energy, Inc. 170,097 191,346

1,029,337 1,117,884



NET ASSETS – 100.0% 11,181,683




United States EquitiesEnergy 4.2 9.2Materials 4.5 5.8Industrials 14.9 11.8Consumer Discretionary 13.9 9.9Consumer Staples 5.0 4.6Health Care 9.8 8.1Financials 16.0 21.6Information Technology 18.0 10.4Telecommunication Services – 2.5Utilities 10.0 9.7

Money Market Instruments – 2.9

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Scotia Private U.S. Mid Cap Value Pool (Continued)(formerly, Pinnacle American Mid Cap Value Equity Fund)

Portfolio Advisor: Cramer Rosenthal McGlynn, LLC










U.S. Dollar 11,201,407 100.2 11,352,787 96.5





2011December 31,

2010December 31,

2011December 31,

2010


Russell Mid Cap

Value Index 1,106,987 1,141,337 9.9 9.7








December 31, 2011


Equities $10,765,329 $ – $ – $10,765,329

December 31, 2010


Equities $11,015,110 $ – $ – $11,015,110


$11,015,110 $337,677 $ – $11,352,787


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Scotia Private U.S. Mid Cap Value Pool (Continued)(formerly, Pinnacle American Mid Cap Value Equity Fund)


Scotia Private U.S. Large Cap Growth Pool(formerly, Pinnacle American Large Cap Growth Equity Fund)


2011 2010

ASSETSInvestments at fair value $35,254,456 $38,979,502Cash 636,825 328,248Accrued investment income 26,185 20,909Receivable for securities sold 137,007 257,545Subscriptions receivable 13,689 41,514Accounts receivable – 5,017

36,068,162 39,632,735

LIABILITIESPayable for securities purchased 153,306 –Redemptions payable 5,143 72,968Accrued expenses 434 103,376Payable for currency spot contracts – 30

158,883 176,374

Net Assets $35,909,279 $39,456,361

NET ASSETS PER SERIESPinnacle Series Units $32,371,717 $35,464,697Series F Units $ 72,990 $ 66,037Series I Units $ 3,464,572 $ 3,925,627




2011 2010

INVESTMENT INCOMEDividends $ 573,438 $ 630,853Interest 211 4,469Securities lending 115 183Foreign withholding taxes/tax reclaims (86,885) (91,454)Other income 199 –

487,078 544,051



195,398 221,793


Net realized gain (loss) on investments sold 2,540,243 2,445,697Net realized gain (loss) on currency forwards (2,440) –Net gain (loss) foreign exchange (4,971) (24,091)Transaction costs (25,215) (27,910)Change in unrealized appreciation (depreciation) of investments (2,102,696) 1,801,223Change in unrealized appreciation (depreciation) of currency spots 30 (30)

Net gain (loss) on investments and transaction costs 404,951 4,194,889

Increase (decrease) in Net Assets from operations $ 696,631 $4,517,147

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ 613,175 $4,179,404Series F Units $ 280 $ 6,673Series I Units* $ 83,176 $ 331,070

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ 0.14 $ 0.73Series F Units $ 0.03 $ 0.73Series I Units* $ 0.16 $ 0.59


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $35,464,697 $ 42,414,373Series F Units 66,037 37,913Series I Units* 3,925,627 –

39,456,361 42,452,286

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units 613,175 4,179,404Series F Units 280 6,673Series I Units* 83,176 331,070

696,631 4,517,147


Pinnacle Series Units (256,686) (277,329)Series F Units (67) (34)Series I Units* (39,504) (5,433)

(296,257) (282,796)



Reinvested distributionsPinnacle Series Units 255,461 276,316Series F Units 67 34Series I Units* 39,504 5,433

Payments on redemptionPinnacle Series Units (8,695,708) (15,588,120)Series F Units (31,880) (19,136)Series I Units* (744,232) (389,095)

(3,947,456) (7,230,276)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (3,092,980) (6,949,676)Series F Units 6,953 28,124Series I Units* (461,055) 3,925,627

(3,547,082) (2,995,925)


$35,909,279 $ 39,456,361


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Portfolio Advisor: American Century Investment Management, Inc.



AverageCost ($)

FairValue ($)

EQUITIES – 98.2%CANADIAN EQUITIES – 1.2%Consumer Staples – 0.3%

1,961 Church & Dwight Co., Inc. 76,628 91,422

Health Care – 0.4%2,062 Edwards Lifesciences Corporation 94,486 148,545

Index Units – 0.5%3,048 iShares Russell 1000 Growth Index Fund 179,994 179,517

TOTAL CANADIAN EQUITIES 351,108 419,484

FOREIGN EQUITIES – 97.0%United States – 95.6%Energy – 11.5%

1,447 Core Laboratories NV 141,169 167,7643,268 Devon Energy Corporation 234,122 206,4582,731 EOG Resources, Inc. 249,909 274,088

18,026 Exxon Mobil Corporation 1,239,840 1,555,1351,822 Hornbeck Offshore Services, Inc. 49,739 57,5623,406 Noble Energy, Inc. 305,536 327,5354,772 Occidental Petroleum Corporation 403,864 455,5904,777 Oceaneering International, Inc. 198,716 224,359

12,354 Schlumberger Limited 852,116 859,639

3,675,011 4,128,130

Materials – 3.8%4,339 Cliffs Natural Resources Inc. 276,238 275,6225,958 E.I. du Pont de Nemours and Company 288,346 277,7027,529 Freeport-McMoRan Copper & Gold Inc. 272,723 282,1984,584 Monsanto Company 327,782 327,2384,871 Rockwood Holdings Inc. 259,098 195,277

1,424,187 1,358,037

Industrials – 10.8%2,139 Cummins Inc. 206,673 191,8143,762 Deere & Company 262,639 296,4601,669 Gardner Denver Inc. 116,742 130,9974,282 Hexcel Corporation 91,120 105,5728,800 Honeywell International Inc. 466,870 487,0012,310 Illinois Tool Works Inc. 101,838 109,8584,568 Joy Global Inc. 363,822 348,9001,845 Precision Castparts Corp. 307,254 309,7343,511 Rockwell Automation, Inc. 171,563 262,3735,590 Textron Inc. 118,772 105,1313,123 Union Pacific Corporation 248,835 337,0707,731 United Parcel Service, Inc., Class B 485,664 576,3108,299 United Technologies Corporation 682,904 617,891

3,624,696 3,879,111

Consumer Discretionary – 15.4%2,655 Amazon.com, Inc. 538,336 465,9473,950 Autoliv, Inc. 295,432 215,2575,190 BorgWarner, Inc. 218,637 337,0827,117 CBS Corporation, Class B 185,371 196,786

466 Chipotle Mexican Grill, Inc. 100,188 160,4734,372 Coach, Inc. 271,269 271,9287,446 DIRECTV 371,749 323,6175,095 Dollar General Corp. 203,962 213,3416,034 Harley-Davidson, Inc. 240,263 238,9509,118 Home Depot Inc., The 288,998 390,3403,310 Limited Brands, Inc. 93,708 136,0691,248 Lululemon Athletica Inc 65,192 59,3399,912 Macy’s, Inc. 271,540 324,8636,363 McDonald’s Corporation 489,034 649,9462,812 O’Reilly Automotive, Inc. 174,462 228,644

11,238 Starbucks Corporation 409,071 526,6656,575 Starwood Hotels & Resorts Worldwide, Inc. 261,254 321,465


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United States (cont’d)Consumer Discretionary (cont’d)

1,375 Tractor Supply Company 91,286 98,1575,334 Urban Outfitters, Inc. 146,341 149,7685,149 Viacom Inc., Class B 252,466 238,054

4,968,559 5,546,691

Consumer Staples – 12.1%12,044 Coca–Cola Company, The 698,700 858,5594,137 Colgate-Palmolive Company 345,518 389,2334,524 Costco Wholesale Corporation 284,275 383,7024,760 CVS Caremark Corporation 188,366 197,7612,957 Estee Lauder Companies Inc., The 246,514 338,132

936 Hansen Natural Corporation 58,181 87,8643,455 Hershey Company, The 173,439 217,3922,931 Kellogg Company 149,554 151,0371,881 Mead Johnson Nutrition Company 89,583 131,6929,896 PepsiCo, Inc. 659,558 668,8418,780 Philip Morris International Inc. 587,366 701,828

505 The Boston Beer Company, Inc., Class A 40,495 55,7812,186 Whole Foods Markets, Inc. 147,619 154,961

3,669,168 4,336,783

Health Care – 8.5%10,096 Abbott Laboratories 543,329 577,7522,379 Alexion Pharmaceuticals, Inc. 100,712 173,2963,643 Allergan, Inc. 256,701 325,6082,164 Cerner Corporation 126,116 134,8821,316 Cooper Companies, Inc., The 87,617 94,4683,654 DENTSPLY International Inc. 120,939 129,9229,302 Express Scripts, Inc. 414,108 418,1195,974 Gilead Sciences, Inc. 265,158 248,5641,243 Idexx Laboratories Inc. 92,104 97,295

374 Intuitive Surgical, Inc. 121,720 176,4213,088 Johnson & Johnson 204,571 206,2231,277 Medivation Inc. 55,074 57,4521,905 Thermo Fisher Scientific, Inc. 98,902 87,2781,992 UnitedHealth Group Incorporated 94,836 102,8524,195 Zimmer Holdings, Inc. 217,918 228,181

2,799,805 3,058,313

Financials – 2.6%5,236 American Express Company 198,599 251,571

720 AvalonBay Communities, Inc. 92,174 95,8001,403 BlackRock, Inc. 245,179 254,7719,719 CB Richard Ellis Group, Inc. 201,465 150,5061,464 Simon Property Group, Inc. 169,017 192,316

906,434 944,964

Information Technology – 26.7%6,622 Accenture PLC, Class A 315,951 359,1154,532 Agilent Technologies, Inc. 157,187 161,1865,200 Apple Inc. 982,835 2,145,3746,134 Broadcom Corporation 206,864 183,4794,042 Check Point Software Technologies Ltd. 223,054 215,988

23,999 Cisco Systems, Inc. 427,553 442,05821,137 EMC Corporation 429,859 463,4182,154 F5 Networks, Inc. 202,622 232,7041,704 Google Inc. 931,821 1,120,7116,486 Hewlett-Packard Company 183,770 170,2203,001 International Business Machines Corporation 454,303 562,196

11,322 Jabil Circuit, Inc. 201,146 226,6593,626 KLA-Tencor Corporation 149,478 177,8007,432 Linear Technology Corporation 218,260 226,8481,043 MasterCard, Inc., Class A 271,091 396,245

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Scotia Private U.S. Large Cap Growth Pool (Continued)(formerly, Pinnacle American Large Cap Growth Equity Fund)




AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United States (cont’d)Information Technology (cont’d)

23,737 Microsoft Corporation 646,554 627,3124,483 NetApp, Inc. 198,100 165,609

17,554 Oracle Corporation 475,481 458,0083,791 QLIK Technologies Inc. 100,387 89,1419,693 QUALCOMM, Inc. 432,000 539,2854,812 Red Hat, Inc. 210,237 202,422

932 Salesforce.com, Inc. 106,622 96,3769,783 Xilinx, Inc. 325,226 318,940

7,850,401 9,581,094

Telecommunication Services – 4.2%9,103 Crown Castle International Corp. 381,054 415,2959,368 Windstream Corporation 116,148 111,6665,801 Brown & Brown Inc. 129,280 133,7445,042 Fortinet Inc. 90,744 111,6732,962 Hill-Rom Holdings, Inc. 92,177 101,6054,346 Illumina Inc. 134,793 131,9891,697 Kirby Corporation 94,636 113,796


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United States (cont’d)Telecommunication Services (cont’d)

706 Perrigo Company 61,480 69,6975,036 Polycom, Inc. 122,347 83,2713,128 Tempur-Pedic International Inc. 190,252 167,4341,796 Trimble Navigation Ltd. 79,535 78,112

1,492,446 1,518,282


Ireland – 0.9%6,799 Covidien PLC 307,701 311,775

Singapore – 0.5%5,859 Avago Technologies Ltd. 181,908 171,792




NET ASSETS – 100.0% 35,909,279




Canadian Equities 1.2 –United State Equities

Energy 11.5 10.4Materials 3.8 5.6Industrials 10.8 10.7Consumer Discretionary 15.4 17.9Consumer Staples 12.1 7.2Health Care 8.5 10.1Financials 2.6 5.4Information Technology 26.7 31.5Telecommunication Services 4.2 –

Ireland Equities 0.9 –Singapore Equities 0.5 –

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U.S. Dollar 35,819,301 99.7 39,087,001 99.1

Danish Krone – – 187,903 0.5

Total 35,819,301 99.7 39,274,904 99.6





2011December 31,

2010December 31,

2011December 31,

2010


Russell 1000

Growth Index 3,590,928 3,906,180 10.0 9.9






Payable for currency spot contracts – 30

$158,883 $176,374


The table below illustrates the classification of the Fund’sfinancial instruments within the fair value hierarchy as atDecember 31, 2011 and 2010, respectively.

December 31, 2011


Equities $35,254,456 $ – $ – $35,254,456

December 31, 2010


Equities $38,791,600 $187,902 $ – $38,979,502


Total $38,791,570 $187,902 $ – $38,979,472


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Scotia Private U.S. Mid Cap Growth Pool(formerly, Pinnacle American Mid Cap Growth Equity Fund)


2011 2010

ASSETSInvestments at fair value $79,082,890 $65,618,370Cash 4,163,737 376,826Accrued investment income 11,949 8,091Receivable for securities sold – 20,501Subscriptions receivable – 305Accounts receivable – 3,585

83,258,576 66,027,678

LIABILITIESPayable for securities purchased 423,012 75,567Redemptions payable 12,873 56,840Accrued expenses 25 99,186

435,910 231,593

Net Assets $82,822,666 $65,796,085

NET ASSETS PER SERIESPinnacle Series Units $ 7,506,037 $ 9,137,727Series F Units $ 28,878 $ 26,220Series I Units $50,901,019 $33,917,967Series M Units $24,386,732 $22,714,171

UNITS OUTSTANDINGPinnacle Series Units 480,329 558,235Series F Units 1,888 1,621Series I Units 3,236,097 2,070,426Series M Units 1,564,237 1,388,793



2011 2010

INVESTMENT INCOMEDividends $ 380,462 $ 117,156Interest 2,892 (430,696)Securities lending 74,468 1,595Foreign withholding taxes/tax reclaims (49,108) (15,198)Other income 191 –

408,905 (327,143)



304,617 94,288

Net investment income (loss) 104,288 (421,431)

Net realized gain (loss) on investments sold 628,107 463,924Net gain (loss) foreign exchange 152,869 69,741Transaction costs (100,800) (63,448)Change in unrealized appreciation (depreciation) of investments (5,133,204) 1,818,285



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ (275,778) $1,331,156Series F Units $ (1,851) $ 3,021Series I Units* $(2,411,766) $1,072,676Series M Units** $(1,659,345) $ (539,782)

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (0.55) $ 2.00Series F Units $ (1.17) $ 1.41Series I Units* $ (0.86) $ 0.55Series M Units** $ (1.02) $ (2.48)


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 9,137,727 $11,443,618Series F Units 26,220 21,853Series I Units* 33,917,967 –Series M Units** 22,714,171 –

65,796,085 11,465,471

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (275,778) 1,331,156Series F Units (1,851) 3,021Series I Units* (2,411,766) 1,072,676Series M Units** (1,659,345) (539,782)

(4,348,740) 1,867,071


Pinnacle Series Units 1,251,492 896,957Series F Units 12,513 22,707Series I Units* 19,689,830 32,883,460Series M Units** 15,099,080 23,389,822

Payments on redemptionPinnacle Series Units (2,607,404) (4,534,004)Series F Units (8,004) (21,361)Series I Units* (295,012) (38,169)Series M Units** (11,767,174) (135,869)

21,375,321 52,463,543

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (1,631,690) (2,305,891)Series F Units 2,658 4,367Series I Units* 16,983,052 33,917,967Series M Units** 1,672,561 22,714,171

17,026,581 54,330,614

NET ASSETS – END OF PERIODPinnacle Series Units 7,506,037 9,137,727Series F Units 28,878 26,220Series I Units* 50,901,019 33,917,967Series M Units** 24,386,732 22,714,171

$ 82,822,666 $65,796,085


** Start date October 21, 2010.

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Portfolio Advisor: TCW Investment Management Company



AverageCost ($)

FairValue ($)


12,650 CARBO Ceramics Inc. 1,467,370 1,589,32128,100 Core Laboratories NV 2,482,908 3,257,88847,350 FMC Technologies, Inc. 2,040,175 2,519,57732,986 Lufkin Industries, Inc. 2,195,821 2,262,02251,850 Oceaneering International, Inc. 1,780,374 2,435,215

9,966,648 12,064,023

Materials – 3.8%36,400 Allegheny Technologies, Inc. 1,775,091 1,771,883

9,550 CF Industries Holdings, Inc. 1,110,691 1,410,779

2,885,782 3,182,662

Industrials – 13.9%36,820 Aerovironment Inc. 961,845 1,178,63024,900 C.H. Robinson Worldwide, Inc. 1,815,499 1,767,89940,900 Expeditors International of Washington, Inc. 2,008,712 1,685,08624,500 IHS Inc. 1,923,635 2,148,60247,973 Resources Connection Inc. 834,036 483,37176,150 Robert Half International, Inc. 2,117,616 2,208,74226,950 Rockwell Automation, Inc. 1,728,643 2,013,940

11,389,986 11,486,270

Consumer Discretionary – 14.2%25,450 BorgWarner, Inc. 1,598,315 1,652,93464,950 CarMax, Inc. 1,892,472 2,016,22649,144 Ctrip.com Internatinal, Ltd. ADR 2,028,200 1,126,52439,050 Dick’s Sporting Goods, Inc. 1,363,626 1,466,43920,850 Fossil, Inc. 1,759,622 1,678,53663,250 Gildan Activewear Inc. 1,762,287 1,211,45113,392 Harman International Industries, Incorporated 584,389 519,41746,949 Rue21, Inc. 1,326,219 1,032,20441,850 TripAdvisor Inc. 1,209,135 1,025,838

13,524,265 11,729,569

Consumer Staples – 3.9%65,150 Arcos Dorados Holdings, Inc. 1,569,375 1,361,34342,050 Green Mountain Coffee Roasters 1,730,740 1,910,682

3,300,115 3,272,025

Health Care – 14.0%31,733 athenahealth Inc. 1,270,168 1,557,634

112,450 Dendreon Corporation 2,511,788 831,732179,824 Human Genome Sciences, Inc. 3,150,636 1,346,550

5,880 Intuitive Surgical, Inc. 1,621,877 2,773,67339,202 Ironwood Pharmaceuticals, Inc. 452,724 470,08191,350 Mylan Inc. 1,775,519 1,991,63639,150 Vertex Pharmaceuticals Incorporated 1,502,471 1,324,61152,300 Volcano Corporation 1,394,788 1,263,874

13,679,971 11,559,790


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Financials – 7.0%

33,825 ACE Limited 2,029,389 2,416,73647,652 Green Dot Corp. 2,178,042 1,513,23233,650 T. Rowe Price Group Inc. 1,939,487 1,946,904

6,146,918 5,876,872

Information Technology – 24.0%85,383 ARM Holdings PLC, ADR 1,744,181 2,406,08675,909 Aruba Networks Inc. 1,618,614 1,419,88614,150 Baidu, Inc. 1,380,280 1,677,29959,154 Cavium Networks, Inc. 1,939,794 1,710,94918,500 F5 Networks, Inc. 1,780,353 1,998,61416,548 Fusion-IO Inc. 396,257 407,31512,600 LinkedIn Corp., Class A 882,466 807,30974,287 QLIK Technologies Inc. 1,876,117 1,746,77222,000 Salesforce.com, Inc. 2,547,079 2,274,97311,019 SINA Corporation 806,334 582,86043,900 SuccessFactors, Inc. 1,262,983 1,781,40412,100 Universal Display Corporation 417,443 449,33518,952 VMware, Inc. 1,558,874 1,605,48064,151 Youku.com Inc. ADR 2,036,677 1,023,488

20,247,452 19,991,679


OTHER ASSETS, LESS LIABILITIES — 4.5% 3,739,776

NET ASSETS — 100.0% 82,822,666




United StatesEnergy 14.6 10.5Materials 3.8 1.9Industrials 13.9 20.4Consumer Discretionary 14.2 10.0Consumer Staples 3.9 3.4Health Care 14.0 14.9Financials 7.0 12.0Information Technology 24.0 21.4Telecommunication Services – 1.5

Money Market Instruments – 3.7

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Scotia Private U.S. Mid Cap Growth Pool (Continued)(formerly, Pinnacle American Mid Cap Growth Equity Fund)

Portfolio Advisor: TCW Investment Management Company










U.S. Dollar 83,064,344 100.0 65,618,371 99.7

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$8,306,434 or approximately 10.0% of total Net Assets(December 31, 2010 – $6,561,837, or approximately 10.0% oftotal Net Assets). In practice, actual results may differ fromthis sensitivity analysis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010


Russell Mid Cap Growth

Index 8,282,267 6,645,405 10.0 10.1








December 31, 2011


Equities $79,082,890 $ – $ – $79,082,890

December 31, 2010


Equities $63,189,852 $ – $ – $63,189,852


$63,189,852 $2,428,518 $ – $65,618,370


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Scotia Private U.S. Mid Cap Growth Pool (Continued)(formerly, Pinnacle American Mid Cap Growth Equity Fund)


Scotia Private International Equity Pool(formerly, Pinnacle International Equity Fund)


2011 2010

ASSETSInvestments at fair value $269,542,387 $206,621,839Cash 15,177,574 7,117,443Accrued investment income 186,471 347,249Receivable for securities sold 11,566 13,593Subscriptions receivable 15,920 67,103Receivable for currency spot contracts 39 82Accounts receivable 1,457 3,882

284,935,414 214,171,191

LIABILITIESPayable for securities purchased – 138,745Redemptions payable 17,479 38,856Accrued expenses – 120,842

17,479 298,443

Net Assets $284,917,935 $213,872,748





2011 2010

INVESTMENT INCOMEDividends $ 6,690,592 $ 4,316,947Interest 113,482 46,619Securities lending 9,837 29,547Foreign withholding taxes/tax reclaims (1,223,354) (331,142)Other income 1,068 –

5,591,625 4,061,971

EXPENSESManagement fees (note 5) 2,034 1,178Harmonized Sales Tax/Goods and Services Tax 29,164 15,411Audit fees 19,335 19,400Independent Review Committee fees 2,989 2,727Custodian fees 75,976 167,789Filing fees 16,439 16,442Legal fees 2,978 3,806Unitholder reporting costs 21,652 27,203Unitholder administration and service fees 145,858 165,378


312,373 417,020


Net realized gain (loss) on investments sold (12,373,416) 2,127,829Net gain (loss) foreign exchange 148 (175,405)Transaction costs (165,889) (362,692)Change in unrealized appreciation (depreciation) of investments (21,555,104) 12,957,794Change in unrealized appreciation (depreciation) of currency spots (43) 8,571



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ (5,289,380) $ 4,275,438Series F Units $ (28,663) $ 6,521Series I Units $(23,497,009) $13,919,089

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (0.90) $ 0.57Series F Units $ (1.26) $ 0.49Series I Units $ (1.01) $ 0.96


2011 2010


213,872,748 142,427,724

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (5,289,380) 4,275,438Series F Units (28,663) 6,521Series I Units (23,497,009) 13,919,089

(28,815,052) 18,201,048


Pinnacle Series Units (703,266) (1,102,969)Series F Units (2,472) (1,108)Series I Units (4,402,974) (2,262,584)

(5,108,712) (3,366,661)



Reinvested distributionsPinnacle Series Units 698,654 1,097,402Series F Units 2,472 1,108Series I Units 4,402,974 2,262,584

Payments on redemptionPinnacle Series Units (16,737,615) (26,733,496)Series F Units (72,928) (58,680)Series I Units (2,716,347) (50,896,652)

104,968,951 56,610,637

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (12,621,613) (13,315,267)Series F Units 137,610 58,842Series I Units 83,529,190 84,701,449

71,045,187 71,445,024


$284,917,935 $213,872,748

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AverageCost ($)

FairValue ($)

EQUITIES – 94.6%Australia – 1.8%

138,927 BHP Billiton Limited 5,477,079 4,996,364

Brazil – 2.1%253,500 BM&F BOVESPA SA 1,488,730 1,357,03173,200 Empresa Brasiliera De Aeronautica SA ADR 1,723,988 1,879,313

133,100 Natura Cosmeticos SA 2,590,409 2,638,973

5,803,127 5,875,317

China – 0.8%3,576,400 Industrial and Commercial Bank of China Ltd.,

Class H 3,018,612 2,168,473

Denmark – 2.7%66,354 Novo Nordisk AS, Class B 5,241,482 7,776,977

France – 9.1%44,358 Air Liquide SA 5,111,511 5,584,87740,800 Danone 2,649,916 2,610,84761,500 Dassault Systemes SA 3,857,124 5,016,66349,200 LVMH Moet Hennessy Louis Vuitton SA 5,732,510 7,061,75786,700 Publicis Groupe 4,096,047 4,053,71724,600 Vallourec SA 2,140,654 1,619,799

23,587,762 25,947,660

Germany – 13.3%93,640 Adidas-Salomon AG 6,237,622 6,204,96542,300 Allianz SE 5,700,166 4,091,56798,105 Fresenius Medical Care AG & Co. KGaA 5,251,768 6,790,91255,300 Kabel Deutschland Holding AG 2,644,228 2,850,959

150,522 SAP AG 7,309,415 8,107,89954,500 Siemens AG 6,799,033 5,310,19829,542 Volkswagen AG Non-voting 3,117,248 4,477,070

37,059,480 37,833,570

Hong Kong – 5.6%880,995 China Life Insurance Co., Limited, Class H 2,714,655 2,212,875

1,821,025 CNOOC Limited 3,464,458 3,245,527785,102 Hang Lung Properties Limited 2,893,899 2,274,067276,900 Hong Kong Exchanges & Clearing Limited 4,688,837 4,517,414989,200 Sinopharm Group Co., Class H 3,709,943 2,420,12164,800 Tencent Holdings Limited 1,518,131 1,329,481

18,989,923 15,999,485

Israel – 2.6%179,968 Teva Pharmaceutical Industries Ltd. ADR 9,344,779 7,400,039

Japan – 10.3%94,149 Canon Inc. 4,378,881 4,244,0331,513 Dai-ichi Life Insurance Company Ltd., The 2,605,219 1,513,003

21,807 FANUC Corp. 2,374,216 3,395,640637 KDDI Corporation 4,177,306 4,177,464

248,368 Komatsu Ltd. 5,457,324 5,900,628


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Japan (cont’d)

1,138,600 Mitsubishi UFJ Financial Group, Inc. 6,383,488 4,920,693155,949 Toyota Motor Corporation 6,262,416 5,287,330

31,638,850 29,438,791

Mexico – 0.9%984,100 Wal-Mart de Mexico SAB de CV, Series V 2,066,702 2,740,365

Netherlands – 0.4%69,100 Yandex NV 2,037,355 1,384,042

South Korea – 0.9%13,029 Hyundai Motor Company 1,771,752 2,442,572

Sweden – 5.0%234,300 Assa Abloy AB Series B 5,621,673 5,978,070211,300 Hennes & Mauritz AB, Class B 6,220,407 6,907,47053,300 Svenska Handelsbanken AB 1,396,145 1,426,115

13,238,225 14,311,655

Switzerland – 8.6%184,700 Credit Suisse Group AG 6,823,824 4,415,50782,620 Julius Baer Group Ltd. 3,258,923 3,273,832

128,587 Nestle SA 6,892,634 7,521,717125,100 Novartis AG 6,999,095 7,281,229

4,920 Swatch Group AG, Class B 1,975,750 1,867,662

25,950,226 24,359,947

United Kingdom – 25.2%322,802 ARM Holdings PLC 1,258,965 3,032,912346,500 BG Group PLC 7,130,184 7,531,503158,024 British American Tobacco PLC 5,704,864 7,636,354203,600 Carnival PLC 7,200,123 6,817,761

1,964,739 Kingfisher PLC 7,304,858 7,784,743275,858 Pearson PLC 4,258,859 5,265,132129,766 Reckitt Benkiser Group PLC 6,739,559 6,517,169182,925 Rolls-Royce Group PLC 1,743,251 2,153,349

12,621,825 Rolls-Royce Holdings PLC* – 19,977119,500 SABMiller PLC 3,228,248 4,269,670348,971 Standard Chartered PLC 7,827,236 7,743,548

1,118,900 Tesco PLC 7,626,463 7,138,5862,039,190 Vodafone Group PLC 5,758,099 5,770,000

65,780,709 71,680,704

United States – 5.3%74,044 Check Point Software Technologies Ltd. 4,012,638 3,956,60788,900 Covidien PLC 4,275,408 4,076,602

102,800 Schlumberger Limited 7,112,501 7,153,217

15,400,547 15,186,426


Currency Spot Contracts – 0.0% 39OTHER ASSETS, LESS LIABILITIES – 5.4% 15,375,509

NET ASSETS – 100.0% 284,917,935




December 31, 2011 ($)


Jan. 3, 2012 Canadian Dollar 11,605 Hong Kong Dollar 88,171 11,566 39


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Scotia Private International Equity Pool (Continued)(formerly, Pinnacle International Equity Fund)






Australia 1.8 2.3Brazil 2.1 1.7China 0.8 2.2Denmark 2.7 3.8France 9.1 11.0Germany 13.3 9.2Greece – 1.1Hong Kong 5.6 5.3Ireland – 1.3Israel 2.6 3.0Japan 10.3 10.5Luxembourg – 2.0Mexico 0.9 1.1Netherlands 0.4 1.1Norway – 0.9South Korea 0.9 1.1Spain – 1.9Sweden 5.0 3.3Switzerland 8.6 7.7Turkey – 1.2United Kingdom 25.2 21.8United States 5.3 3.1Currency Spot Contracts 0.0 0.0

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The table below indicates the currencies to which the Fundhad significant exposure net of the impact of foreign currencyforward contracts and foreign currency spot contracts, if any,based on the fair value of the Fund’s financial instruments.






British Pound 71,680,702 25.2 46,621,092 21.8

European Euro 63,781,231 22.4 56,329,494 26.3

Japanese Yen 29,438,792 10.3 22,529,322 10.5

U.S. Dollar 25,849,820 9.1 22,041,642 10.3

Swiss Franc 24,359,947 8.5 16,438,164 7.7

Hong Kong Dollar 18,156,393 6.4 16,058,004 7.5

Swedish Krona 14,311,655 5.0 7,001,028 3.3

Danish Krone 7,776,977 2.7 8,203,747 3.8

Australian Dollar 4,996,364 1.8 4,863,589 2.3

Brazilian Real 3,996,003 1.4 – –

Mexican Peso 2,740,365 1.0 2,446,559 1.1

South Korean Won 2,442,579 0.9 2,267,348 1.1

Norwegian Krone – – 2,022,524 1.0

Total 269,530,828 94.7 206,822,513 96.7





2011December 31,

2010December 31,

2011December 31,

2010


Morgan Stanley Capital

International (MSCI)

Europe, Australasia

and Far East (EAFE)

Index 27,352,122 20,745,657 9.6 9.7








December 31, 2011


Equities $32,586,189 $236,956,198 $ – $269,542,387


$32,586,228 $236,956,198 $ – $269,542,426

December 31, 2010


Equities $20,698,619 $185,923,220 $ – $206,621,839


$20,698,701 $185,923,220 $ – $206,621,921

During the period ended December 31, 2011 and 2010, therewere transfers of $1,879,313 ($3,766,663) respectivelybetween Level 1 and Level 2.

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Scotia Private International Small to Mid Cap Value Pool(formerly, Pinnacle International Small to Mid Cap Value Equity Fund)


2011 2010

ASSETSInvestments at fair value $26,974,393 $35,966,167Cash 143,518 396,838Accrued investment income 36,189 90,449Receivable for securities sold 107,199 –Subscriptions receivable 18,647 15,162Receivable for currency spot contracts 373 –Accounts receivable 303 13,200

27,280,622 36,481,816LIABILITIESRedemptions payable 17,645 28,052Accrued expenses – 88,518

17,645 116,570Net Assets $27,262,977 $36,365,246

NET ASSETS PER SERIESPinnacle Series Units $25,115,932 $33,918,683Series F Units $ 49,630 $ 50,207Series I Units $ 2,097,415 $ 2,396,356UNITS OUTSTANDINGPinnacle Series Units 2,037,181 2,448,668Series F Units 3,985 3,580Series I Units 168,022 169,932NET ASSETS PER UNITPinnacle Series Units $ 12.33 $ 13.85Series F Units $ 12.45 $ 14.02Series I Units $ 12.48 $ 14.10


2011 2010

INVESTMENT INCOMEDividends $ 929,705 $1,087,558Interest 1,382 522Capital gains distributions received 168 –Securities lending 528 3,000Foreign withholding taxes/tax reclaims (164,283) (76,031)Other income 258 –

767,758 1,015,049

EXPENSESManagement fees (note 5) 532 502Harmonized Sales Tax/Goods and Services Tax 20,967 11,851Audit fees 18,770 19,400Independent Review Committee fees 2,923 2,727Custodian fees 73,534 339,578Filing fees 16,439 16,445Legal fees 2,887 3,806Unitholder reporting costs 20,750 25,442Unitholder administration and service fees 96,541 129,314Overdraft charges 1,302 –


173,983 283,904


Net realized gain (loss) on investments sold 2,795,549 5,887,623Net gain (loss) foreign exchange (41,934) (41,214)Transaction costs (59,045) (148,585)Change in unrealized appreciation (depreciation) of investments (6,150,830) 1,688,343Change in unrealized appreciation (depreciation) of currency spots 373 –



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $(2,649,722) $7,897,418Series F Units $ (5,431) $ 7,382Series I Units* $ (206,959) $ 212,512



2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 33,918,683 $ 52,873,908Series F Units 50,207 30,966Series I Units* 2,396,356 –

36,365,246 52,904,874

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (2,649,722) 7,897,418Series F Units (5,431) 7,382Series I Units* (206,959) 212,512

(2,862,112) 8,117,312


Pinnacle Series Units (502,429) (691,331)Series F Units (623) (418)Series I Units* (49,130) –

(552,182) (691,749)



Reinvested distributionsPinnacle Series Units 498,188 687,159Series F Units 623 418Series I Units* 49,130 –

Payments on redemptionPinnacle Series Units (10,415,050) (34,038,607)Series F Units (28,093) (32,928)Series I Units* (187,657) (1,644,543)

(5,687,975) (23,965,191)

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (8,802,751) (18,955,225)Series F Units (577) 19,241Series I Units* (298,941) 2,396,356

(9,102,269) (16,539,628)


$ 27,262,977 $ 36,365,246


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AverageCost ($)

FairValue ($)

EQUITIES – 98.9%CANADIAN EQUITIES – 12.5%Energy – 3.3%

2,969 AltaGas Ltd. 81,087 94,5337,567 Calfrac Well Services Ltd. 230,398 214,978

54,793 Delphi Energy Corp. 134,412 116,1618,553 Ensign Resource Service, Inc. 156,358 138,2169,500 Pason Systems Inc. 118,152 113,5254,980 Peyto Exploration & Development Corporation 116,258 121,0149,108 Provident Energy Ltd. 87,659 89,714

924,324 888,141

Materials – 3.9%11,430 AuRico Gold Inc. 91,920 93,269

5,385 Canfor Pulp Products, Inc. 85,869 66,50516,340 Copper Mountain Mining Corporation 84,991 91,99415,426 Dundee Precious Metals Inc. 140,665 126,80214,897 Major Drilling Group International Inc. 175,820 230,30829,268 Neo Material Technologies, Inc. 152,906 214,242

3,690 Pan American Silver Corporation 116,192 81,84424,124 SEMAFO Inc. 229,358 158,977

1,077,721 1,063,941

Industrials – 1.0%10,516 TransForce, Inc. 115,359 135,972

3,476 Wajax Corporation 141,399 133,756

256,758 269,728

Consumer Discretionary – 1.0%4,038 Dollarama Inc. 133,298 179,449

12,600 Martinrea International Inc. 114,067 93,618

247,365 273,067

Consumer Staples – 0.4%9,514 Jean Coutu Group (PJC) Inc., The, Class A 113,041 121,208

Health Care – 0.3%1,564 SXC Health Solutions Corporation 29,286 89,570

Financials – 1.0%6,456 Canadian Apartment Properties Real Estate

Investment Trust 123,778 144,0332,780 Home Capital Group Inc. 95,913 136,498

219,691 280,531

Information Technology – 0.7%12,517 Celestica Inc. 115,588 93,627

1,583 Open Text Corporation 74,781 82,267

190,369 175,894

Telecommunication Services – 0.3%2,834 Manitoba Telecom Services Inc. 93,706 83,971

Utilities – 0.6%2,693 ATCO Ltd., Class I 150,057 161,661

3,302,318 3,407,712

FOREIGN EQUITIES – 86.4%Australia – 6.3%

38,127 Ausdrill Limited 131,362 118,957101,228 Beach Energy Limited 93,719 130,02648,171 Boart Longyear Ltd. 179,290 139,093

2,175 Campbell Brothers Limited 64,610 110,87831,231 Challenger Financial Services Group Limited 119,110 134,112

120,214 Commonwealth Property Office Fund 101,538 119,557162,017 Envestra Limited 97,262 120,578161,601 FKP Property Group 112,738 80,73048,941 FlexiGroup Ltd. 90,226 95,096

9,365 Flight Centre Limited 183,281 157,11414,199 GrainCorp Limited 103,863 116,061


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Australia (cont’d)

5,074 Iluka Resources Limited 82,263 81,67773,408 Mount Gibson Iron Limited 63,830 85,41572,544 Spark Infrastructure Group 95,966 103,86362,832 St. Barbara Limited 139,030 127,132

1,658,088 1,720,289

Austria – 1.1%2,495 Austriamicrosystems AG 89,087 103,902

42,833 Duluxgroup Ltd. 123,548 128,8282,785 RHI AG 103,526 55,659

316,161 288,389

Belgium – 0.8%2,184 Barco NV 117,632 111,2221,504 Kinepolis 115,097 109,358

232,729 220,580

Bermuda – 0.4%49,144 Miclyn Express Offshore Pte Ltd. 87,521 101,352

Denmark – 1.3%4,678 Christian Hansen Holding AS 101,278 103,725

12,736 GN Store Nord A/S 114,322 109,063877 Topdanmark AS 146,457 138,938

362,057 351,726

Finland – 2.0%3,982 Cargotec Oyj B Share 174,420 119,837

10,229 Huhtamaki Oyj 132,115 123,2274,734 PKC Group Oyj 117,432 71,390

38,024 Sponda Oyj 196,277 155,8755,177 Tieto Oyj 84,845 74,803

705,089 545,132

France – 5.3%2,408 Arkema 203,499 173,3072,741 Atos Origin SA 131,992 122,1774,216 Ingenico SA 119,891 154,6787,446 Medica SA 148,784 127,4022,834 Mersen 160,419 86,9084,598 Saft Groupe S.A. 138,341 132,1392,246 Societe BIC SA 199,066 202,5871,638 Sopra Group SA 124,944 77,0893,502 Valeo SA 129,784 141,1752,711 Zodiac Aerospace 184,983 233,068

1,541,703 1,450,530

Germany – 6.8%4,976 Aareal Bank AG 122,809 91,3062,492 Bilfinger Berger SE 163,805 215,5201,149 Draegerwerk AG & Co KGaA 97,056 94,9874,331 Duerr AG 172,335 194,1459,734 Freenet AG 114,042 128,3455,467 GEA Group AG 164,259 154,8953,752 Gerresheimer AG 146,427 159,2642,430 Hannover Rueckversicherung AG 103,516 122,7112,362 Hugo Boss AG 78,669 177,200

13,610 Infineon Technologies AG 84,918 104,0732,062 Kabel Deutschland Holding AG 110,969 106,3052,751 Lanxess AG 114,270 143,8952,433 Leoni AG 128,377 82,3614,844 ProSiebenSat.1 Media AG, Preference 45,330 90,146

1,646,782 1,865,153

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AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Hong Kong – 1.8%

84,000 Dah Chong Hong Holdings Limited 95,868 100,372188,000 Giordano International Limited 115,766 138,27143,000 Great Eagle Holdings Limited 126,433 85,894

408,000 Hutchison Telecommunications Hong KongHoldings Limited 140,473 160,155

214,000 Peace Mark (Holdings) Limited* 242,287

720,827 484,692

Israel – 0.4%6,130 Allot Communications Ltd. 103,229 94,365

Italy – 2.7%8,353 Banca Generali SpA 98,943 79,066

11,476 De’Longhi SpA 107,297 103,1175,165 Lottomatica S.p.A. 83,360 78,745

11,826 MARR SpA 119,931 101,08420,278 Pirelli & C. SpA 184,823 173,23517,557 Recordati SpA 146,198 128,944

797 Tod’s SpA 85,486 66,026

826,038 730,217

Japan – 18.6%139 Accordia Golf Co., Ltd. 106,124 101,973

9,000 Asahi Holding,s Inc. 161,336 181,7555,000 Capcom Co., Ltd 92,321 120,124

13 Frontier Real Estate Investment Corporation 121,119 107,35413,000 Hitachi Kokusai Electric Inc. 111,659 107,41612,600 Hulic Co., Ltd. 112,920 149,53513,000 Japan Aviation Electronics Industry, Limited. 96,826 91,427

2,700 K’s Holdings Corporation 46,120 108,8774,623 Kadokawa Group Holdings, Inc. 127,052 163,671

17,000 Kagoshima Bank, Ltd., The 143,826 121,4207,800 Kintetsu World Express Inc. 205,621 231,044

26,000 Makino Milling Machine Co., Ltd. 196,086 162,74952 Net One Systems Co., Ltd. 95,386 144,421

12,000 Nichii Gakkan Company 116,089 149,05623,000 Nichirei Corporation 112,954 113,623

6,500 Nihon Kohden Corporation 124,079 163,24317,000 Nippon Denko Co., Ltd. 93,164 78,15814,000 Nippon Shokubai Co., Ltd. 148,320 153,057

7,200 NORITZ CORPORATION 158,187 133,90324 Osaka Securities Exchange Co., Ltd. 125,156 140,517

24,000 Pioneer Corporation 95,746 109,72923,000 Rengo Co., Ltd. 149,951 163,414

2,800 Ryohin Keikaku Co., Ltd. 127,131 139,25414,000 San-In Godo Bank, Ltd., The 132,611 106,83020,000 Shiga Bank, Ltd., The 142,758 138,805

9,400 Ship Healthcare Holdings, Inc. 104,856 209,0607,300 SHO-BOND Holdings Co., Ltd. 154,124 163,573

15,900 Sumitomo Forestry Co., Ltd. 135,135 142,7822,350 Sumitomo Real Estate Sales Co 95,472 93,3716,000 Taikisha Ltd. 137,938 130,7184,100 Tamron Co., Ltd. 113,070 100,638

28,000 The Yokohama Rubber Company Limited 158,898 159,87818,000 Tokai Carbon Co., Ltd 90,866 99,363

7,700 Tokyo Seimitsu Co., Ltd. 117,515 149,21511,000 Toshiba Plant Systems & Services Corporation 124,781 113,667

3,400 Tsuruha Holdings Inc. 162,568 193,89216,000 Zeon Corporation 96,150 141,289

4,633,915 5,078,801

Netherlands – 2.3%12,826 Aalberts Industries NV 222,252 218,571

2,282 Eurocommercial Properties NV 99,152 73,572


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Netherlands (cont’d)

2,859 Imtech NV 78,044 75,1068,765 SBM Offshore NV 223,510 183,5541,422 Vastned Retail NV 101,280 64,841

724,238 615,644

Norway – 1.0%26,589 Atea ASA 179,911 270,922

Singapore – 1.3%86,000 First Resources Limited 72,015 101,799

146,000 Mapletree Commercial Trust* 100,154 97,5034,243 XP Power Ltd. 104,670 62,736

503,000 Yongnam Holdings Limited 116,861 90,928

393,700 352,966

South Korea – 4.1%9,250 BS Financial Group Inc. 126,591 89,9451,572 Daum Communications Corporation 124,195 165,9444,810 Dongkuk Steel Mill Co., Ltd. 147,381 86,8715,690 Handsome Co., Ltd. 95,618 148,6643,040 Hyundai Marine & Fire Insurance 85,645 92,2761,458 Korea District Heating Corp 86,639 80,1094,030 LG International Corporation 144,436 167,2852,000 SFA Engineering Corp. 110,966 107,3883,462 Silicon Works Co. Ltd. 91,472 94,9472,830 SKC Co., Ltd. 120,304 94,951

1,133,247 1,128,380

Spain – 2.0%19,947 Bankinter, S.A. 115,482 124,3744,714 Bolsas y Mercados Espanoles 138,454 129,2032,813 Red Electrica Corp SA 152,362 122,2784,763 Viscofan, SA 107,324 180,162

513,622 556,017

Sweden – 3.7%8,711 Boliden AB 109,986 128,701

10,035 Castellum AB 121,538 126,3964,375 Lundin Petroleum 57,409 109,362

16,549 Meda AB 154,074 175,000959 Millicom International Cellular S.A. 98,198 97,835

24,000 Trelleborg AB 214,786 211,79812,252 Wihlborgs Fastigheter AB 136,652 164,625

892,643 1,013,717

Switzerland – 5.3%834 Acino Holding AG 85,147 91,005

3,121 Aryzta AG 140,372 153,425371 Banque Cantonale Vaudoise 162,728 183,205106 Barry Callebaut AG 91,993 106,298527 Bucher Industries AG 84,817 93,814

1,267 DUFRY GROUP REG 123,837 118,352693 Flughafen Zuerich AG 263,800 244,981365 Helvetia Holding AG 131,024 116,740

1,071 Schindler Holdings AG 120,090 126,64314,790 Schmolz + Bickenbach AG 110,315 85,8351,382 Swiss Life Holding AG 159,168 128,750

1,473,291 1,449,048

United Kingdom – 18.9%59,357 Aberdeen Asset Management PLC 175,919 198,46050,261 Aegis Group PLC 123,968 114,39910,648 African Barrick Gold Ltd. 92,225 77,13334,720 Ashtead Group PLC 115,008 123,51614,571 Babcock International Group plc 159,777 168,943

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FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United Kingdom (cont’d)

24,065 Balfour Beatty PLC 160,407 100,46015,310 Berendsen PLC 111,489 105,22096,862 Booker Group PLC 75,677 113,26116,058 Carillion PLC 75,574 76,13411,343 Cookson Group PLC 90,003 90,769

3,359 Croda International PLC 52,465 95,77627,566 easyJet PLC 155,816 171,11665,632 GKN PLC 157,055 189,018

121,823 Howden Joinery Group PLC 93,029 193,28112,217 IG Group Holdings PLC 92,816 92,14610,754 IMI PLC 149,433 128,68528,067 Inchcape PLC 110,591 129,65510,792 Inmarsat PLC 117,680 68,85596,848 ITV PLC 92,838 104,07415,740 Jazztel PLC 71,875 77,28027,304 Jupiter Fund Management plc 100,437 93,41519,788 Lamprell PLC 85,007 83,85915,675 Lancashire Holdings Ltd. 148,147 179,57311,117 London Stock Exchange Group plc 156,309 139,671

3,072 NEXT PLC 110,432 132,98456,481 Paragon Group Companies PLC 124,022 163,041

8,392 Pennon Group PLC 71,762 94,77520,856 Persimmon PLC 152,444 154,50721,989 Restaurant Group PLC 82,238 103,40421,889 Rexam PLC 122,684 122,073


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United Kingdom (cont’d)

31,448 Savills PLC 178,603 162,88067,291 Senior PLC 167,452 181,51722,026 SOCO International plc 121,607 101,5385,578 Spectris PLC 123,270 113,385

50,700 Spirent Communications PLC 67,933 94,27828,435 Stagecoach Group PLC 103,210 121,90112,492 Synergy Health PLC 135,763 167,03712,349 Telecity Group PLC 111,883 126,05810,963 Vitec Group PLC 107,453 96,3334,006 Weir Group PLC, The 127,775 128,0867,327 Whitbread PLC 199,205 181,164

4,871,281 5,159,660

United States – 0.3%18,107 Gran Tierra Energy, Inc. 130,312 89,101

23,146,384 23,566,681


Currency Spot Contracts – 0.0% 373OTHER ASSETS, LESS LIABILITIES – 1.1% 288,211

NET ASSETS – 100.0% 27,262,977




December 31, 2011 ($)


Jan. 3, 2012 Canadian Dollar 116,210 U.S. Dollar 113,700 115,837 373Jan. 3, 2012 U.S. Dollar 1,000 Canadian Dollar 1,019 1,019 –

373


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Australia 6.3 5.9Austria 1.1 1.8Belgium 0.8 0.4Bermuda 0.4 –Canada 12.5 11.5Denmark 1.3 0.4Finland 2.0 0.9France 5.3 9.0Germany 6.8 8.6Hong Kong 1.8 1.2Israel 0.4 –Italy 2.7 3.1Japan 18.6 17.0Luxembourg – 0.7Netherlands 2.3 2.4Norway 1.0 1.4Singapore 1.3 1.2South Korea 4.1 3.4Spain 2.0 1.9Sweden 3.7 3.3Switzerland 5.3 6.5United Kingdom 18.9 18.1United States 0.3 0.2Currency Spot Contracts 0.0 –

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European Euro 6,165,492 22.6 10,216,398 28.1

British Pound 5,159,500 18.9 6,444,139 17.7

Japanese Yen 5,086,437 18.7 6,196,390 17.0


Swiss Franc 1,553,198 5.7 2,526,898 6.9

South Korean Won 1,128,381 4.1 1,219,588 3.3

Swedish Krona 1,013,863 3.7 1,187,423 3.3

Hong Kong Dollar 484,715 1.8 418,532 1.2

Danish Krone 351,748 1.3 129,353 0.4

Singapore Dollar 290,260 1.1 428,799 1.2

Norwegian Krone 270,933 1.0 524,325 1.4

U.S. Dollar 159,409 0.6 822,841 2.3

New Zealand Dollar 31 0.0 30 0.0

Total 23,622,214 86.7 32,259,336 88.7





2011December 31,

2010December 31,

2011December 31,

2010


S&P Developed ex-U.S.

Small Cap Index 2,644,509 3,818,351 9.7 10.5








December 31, 2011


Equities $3,966,937 $23,007,456 $ – $26,974,393


$3,967,310 $23,007,456 $ – $26,974,766

December 31, 2010


Equities $5,023,624 $30,942,543 $ – $35,966,167


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Scotia Private Emerging Markets Pool(formerly, Pinnacle Emerging Markets Equity Fund)


2011 2010

ASSETSInvestments at fair value $114,186,561 $ 90,118,461Cash 3,599,516 8,052,917Accrued investment income 122,470 47,332Receivable for securities sold – 1,793,186Subscriptions receivable 5,406 29,155Recoverable Expenses – 14

117,913,953 100,041,065LIABILITIESPayable for securities purchased – 4,703,228Redemptions payable 569 1,178Accrued expenses 1,140 –

1,709 4,704,406Net Assets $117,912,244 $ 95,336,659

NET ASSETS PER SERIESPinnacle Series Units $ 20,190,750 $ 18,852,599Series I Units $ 75,426,356 $ 50,964,841Series M Units $ 22,295,138 $ 25,519,219UNITS OUTSTANDINGPinnacle Series Units 2,539,933 1,850,997Series I Units 9,365,185 4,936,300Series M Units 2,804,718 2,509,120NET ASSETS PER UNITPinnacle Series Units $ 7.95 $ 10.19Series I Units $ 8.05 $ 10.32Series M Units $ 7.95 $ 10.17


2011 2010*

INVESTMENT INCOMEDividends $ 2,195,043 $ 261,761Interest 124,705 4,286Securities lending 12,866 –Foreign withholding taxes/tax reclaims (161,968) (36,890)Other income 475 905

2,171,121 230,062

EXPENSESManagement fees (note 5) 190,853 4,204Harmonized Sales Tax/Goods and Services Tax 48,763 5,017Audit fees 18,770 11,000Independent Review Committee fees 2,941 490Custodian fees 212,984 17,121Filing fees 16,439 4,949Legal fees 2,856 1,565Unitholder reporting costs 17,601 6,290Unitholder administration and service fees 41,131 8,638Overdraft charges 190 72


472,751 53,046

Net investment income (loss) 1,698,370 177,016

Net realized gain (loss) on investments sold (2,106,527) (240,574)Net gain (loss) foreign exchange (188,076) 26,221Transaction costs (248,873) (72,631)Change in unrealized appreciation (depreciation) of investments (26,621,587) 2,170,065



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ (5,016,548) $ 155,545Series I Units $(15,504,888) $1,539,419Series M Units $ (6,945,257) $ 365,133

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (2.13) $ 0.14Series I Units $ (2.09) $ 0.34Series M Units $ (2.31) $ 1.13


2011 2010*

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 18,852,599 $ –Series I Units 50,964,841 –Series M Units 25,519,219 –

95,336,659 –

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units (5,016,548) 155,545Series I Units (15,504,888) 1,539,419Series M Units (6,945,257) 365,133

(27,466,693) 2,060,097


Pinnacle Series Units (298,744) –Series I Units (1,302,633) –Series M Units (144,837) –

From realized gainPinnacle Series Units – (4,689)Series I Units – (6,307)Series M Units – (59)

(1,746,214) (11,055)


Pinnacle Series Units 10,775,926 19,478,526Series I Units 40,000,411 49,445,879Series M Units 24,527,777 25,238,636

Reinvested distributionsPinnacle Series Units 298,293 4,689Series I Units 1,302,633 6,307Series M Units 144,837 59

Payments on redemptionPinnacle Series Units (4,420,776) (781,472)Series I Units (34,008) (20,457)Series M Units (20,806,601) (84,550)

51,788,492 93,287,617

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units 1,338,151 18,852,599Series I Units 24,461,515 50,964,841Series M Units (3,224,081) 25,519,219

22,575,585 95,336,659

NET ASSETS – END OF PERIODPinnacle Series Units 20,190,750 18,852,599Series I Units 75,426,356 50,964,841Series M Units 22,295,138 25,519,219

$117,912,244 $95,336,659

* Fund’s inception date September 8, 2010.

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Portfolio Advisor: Trilogy Global Advisors, LLC



AverageCost ($)

FairValue ($)

EQUITIES – 96.8%CANADIAN EQUITIES – 0.7%

42,753 Pacific Rubiales Energy Corporation 1,105,094 800,764

FOREIGN EQUITIES – 96.1%United States – 5.7%Index Fund – 3.8%

94,116 iPath MSCI India Index ETN 6,672,611 4,463,450

Energy – 1.1%28,459 Ecopetrol SA 1,236,498 1,289,650

Health Care – 0.6%26,379 Mindray Medical International Limited ADR 708,153 687,190

Financials – 0.2%11,247 Market Vectors Russia ETF 406,705 302,044


Brazil – 15.5%68,650 Amil Participacoes SA 653,747 615,996

173,287 Banco Bradesco SA ADR 3,459,712 2,944,759158,172 Banco Santander Brasil SA ADS ADR 2,013,915 1,311,721107,711 BR Malls Participacoes 1,068,974 1,067,20451,960 CETIP 768,352 757,173

168,624 Companhia de Concessoes Rodoviarias 1,174,322 1,124,885108,649 Gafisa Sa ADR 1,378,170 506,96681,813 Itau Unibanco Holding SA ADR 1,748,632 1,545,32498,225 Localiza Rent A Car SA 1,564,145 1,374,963

202,468 MRV Engenharia e Participacoes SA 1,840,761 1,184,59344,211 Natura Cosmeticos SA 904,895 876,57174,945 Petroleo Brasileiro SA ADR 2,589,882 1,897,39048,511 Tractebel Energia SA 797,321 794,449

102,476 Vale SA ADR 3,337,849 2,239,428

23,300,677 18,241,422

Chile – 0.7%10,124 Banco Santander Chile SA ADR 849,991 780,792

China – 6.9%364,513 Anhui Conch Cement Company Limited 1,267,834 1,093,907870,012 Anta Sports Products Limited 1,376,588 1,047,882537,610 China Shenhua Energy Company Limited

Class H 2,367,046 2,373,0723,401,742 Industrial and Commercial Bank of China Ltd.,

Class H 2,545,783 2,062,57312,465 PetroChina Company Limited 1,624,561 1,579,031

9,181,812 8,156,465

Columbia – 0.6%11,313 Bancolombia SA ADR 710,490 686,237

Czech Republic – 1.3%9,229 Komercni Banka AS 2,129,682 1,584,514

Hong Kong – 9.4%1,983,307 China Construction Bank Corporation, Class H 1,724,903 1,412,655

317,000 China Life Insurance Co., Limited, Class H 1,063,186 796,23812,548 CNOOC Limited 2,771,368 2,233,341

1,370,761 Dongfeng Motor Group Company Limited 2,429,708 2,379,9381,882,236 Fushan International Energy Group Limited 1,249,763 648,2121,703,006 Huabao International Holdings Limited 1,914,081 887,588

844,000 Lenovo Group Limited 497,004 571,4231,179,043 Parkson Retail Group Ltd. 1,729,921 1,471,556

291,698 Yanzhou Coal Mining Company Limited 872,093 631,447

14,252,027 11,032,398

India – 3.7%33,226 Infosys Technologies Limited ADR 2,138,532 1,737,54817,111 State Bank of India GDR 2,178,912 1,115,319


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)India (cont’d)

123,982 Sterlite Industries (India) Ltd. ADR 1,854,031 875,34535,152 Tata Motors Limited 828,957 605,235

7,000,432 4,333,447

Indonesia – 2.1%5,909,454 PT Adaro Energy Tbk 1,454,942 1,174,782

817,725 PT Bank Mandiri 623,021 618,102360,876 PT Tambang Batubara Bukit Asam Tbk 826,744 703,285

2,904,707 2,496,169

Israel – 0.9%105,551 Israel Chemicals Limited 1,645,814 1,116,705

Mexico – 4.2%42,533 America Movil SAB de CV, Series L, ADR 1,168,318 979,314

559,310 Corporacion GEO SAB de CV Series B 1,434,597 703,60144,771 Desarrolladora Homex SA de C.V. ADR 1,347,837 767,659

276,001 Grupo Financiero Banorte SAB de CV, Series O 1,193,634 851,385639,054 Grupo Mexico SAB de CV, Series B 2,196,670 1,699,284

7,341,056 5,001,243

Poland – 1.2%32,842 Bank Pekao S.A. 1,547,816 1,362,539

Portugal – 0.5%33,159 Jeronimo Martins, SGPS, SA 515,125 557,943

Russia – 7.3%14,642 Magnit 302,342 315,38388,286 Magnitogorsk Iron & Steel Works 878,541 436,69872,437 Mobile TeleSystems 1,480,509 1,082,62554,240 Novolipetsk Steel GDR 2,057,904 1,083,210

261,674 OAO Gazprom, Sponsored ADR 3,245,920 2,834,71974,873 Rosneft Oil Company 564,560 502,152

191,315 Sberbank of Russia 2,654,112 1,937,41646,877 TMK OAO GDR 874,997 428,238

12,058,885 8,620,441

South Africa – 7.3%75,215 ABSA Group Limited 1,471,783 1,339,167

163,414 African Bank Investments Limited 807,046 702,66598,738 Aspen Pharmacare Holdings Limited 1,280,412 1,191,05249,146 Bidvest Group Limited 1,014,977 959,28177,851 MTN Group Limited 1,474,060 1,400,24468,113 Naspers Limited N Shares 3,611,532 3,031,720

9,659,810 8,624,129

South Korea – 15.0%21,542 Dongbu Insurance Co., Ltd. 964,324 1,012,3347,916 E–Mart Co Ltd. 1,772,004 1,942,086

14,940 Hyundai Motor Company 2,518,887 2,800,83117,248 KB Financial Group, Inc. 825,085 550,3622,989 LG Chem Ltd. 1,039,784 835,855

14,704 NHN Corporation 2,515,076 2,727,1735,221 Samsung Electronics Co., Ltd. 4,226,958 4,855,226

22,978 Shinhan Financial Group Co., Ltd. 998,745 804,1212,850 Shinsegae Co., Ltd. 899,837 613,717

48,093 Woongjin Coway Co., Ltd. 1,496,597 1,549,491

17,257,297 17,691,196

Taiwan – 6.1%170,000 Delta Electronics Inc. 428,802 411,759461,000 Hon Hai Precision Industry Co., Ltd. 1,072,833 1,283,254678,043 Synnex Technology International Corporation 1,581,993 1,665,636882,000 Taiwan Semiconductor Manufacturing

Company Ltd. 2,079,690 2,246,711

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Scotia Private Emerging Markets Pool (Continued)(formerly, Pinnacle Emerging Markets Equity Fund)




AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Taiwan (cont’d)

949,065 Unimicron Technology Corp. 1,413,931 1,135,905393,324 Wistron Corporation 456,178 506,451

7,033,427 7,249,716

Thailand – 3.0%236,569 Bangkok Bank Public Company Limited 1,236,811 1,251,86060,633 Banpu Public Company Limited 1,488,661 1,068,287

314,329 Kasikornbank Public Company Limited 1,304,583 1,262,711

4,030,055 3,582,858

Turkey – 2.4%49,357 Anadolu Efes Biracilik ve Malt Sanayii AS 698,677 608,247

353,277 Haci Omer Sabanci Holding AS 1,496,844 1,030,424


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Turkey (cont’d)

373,789 Turkiye Garanti Bankasi AS 1,796,736 1,189,259

3,992,257 2,827,930

United Kingdom – 2.3%49,309 BHP Billiton PLC 1,816,213 1,455,76434,688 SABMiller PLC 1,186,226 1,241,555

3,002,439 2,697,319




NET ASSETS – 100.0% 117,912,244




Canada 0.7 –United States 5.7 30.4Brazil 15.5 12.9Chile 0.7 0.9China 6.9 5.8Columbia 0.6 0.5Czech Republic 1.3 –Egypt – 1.6Hong Kong 9.4 7.6India 3.7 2.5Indonesia 2.1 0.4Israel 0.9 1.2Mexico 4.2 5.2Peru – 0.8Poland 1.2 –Portugal 0.5 0.7Russia 7.3 7.9South Africa 7.3 6.8South Korea 15.0 0.6Taiwan 6.1 –Thailand 3.0 4.7Turkey 2.4 2.1United Kingdom 2.3 1.9

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U.S. Dollar 37,953,180 32.2 57,373,223 60.2

South Korean Won 17,140,834 14.5 – –

Hong Kong Dollar 15,380,695 13.0 9,158,290 9.6

South African Rand 11,321,447 9.6 8,351,981 8.8

Taiwan Dollar 7,870,040 6.7 – –

Brazilian Real 7,798,866 6.6 3,713,534 3.9

Thai Baht 3,582,858 3.0 4,470,483 4.7

Mexican Peso 3,254,270 2.8 3,309,391 3.5

Turkish Lira 2,827,930 2.4 2,011,534 2.1

Indonesian Rupiah 2,496,169 2.1 288,058 0.3

Czech Koruna 1,584,514 1.3 – –

Polish Zloty 1,362,539 1.2 – –

Israel Shekel 1,116,705 0.9 1,142,553 1.2

European Euro 557,943 0.5 636,001 0.7

Egyptian Pound – – 1,572,760 1.6

Total 114,247,990 96.8 92,027,808 96.6

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, netassets would have decreased or increased, respectively by$11,424,799, or approximately 9.7% of total net assets(December 31, 2010 – $9,202,781, or approximately 9.7% oftotal net assets). In practice, actual results may differ fromthis sensitivity analysis and the difference could be material.


The table below indicates the estimated impact on the netassets of the Fund due to a 10% change in the respectivemarket index, with all other variables held constant. TheFund’s historical sensitivity measure may not be representa-tive of its future sensitivity measure, and accordingly, theimpact on net assets could be materially different.


2011December 31,

2010December 31,

2011December 31,

2010




Emerging Markets

Index 12,027,049 9,724,339 10.2 10.2







The tables below illustrate the classification of the Fund’sfinancial instruments within the fair value hierarchy as atDecember 31, 2011 and 2010.

December 31, 2011


Equities $42,853,695 $71,332,866 $ – $114,186,561

December 31, 2010


Equities $41,325,949 $48,792,512 $ – $90,118,461

During the period ended December 31, 2011 and 2010, therewere transfers of $11,226,380 ($13,118,262) respectivelybetween Level 1 and Level 2.

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Scotia Private Global Equity Pool(formerly, Pinnacle Global Equity Fund)


2011 2010

ASSETSInvestments at fair value $189,607,841 $148,194,088Cash 7,434,569 2,472,534Accrued investment income 47,366 110,308Receivable for securities sold 367,255 –Subscriptions receivable 28,884 43,992Receivable for currency spot contracts 64 –Accounts receivable – 2,643

197,485,979 150,823,565

LIABILITIESPayable for securities purchased 88,469 1,167,344Redemptions payable 15,753 30,380Accrued expenses 1,182 101,326Payable for currency spot contracts 155 1,206

105,559 1,300,256

Net Assets $197,380,420 $149,523,309





2011 2010

INVESTMENT INCOMEDividends $ 3,163,278 $ 1,589,271Interest 27,834 14,984Securities lending 183 1,311Foreign withholding taxes/tax reclaims (465,215) (167,206)Other income 207 –

2,726,287 1,438,360



256,077 280,911


Net realized gain (loss) on investments sold 1,170,082 1,095,358Net gain (loss) foreign exchange (227,459) (177,549)Transaction costs (119,362) (129,977)Change in unrealized appreciation (depreciation) of investments (14,425,340) 11,870,575Change in unrealized appreciation (depreciation) of currency spots 1,115 –Change in unrealized appreciation (depreciation) of currency forward – (730)



INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (2,324,110) $ 4,370,448Series F Units $ (18,131) $ 22,235Series I Units $ (8,788,513) $ 9,422,443

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (0.76) $ 1.12Series F Units $ (0.96) $ 1.21Series I Units $ (0.75) $ 1.75


2011 2010


149,523,309 80,214,141


(11,130,754) 13,815,126


Pinnacle Series Units (312,827) (450,201)Series F Units (715) (409)Series I Units (2,156,313) (693,861)

(2,469,855) (1,144,471)



Reinvested distributionsPinnacle Series Units 310,904 448,268Series F Units 715 409Series I Units 2,156,313 693,861

Payments on redemptionPinnacle Series Units (12,118,140) (16,223,782)Series F Units (38,504) (60,804)Series I Units (538,511) (227,442)

61,457,720 56,638,513

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units (9,316,520) (6,921,944)Series F Units 35,868 58,421Series I Units 57,137,763 76,172,691

47,857,111 69,309,168


$197,380,420 $149,523,309

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Portfolio Advisor: Harding Loevner LP



AverageCost ($)

FairValue ($)

EQUITIES – 96.1%Australia – 1.7%

50,630 Cochlear Limited 3,145,611 3,275,087

Austria – 1.1%123,800 Erste Group Bank AG 3,506,867 2,208,953

Cayman Islands – 0.7%1,116,000 Anta Sports Products Limited 1,858,667 1,344,162

France – 4.3%27,807 Air Liquide SA 3,074,013 3,501,03034,800 Dassault Systemes SA 2,343,881 2,838,69720,550 L’Oreal SA 2,327,458 2,184,810

7,745,352 8,524,537

Hong Kong – 4.7%501,000 China Merchants Holdings International

Company Limited 1,718,933 1,476,1903,587,600 Li & Fung Limited 6,811,174 6,728,8471,174,000 Shandong Weigao Group Medical Polymer

Company Limited 1,344,787 1,075,598

9,874,894 9,280,635

India – 1.5%49,500 HDFC Bank Ltd-ADR 1,332,778 1,325,31260,800 ICICI Bank Limited ADR 2,600,625 1,637,149

3,933,403 2,962,461

Indonesia – 0.9%1,912,000 PT Bank Central Asia Tbk 1,211,565 1,718,224

Japan – 10.2%54,000 ABC-Mart, Inc. 1,765,847 2,090,56841,300 FANUC Corp. 5,340,580 6,430,9597,330 Keyence Corporation 1,680,177 1,798,841

514 M3, Inc. 1,025,756 2,359,29224,900 Stanley Electric Co., Ltd. 357,666 372,189

141,500 Unicharm Corporation 5,423,327 7,106,067

15,593,353 20,157,916

Mexico – 1.8%65,672 America Movil SAB de CV, Series L, ADR 1,759,633 1,512,08520,700 Coca–Cola Femsa SA de CV ADR 1,659,414 2,003,675

3,419,047 3,515,760

Netherlands – 1.0%143,030 Qiagen N.V. 2,430,982 2,007,665

Russia – 1.0%174,080 OAO Gazprom, Sponsored ADR 2,630,731 1,885,811

Singapore – 0.1%74,000 Olam International Limited 161,327 123,313

South Africa – 1.0%39,900 Sasol Ltd. 1,632,607 1,934,073

Spain – 1.1%27,200 Industria de Diseno Textil SA 2,335,824 2,264,013

Sweden – 1.3%24,200 Millicom International Cellular S.A. 2,612,624 2,468,824


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)Switzerland – 8.8%

43,900 Lonza Group AG 3,414,623 2,631,991115,670 Nestle SA 6,068,480 6,797,25546,500 Novartis AG 2,555,331 2,706,45228,800 Sonova Holdings AG 2,863,108 3,068,6055,900 Swatch Group AG, Class B 1,961,766 2,239,676

16,863,308 17,443,979

Turkey – 0.9%568,200 Turkiye Garanti Bankasi ADR 3,337,100 1,800,318

United Kingdom – 4.7%499,767 RPS Group PLC 1,857,081 1,419,753257,900 Standard Chartered PLC 6,292,191 5,722,713205,020 WPP Group PLC 2,028,224 2,182,104

10,177,496 9,324,570

United States – 49.3%30,820 3M Co. 2,639,538 2,564,69642,660 Abbott Laboratories 2,175,900 2,441,2538,320 Amazon.com, Inc. 1,229,136 1,460,143

10,850 Apple Inc. 3,226,458 4,476,40642,250 Bunge Limited 2,655,601 2,460,40498,640 Cisco Systems, Inc. 2,108,984 1,816,93447,330 Citrix Systems, Inc. 2,773,396 2,918,73640,100 Coach, Inc. 1,689,373 2,494,12219,900 Cognizant Technology Solutions Corporation 1,416,932 1,301,59442,850 Colgate-Palmolive Company 3,402,026 4,031,580

124,100 eBay Inc. 3,219,773 3,833,439140,700 EMC Corporation 2,904,939 3,084,778121,500 Emerson Electric Co. 5,854,057 5,767,08843,520 Exxon Mobil Corporation 3,158,301 3,754,54518,700 F5 Networks, Inc. 1,749,123 2,020,22159,170 First Republic Bank 1,804,399 1,847,0476,770 Google Inc. 3,802,683 4,452,592

37,100 Informatica Corporation 1,650,245 1,395,101119,500 JPMorgan Chase & Co. 5,108,610 4,046,84434,700 Lululemon Athletica Inc 1,970,171 1,649,88925,800 McDonald’s Corporation 1,975,310 2,635,33045,000 Monsanto Company 3,045,280 3,212,41995,770 Oracle Corporation 2,405,028 2,498,77230,850 Praxair, Inc. 2,497,299 3,358,28336,450 Procter & Gamble Company, The 2,305,870 2,475,42979,460 Schlumberger Limited 5,485,453 5,529,13170,050 Sigma-Aldrich Corporation 3,931,777 4,448,287

223,040 Staples, Inc. 4,749,313 3,151,71441,600 SVB Financial Group 2,302,030 2,016,53346,200 Teradata Corporation 1,870,695 2,283,759

282,800 Wells Fargo & Company 8,137,969 7,940,471

93,245,669 97,367,540


Currency Spot Contracts – 0.0% (91)OTHER ASSETS, LESS LIABILITIES – 3.9% 7,772,670

NET ASSETS – 100.0% 197,380,420

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Scotia Private Global Equity Pool (Continued)(formerly, Pinnacle Global Equity Fund)





December 31, 2011 ($)


(Depreciation)

Jan. 3, 2012 U.S. Dollar 46,826 Canadian Dollar 47,861 47,861 (155)Jan. 4, 2012 U.S. Dollar 40,011 Canadian Dollar 40,699 40,699 64

(91)

The currency spot contracts outstanding at December 31, 2011 are placed with a financial institution with a credit rating of AA� by Standard and Poor’s.

SUMMARY OF INVESTMENT PORTFOLIO AND FINANCIAL DERIVATIVES



Australia 1.7 1.2Austria 1.1 1.4Canada – 0.9Cayman Islands 0.7 –Denmark – 1.6France 4.3 4.8Germany – 1.3Hong Kong 4.7 4.4India 1.5 1.8Indonesia 0.9 1.3Japan 10.2 8.5Mexico 1.8 1.0Netherlands 1.0 0.8Russia 1.0 1.1Singapore 0.1 1.0South Africa 1.0 1.0Spain 1.1 –Sweden 1.3 –Switzerland 8.8 8.7Turkey 0.9 1.5United Kingdom 4.7 5.2United States 49.3 51.6Currency Spot Contracts 0.0 0.0

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U.S. Dollar 115,204,460 58.4 89,486,666 59.9

Japanese Yen 20,157,916 10.2 12,675,509 8.5

European Euro 14,219,560 7.2 12,254,018 8.2

Swiss Franc 10,646,724 5.4 10,171,388 6.8

Hong Kong Dollar 10,624,797 5.4 6,548,626 4.4

British Pound 9,324,571 4.7 7,828,817 5.2


Swedish Krona 2,468,824 1.3 – –

South African Rand 1,934,073 1.0 1,536,334 1.0

Indonesian Rupiah 1,725,700 0.9 1,908,336 1.3

Singapore Dollar 123,313 0.1 1,529,812 1.0

Danish Krone – – 2,439,711 1.6

Total 189,705,025 96.3 148,203,662 99.1

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, NetAssets would have decreased or increased, respectively by$18,970,503 or approximately 9.6% of total Net Assets(December 31, 2010 – $14,820,366, or 9.9% of total NetAssets). In practice, actual results may differ from thissensitivity analysis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010




World Index 18,751,140 15,101,854 9.5 10.1






Payable for currency spot contracts 155 1,206

$105,559 $1,300,256



December 31, 2011


Equities $113,230,090 $76,377,751 $ – $189,607,841


$113,230,154 $76,377,751 $ – $189,607,905


$113,229,999 $76,377,751 $ – $189,607,750

December 31, 2010


Equities $90,177,775 $58,016,313 $ – $148,194,088

Currency Spot Contracts – Liabilities (1,206) – – (1,206)

$90,176,569 $58,016,313 $ – $148,192,882


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Scotia Private Global Real Estate Pool(formerly, Pinnacle Global Real Estate Securities Fund)


2011 2010

ASSETSInvestments at fair value $151,973,441 $136,819,103Cash 1,330,491 5,156,458Accrued investment income 742,868 346,300Receivable for securities sold 54,811,599 785,249Subscriptions receivable 43,189 253,943Receivable for currency spot contracts 207,882 484Accounts receivable – 3,404

209,109,470 143,364,941

LIABILITIESPayable for securities purchased 48,746,634 1,239,253Redemptions payable 45,367 42,321Accrued expenses 1,738 79,748Payable for currency spot contracts 35,812 1,877

48,829,551 1,363,199

Net Assets $160,279,919 $142,001,742

NET ASSETS PER SERIESPinnacle Series Units $ 98,032,427 $ 96,780,492Series F Units $ 130,263 $ 152,677Series I Units $ 62,117,229 $ 45,068,573




2011 2010

INVESTMENT INCOMEDividends $ 5,169,982 $ 5,517,592Interest 122,258 107,299Capital gains distributions received 13,892 –Securities lending 13,342 8,469Foreign withholding taxes/tax reclaims (511,733) (625,763)Other income 3,404 4,742

4,811,145 5,012,339EXPENSESManagement fees (note 5) 1,496 2,806Harmonized Sales Tax/Goods and Services Tax 20,232 9,023Audit fees 18,770 19,400Independent Review Committee fees 2,912 2,727Custodian fees 64,477 100,073Filing fees 17,950 16,442Legal fees 2,863 3,806Unitholder reporting costs 20,846 25,286Unitholder administration and service fees 96,643 113,714Overdraft charges 406 –


242,290 290,626Net investment income (loss) 4,568,855 4,721,713Net realized gain (loss) on investments sold (555,871) 2,833,740Net gain (loss) foreign exchange (346,134) (89,281)Transaction costs (453,440) (321,887)Change in unrealized appreciation (depreciation) of investments (9,220,221) 11,010,567Change in unrealized appreciation (depreciation) of currency spots 173,463 (8,375)Net gain (loss) on investments and transaction costs (10,402,203) 13,424,764Increase (decrease) in Net Assets from operations $ (5,833,348) $18,146,477

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSPinnacle Series Units $ (3,584,174) $14,191,817Series F Units $ (6,215) $ 20,294Series I Units $ (2,242,959) $ 3,934,366INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITPinnacle Series Units $ (0.41) $ 1.48Series F Units $ (0.47) $ 0.78Series I Units $ (0.47) $ 1.65


2011 2010

NET ASSETS – BEGINNING OF PERIODPinnacle Series Units $ 96,780,492 $109,863,333Series F Units 152,677 361,834Series I Units 45,068,573 12,792,163

142,001,742 123,017,330


(5,833,348) 18,146,477


Pinnacle Series Units (3,194,155) (2,745,756)Series F Units (2,482) (4,985)Series I Units (2,085,562) (642,640)

(5,282,199) (3,393,381)



Reinvested distributionsPinnacle Series Units 3,179,709 2,731,022Series F Units 2,482 4,985Series I Units 2,085,562 642,640

Payments on redemptionPinnacle Series Units (20,665,554) (45,233,248)Series F Units (74,647) (305,986)Series I Units (2,355,689) (4,667,621)

29,393,724 4,231,316

INCREASE (DECREASE) IN NET ASSETSPinnacle Series Units 1,251,935 (13,082,841)Series F Units (22,414) (209,157)Series I Units 17,048,656 32,276,410

18,278,177 18,984,412


$160,279,919 $142,001,742

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AverageCost ($)

FairValue ($)

EQUITIES – 94.8%Australia – 10.0%1,689,497 Dexus Property Group 1,421,446 1,461,7682,871,636 Goodman Group 1,759,191 1,702,857

501,100 GPT Group 1,612,547 1,601,7931,527,800 Investa Office Fund 956,971 954,338

776,600 Mirvac Group 964,276 954,534721,366 Stockland 2,701,811 2,394,936551,204 Westfield Group 5,641,413 4,487,867928,271 Westfield Retail Trust 2,518,488 2,405,889

17,576,143 15,963,982

Brazil – 0.5%48,100 BR Malls Participacoes 477,817 476,57624,800 Sonae Sierra Brasil 321,699 325,049

799,516 801,625

Canada – 3.0%18,300 Calloway Real Estate Investment Trust 488,945 489,8918,830 Canadian Real Estate Investment Trust 237,213 312,317

22,000 Cominar Real Estate Investment Trust 483,340 484,22027,700 H&R Real Estate Investment Trust 642,637 643,74815,500 Primaris Retail Real Estate Investment Trust 319,300 319,45598,700 RioCan Real Estate Investment Trust 2,615,050 2,606,667

4,786,485 4,856,298

Cayman Islands – 0.4%382,009 China Resources Land Limited 606,077 627,345

France – 3.9%10,434 ICADE 960,109 835,09111,300 Klepierre 317,053 327,05724,847 Mercialys 886,045 815,4355,127 Societe Immobiliere de Location pour l’Industrie

et le Comm. 559,359 506,31920,574 Unibail-Rodamco 3,693,974 3,751,310

6,416,540 6,235,212

Germany – 0.6%33,395 GSW Immobilien AG* 1,012,406 984,771

Hong Kong – 12.7%72,000 Cheung Kong (Holdings) Limited 877,279 869,153

884,000 China Overseas Land & Investment Limited 1,573,936 1,510,07842,000 Great Eagle Holdings Limited 84,020 83,896

544,300 Hang Lung Properties Limited 1,960,511 1,576,578363,100 Hongkong Land Holdings Limited 2,049,084 1,674,628283,000 Kerry Properties Limited 949,911 953,060767,000 Link Real Estate Investment Trust, The 2,865,880 2,879,194975,000 Longfor Properties 1,111,453 1,126,295904,000 Sino Land Company Limited 1,321,397 1,310,473716,000 Soho China Ltd. 479,891 486,352507,100 Sun Hung Kai Properties Limited 7,276,296 6,448,391316,210 Wharf Holdings Limited, The 1,631,553 1,453,460

22,181,211 20,371,558

Japan – 7.8%150 Advance Residence Investment 292,314 294,986140 Japan Real Estate Investment Corporation 1,100,252 1,111,450550 Japan Retail Fund Investment Corporation 823,816 830,021127 Kenedix Realty Investment Corporation 374,666 376,274

244,362 Mitsubishi Estate Company Ltd. 4,360,762 3,714,167256,700 Mitsui Fudosan Co., Ltd. 4,751,026 3,805,913

65 Nippon Accommodations Fund Inc.* 442,567 445,541100 Nippon Building Fund Inc. 1,019,519 833,602

43,000 Nomura Real Estate Holdings, Inc. 635,141 651,24413,000 Tokyo Tatemono Co. Ltd. 39,466 40,025

400 United Urban Investment Corporation 450,651 461,940

14,290,180 12,565,163

Netherlands – 0.3%10,851 Corio NV 613,627 478,612


AverageCost ($)

FairValue ($)

EQUITIES (cont’d)New Zealand – 0.3%

667,433 AMP NZ Office Ltd Reit NPV* 421,887 433,919

Singapore – 5.0%225,000 Ascendas Real Estate Investment Trust 324,598 323,546

1,160,000 Capitacommercial Trust 958,402 959,5001,085,300 Capitaland Limited 2,413,517 1,878,604

951,000 CapitaMall Trust 1,274,681 1,267,6791,104,000 Fortune Real Estate Investment* 515,142 549,908

338,000 Frasers Centrepoint Trust* 379,193 382,4311,054,000 Global Logistic Properties Limited 1,525,899 1,449,5421,071,000 Mapletree Commercial Trust* 727,967 715,248

780,720 Mapletree Logistics Trust* 446,128 518,430

8,565,527 8,044,888

Sweden – 0.5%36,899 Castellum AB 423,175 464,76331,300 Hufvudstaden AB, Class A 322,422 324,416

745,597 789,179

Switzerland – 0.7%3,800 PSP Swiss Property AG 323,993 323,395

10,500 Swiss Prime Site AG 800,650 803,226

1,124,643 1,126,621

United Kingdom – 4.4%221,842 British Land Company PLC 2,186,966 1,616,66952,400 Derwent London PLC 1,155,720 1,289,916

154,200 Great Portland Estates PLC 793,637 785,879282,954 Hammerson PLC 1,712,800 1,605,183113,865 Land Securities Group PLC 1,571,058 1,140,945205,600 Safestore Holdings PLC 323,368 324,61499,036 Segro 493,963 326,441

8,237,512 7,089,647

United States – 44.7%35,478 AvalonBay Communities, Inc. 4,301,319 4,720,51845,000 Boston Properties, Inc. 3,830,346 4,566,70637,600 BRE Properties, Inc. 1,940,054 1,932,193

119,500 Brookfield Office Properties, Inc. 1,908,716 1,904,111116,200 Developers Diversified Realty Corporation 1,464,957 1,440,73678,755 Equity Residential Real Estate Investment Trust 3,455,668 4,575,82014,429 Essex Property Trust, Inc. 1,577,851 2,065,52820,374 Federal Realty Investment Trust 1,531,760 1,883,695

167,500 General Growth Properties, Inc. 2,572,833 2,563,14068,325 HCP, Inc. Real Estate Investment Trust 2,256,614 2,883,91352,188 Health Care Real Estate Investment Trust, Inc. 2,396,968 2,899,30415,800 Highwoods Properties, Inc. 485,342 477,759

216,397 Host Hotels & Resorts Inc. 3,136,811 3,254,05766,124 Kimco Realty Corporation 1,260,920 1,093,36566,500 Liberty Property Trust 2,116,842 2,092,12059,163 Macerich Company, The 2,821,841 3,051,12424,500 Pebblebrook Hotel Trust 483,445 478,24421,500 Post Properties, Inc. 966,042 957,649

143,076 ProLogis 4,158,285 4,167,43225,684 Public Storage Real Estate Investment Trust 2,367,563 3,518,38559,295 Simon Property Group, Inc. 5,435,477 7,789,20639,810 SL Green Realty Corp. 2,334,545 2,700,37229,012 Starwood Hotels & Resorts Worldwide, Inc. 1,428,239 1,418,45626,657 Tanger Factory Outlet Centers, Inc. 542,090 795,18850,000 UDR Inc 1,285,747 1,278,59054,307 Ventas, Inc. 2,399,865 3,050,22251,680 Vornado Realty Trust Real Estate Investment Trust 3,939,043 4,046,788

62,399,183 71,604,621


Currency Spot Contracts – 0.1% 172,070OTHER ASSETS, LESS LIABILITIES – 5.1% 8,134,408

NET ASSETS – 100.0% 160,279,919


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Scotia Private Global Real Estate Pool (Continued)(formerly, Pinnacle Global Real Estate Securities Fund)





December 31, 2011 ($)


Jan. 3, 2012 Canadian Dollar 22,534,969 U.S. Dollar 22,001,434 22,414,990 119,979Jan. 3, 2012 Canadian Dollar 3,392,191 European Euro 2,568,285 3,386,363 5,828Jan. 3, 2012 Canadian Dollar 3,065,067 Hong Kong Dollar 23,333,126 3,060,773 4,294Jan. 3, 2012 Canadian Dollar 775,154 Swedish Krona 5,247,405 776,823 (1,669)Jan. 3, 2012 Canadian Dollar 473,105 European Euro 359,456 473,953 (849)Jan. 3, 2012 Canadian Dollar 134,769 Mexican Peso 1,848,001 134,924 (156)Jan. 4, 2012 Australian Dollar 3,025,261 Canadian Dollar 3,131,781 3,131,778 20,784Jan. 4, 2012 Canadian Dollar 1,466,711 British Pound 933,302 1,477,187 (10,476)Jan. 4, 2012 Canadian Dollar 630,861 U.S. Dollar 617,849 629,463 1,398Jan. 4, 2012 Canadian Dollar 339,331 Swedish Krona 2,299,873 340,472 (1,141)Jan. 4, 2012 Canadian Dollar 123,181 Hong Kong Dollar 937,706 123,006 175Jan. 4, 2012 Swiss Franc 1,036,041 Canadian Dollar 1,124,396 1,124,399 (613)Jan. 4, 2012 Hong Kong Dollar 58,702,224 Canadian Dollar 7,681,657 7,681,489 18,901Jan. 4, 2012 Singapore Dollar 75,073 Canadian Dollar 58,985 58,985 (22)Jan. 4, 2012 U.S. Dollar 2,094,181 Canadian Dollar 2,138,725 2,138,718 (5,173)Jan. 5, 2012 British Pound 15,192 Canadian Dollar 23,948 23,948 97Jan. 5, 2012 Canadian Dollar 928,608 Japanese Yen 70,637,358 934,918 (6,310)Jan. 5, 2012 Canadian Dollar 309,261 Hong Kong Dollar 2,363,304 310,011 (750)Jan. 5, 2012 Canadian Dollar 158,004 New Zealand Dollar 200,826 159,262 (1,258)Jan. 5, 2012 Canadian Dollar 128,757 Singapore Dollar 164,435 129,150 (392)Jan. 5, 2012 U.S. Dollar 14,114,601 Canadian Dollar 14,344,669 14,344,624 35,287Jan. 5, 2012 U.S. Dollar 3,878,121 Canadian Dollar 3,957,041 3,957,028 (6,011)Jan. 6, 2012 Canadian Dollar 356,045 New Zealand Dollar 450,217 357,037 (992)Jan. 6, 2012 Japanese Yen 25,737,733 Canadian Dollar 339,629 339,512 1,139

172,070


SUMMARY OF INVESTMENT PORTFOLIO AND FINANCIAL DERIVATIVES



Australia 10.0 8.9Belgium – 0.9Brazil 0.5 –Canada 3.0 3.5Cayman Islands 0.4 –France 3.9 4.1Germany 0.6 1.5Hong Kong 12.7 14.9Japan 7.8 10.6Mexico – 0.5Netherlands 0.3 1.3New Zealand 0.3 0.9Poland – –Singapore 5.0 3.2South Africa – 0.5Sweden 0.5 0.7Switzerland 0.7 –United Kingdom 4.4 6.1United States 44.7 38.8Currency spot contracts 0.1 0.0

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U.S. Dollar 70,745,470 44.1 57,595,180 40.6

Hong Kong Dollar 24,061,885 15.0 18,762,465 13.2


Japanese Yen 11,969,759 7.5 15,084,156 10.6

Singapore Dollar 7,424,814 4.6 4,496,823 3.2

British Pound 5,636,408 3.5 8,646,957 6.1

European Euro 3,838,279 2.4 11,040,973 7.8

Swiss Franc 2,251,020 1.4 – –

Brazilian Real 801,625 0.5 – –

New Zealand Dollar (82,380) (0.1) 1,214,500 0.9

Mexican Peso (134,924) (0.1) 694,841 0.5

Swedish Krona (328,116) (0.2) 1,024,867 0.7

South African Rand – – 775,169 0.6

Total 145,279,596 90.5 131,956,860 93.1

As at December 31, 2011, if the Canadian dollar had strength-ened or weakened by 10% in relation to all other foreigncurrencies, with all other factors remaining constant, netassets would have decreased or increased, respectively by$14,527,960, or approximately 9.1% of total Net Assets(December 31, 2010 – $13,195,686, or approximately 9.3% oftotal Net Assets). In practice, actual results may differ fromthis sensitivity analysis and the difference could be material.




2011December 31,

2010December 31,

2011December 31,

2010


FTSE/EPRA NAREIT

Global Index 15,547,152 13,206,162 9.7 9.3

*Financial Times Stock Exchange/European Public Real Estate Association/North AmericanAssociation of Real Estate Investment Trusts Global Real Estate Index.






Payable for currency spot contracts 35,812 1,877

$48,829,551 $1,363,199



December 31, 2011


Equities $80,288,377 $71,685,064 $ – $151,973,441

Currency Spot Contracts – Assets 207,882 – – 207,882

80,496,259 71,685,064 – 152,181,323

Currency Spot Contracts –

Liabilities (35,812) – – (35,812)

$80,460,447 $71,685,064 $ – $152,145,511

December 31, 2010


Equities $66,434,632 $70,372,129 $ – $136,806,761

Warrants – 12,342 – 12,342


66,435,116 70,384,471 – 136,819,587

Currency Spot Contracts –

Liabilities (1,877) – – (1,877)

$66,433,239 $70,384,471 $ – $136,817,710


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Pinnacle Balanced Income Portfolio


2011 2010

ASSETSInvestments at fair value $13,845,901 $12,550,152Cash 243,432 288,016Subscriptions receivable 30,145 26,356Accounts receivable – 570

14,119,478 12,865,094

LIABILITIESRedemptions payable 58,726 922Accrued expenses 865 23,741

59,591 24,663

Net Assets $14,059,887 $12,840,431

NET ASSETS PER SERIESSeries A Units $14,059,887 $12,840,431

UNITS OUTSTANDINGSeries A Units 1,333,819 1,220,932

NET ASSETS PER UNITSeries A Units $ 10.54 $ 10.52


2011 2010

INVESTMENT INCOMEInterest from underlying Funds $484,585 $330,510Capital gains distributions received 35,088 15

519,673 330,525


343,120 299,318Absorbed expenses (325) (9,551)

342,795 289,767


Net realized gain (loss) on investments sold 161,318 41,638Change in unrealized appreciation (depreciation) of investments (87,693) 751,511

Net gain (loss) on investments 73,625 793,149

Increase (decrease) in Net Assets from operations $250,503 $833,907

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units $250,503 $833,907

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITSeries A Units $ 0.19 $ 0.74


2011 2010

NET ASSETS – BEGINNING OF PERIODSeries A Units $12,840,431 $10,334,461

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units 250,503 833,907


Series A Units (217,951) (44,288)


Series A Units 3,164,829 3,293,436Reinvested distributions

Series A Units 217,271 44,160Payments on redemption

Series A Units (2,195,196) (1,621,245)

1,186,904 1,716,351

INCREASE (DECREASE) IN NET ASSETSSeries A Units 1,219,456 2,505,970

NET ASSETS – END OF PERIODSeries A Units $14,059,887 $12,840,431

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STATEMENT OF INVESTMENT PORTFOLIOAs at December 31, 2011Number ofUnits Issuer

AverageCost ($)

FairValue ($)

FIXED INCOME FUNDS – 68.7%222,560 Scotia Private American Core-Plus Bond Pool

Series I 1,806,221 2,071,348153,291 Scotia Private High Yield Income Pool Series I 1,338,590 1,378,314530,223 Scotia Private Income Pool Series I 5,774,559 6,210,660

8,919,370 9,660,322

CANADIAN EQUITY FUNDS – 11.0%99,850 Scotia Private Canadian Growth Pool Series I 1,184,409 1,122,69024,636 Scotia Private Canadian Value Pool Series I 428,756 427,412

1,613,165 1,550,102

FOREIGN EQUITY FUNDS – 18.7%18,419 Scotia Private Emerging Markets Pool Series I 180,390 148,40434,753 Scotia Private Global Equity Pool Series I 416,461 417,34696,487 Scotia Private Global Real Estate Pool Series I 977,923 1,098,44833,415 Scotia Private International Small to Mid Cap

Value Pool Series I 481,423 417,22053,550 Scotia Private U.S. Value Pool Series I 471,811 554,059

2,528,008 2,635,477



NET ASSETS – 100.0% 14,059,887




Fixed Income Funds 68.7 68.4Canadian Equity Funds 11.0 10.7Foreign Equity Funds 18.7 18.6



The table below indicates the estimated impact on the NetAssets of the Portfolio due to a 10% change in the respectivemarket indices, with all other variables held constant. ThePortfolio’s historical sensitivity measure may not be represen-tative of its future sensitivity measure, and accordingly, theimpact on Net Assets could be materially different.


2011December 31,

2010December 31,

2011December 31,

2010


DEX Universe Bond

Index – 70%,

S&P/TSX Composite

Index – 11%,



All Country World

Index – 19%

Blended Benchmark Impact

(a product of all the

benchmarks above) 1,476,288 1,296,884 10.5 10.1








December 31, 2011


Mutual Funds $13,845,901 $ – $ – $13,845,901

December 31, 2010


Mutual Funds $12,550,152 $ – $ – $12,550,152


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SPinnacle Balanced Income Portfolio (Continued)



Pinnacle Conservative Balanced Growth Portfolio


2011 2010

ASSETSInvestments at fair value $61,351,805 $70,239,073Cash 409,219 652,662Subscriptions receivable 3,752 26,207Accounts receivable – 1,258

61,764,776 70,919,200

LIABILITIESRedemptions payable 59,210 140,391Accrued expenses 4,103 42,531

63,313 182,922

Net Assets $61,701,463 $70,736,278


UNITS OUTSTANDINGSeries A Units 6,013,079 6,618,992



2011 2010

INVESTMENT INCOMEInterest from underlying Funds $ 1,959,637 $1,410,333Interest – 164Capital gains distributions received 79,317 176

2,038,954 1,410,673

EXPENSESManagement fees (note 5) 1,420,731 1,410,290Harmonized Sales Tax/Goods and Services Tax 156,710 117,572Audit fees 9,970 9,925Independent Review Committee fees 3,122 2,727Custodian fees 1,219 5,524Filing fees 14,225 13,862Legal fees 2,820 3,000Unitholder reporting costs 15,247 29,742Unitholder administration and service fees 33,443 47,319

1,657,487 1,639,961Absorbed expenses (583) –

1,656,904 1,639,961


Net realized gain (loss) on investments sold 677,757 (391,785)Change in unrealized appreciation (depreciation) of investments (3,214,583) 7,147,113

Net gain (loss) on investments (2,536,826) 6,755,328


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units $(2,154,776) $6,526,040

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER UNITSeries A Units $ (0.34) $ 0.97


2011 2010

NET ASSETS – BEGINNING OF PERIODSeries A Units $ 70,736,278 $ 66,245,637

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units (2,154,776) 6,526,040


Series A Units (538,219) –


Series A Units 6,632,345 10,727,729Reinvested distributions

Series A Units 533,133 4Payments on redemption

Series A Units (13,507,298) (12,763,132)

(6,341,820) (2,035,399)

INCREASE (DECREASE) IN NET ASSETSSeries A Units (9,034,815) 4,490,641

NET ASSETS – END OF PERIODSeries A Units $ 61,701,463 $ 70,736,278

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AverageCost ($)

FairValue ($)

FIXED INCOME FUNDS – 39.5%678,474 Scotia Private High Yield Income Pool Series I 6,280,765 6,100,496

1,562,251 Scotia Private Income Pool Series I 17,000,423 18,299,118

23,281,188 24,399,614

CANADIAN EQUITY FUNDS – 30.0%579,193 Scotia Private Canadian Growth Pool Series I 7,275,329 6,512,326241,531 Scotia Private Canadian Mid Cap Pool Series I 2,947,629 3,424,62492,769 Scotia Private Canadian Small Cap Pool Series I 1,628,445 2,064,635

376,449 Scotia Private Canadian Value Pool Series I 6,696,274 6,530,976

18,547,676 18,532,561

FOREIGN EQUITY FUNDS – 29.9%151,146 Scotia Private Emerging Markets Pool Series I 1,518,569 1,217,783154,429 Scotia Private Global Equity Pool Series I 1,907,520 1,854,526540,162 Scotia Private Global Real Estate Pool Series I 6,955,474 6,149,419319,016 Scotia Private International Equity Pool Series I 3,450,578 2,709,59199,011 Scotia Private International Small to Mid Cap

Value Pool Series I 1,496,047 1,236,247349,284 Scotia Private U.S. Large Cap Growth Pool

Series I 2,355,691 2,619,983254,393 Scotia Private U.S. Value Pool Series I 2,575,435 2,632,081

20,259,312 18,419,630



NET ASSETS – 100.0% 61,701,463







The table below indicates the estimated impact on the netassets of the Portfolio due to a 10% change in the respectivemarket indices, with all other variables held constant. ThePortfolio’s historical sensitivity measure may not be represen-tative of its future sensitivity measure, and accordingly, theimpact on net assets could be materially different.


2011December 31,

2010December 31,

2011December 31,

2010


DEX Universe Bond

Index – 40%,

S&P/TSX Composite

Index – 30%,



All Country World

Index – 30%

Blended Benchmark

Impact (product of

all the benchmarks

above) 6,478,654 7,498,045 10.5 10.6








December 31, 2011


Mutual Funds $61,351,805 $ – $ – $61,351,805

December 31, 2010


Mutual Funds $70,239,073 $ – $ – $70,239,073


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SPinnacle Conservative Balanced Growth Portfolio (Continued)



Pinnacle Balanced Growth Portfolio


2011 2010

ASSETSInvestments at fair value $9,160,368 $10,430,558Cash 24,700 131,202Subscriptions receivable 152 753Accounts receivable – 628

9,185,220 10,563,141

LIABILITIESAccrued expenses 728 27,350

Net Assets $9,184,492 $10,535,791


UNITS OUTSTANDINGSeries A Units 883,449 978,128



2011 2010

INVESTMENT INCOMEInterest from underlying Funds $ 282,113 $ 228,725Capital gains distributions received 12,957 33Other income 21 –

295,091 228,758



289,550 323,462


Net realized gain (loss) on investments sold 163,329 (303)Change in unrealized appreciation (depreciation) of investments (517,659) 1,068,783

Net gain (loss) on investments (354,330) 1,068,480

Increase (decrease) in Net Assets from operations $(348,789) $ 973,776

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units $(348,789) $ 973,776



2011 2010


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units (348,789) 973,776

DISTRIBUTIONS TO UNITHOLDERSFrom net investment incomeSeries A Units (5,922) –


Series A Units 786,080 712,598Reinvested distributions

Series A Units 5,858 –Payments on redemption

Series A Units (1,788,526) (3,776,996)

(996,588) (3,064,398)

INCREASE (DECREASE) IN NET ASSETSSeries A Units (1,351,299) (2,090,622)

NET ASSETS – END OF PERIODSeries A Units $ 9,184,492 $10,535,791

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FairValue ($)

FIXED INCOME FUNDS – 39.7%68,678 Scotia Private American Core-Plus Bond Pool

Series I 538,550 639,182101,311 Scotia Private High Yield Income Pool Series I 861,487 910,936178,947 Scotia Private Income Pool Series I 1,939,854 2,096,057

3,339,891 3,646,175

CANADIAN EQUITY FUNDS – 25.2%73,303 Scotia Private Canadian Growth Pool Series I 904,560 824,20820,078 Scotia Private Canadian Mid Cap Pool Series I 269,687 284,68514,842 Scotia Private Canadian Small Cap Pool Series I 262,419 330,32550,534 Scotia Private Canadian Value Pool Series I 900,636 876,713

2,337,302 2,315,931

FOREIGN EQUITY FUNDS – 34.8%28,568 Scotia Private Emerging Markets Pool Series I 281,841 230,17426,880 Scotia Private Global Equity Pool Series I 323,861 322,79979,749 Scotia Private Global Real Estate Pool Series I 741,947 907,89465,586 Scotia Private International Equity Pool Series I 706,857 557,05814,826 Scotia Private International Small to Mid Cap Value

Pool Series I 238,568 185,11240,373 Scotia Private U.S. Large Cap Growth Pool Series I 287,956 302,83817,555 Scotia Private U.S. Mid Cap Growth Pool Series I 250,092 279,17239,938 Scotia Private U.S. Value Pool Series I 424,118 413,215

3,255,240 3,198,262



NET ASSETS – 100.0% 9,184,492







The table below indicates the estimated impact on the netassets of the Portfolio due to a 10% change in the respectivemarket indices, with all other variables held constant. ThePortfolio’s historical sensitivity measure may not be represen-tative of its future sensitivity measure, and accordingly, theimpact on net assets could be materially different.


2011December 31,

2010December 31,

2011December 31,

2010


DEX Universe Bond

Index – 40%,

S&P/TSX Composite

Index – 30%,



All Country World

Index – 30%


(product of all the

benchmarks above) 946,003 1,053,579 10.3 10.0








December 31, 2011


Mutual Funds $9,160,368 $ – $ – $9,160,368

December 31, 2010


Mutual Funds $10,430,558 $ – $ – $10,430,558


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SPinnacle Balanced Growth Portfolio (Continued)



Pinnacle Conservative Growth Portfolio


2011 2010

ASSETSInvestments at fair value $8,386,553 $10,978,446Cash 108,745 215,151Subscriptions receivable 40 24,128Accounts receivable – 594

8,495,338 11,218,319

LIABILITIESRedemptions payable – 90,140Accrued expenses 750 26,832

750 116,972

Net Assets $8,494,588 $11,101,347


UNITS OUTSTANDINGSeries A Units 830,177 1,001,765



2011 2010

INVESTMENT INCOMEInterest from Underlying Funds $ 223,203 $ 140,990Capital gains distributions received 6,363 28Other income 4 –

229,570 141,018



315,248 348,757

Net investment income (loss) (85,678) (207,739)

Net realized gain (loss) on investments sold 122,016 (138,880)Change in unrealized appreciation (depreciation) of investments (786,580) 1,473,661

Net gain (loss) on investments (664,564) 1,334,781

Increase (decrease) in Net Assets from operations $(750,242) $1,127,042

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units $(750,242) $1,127,042



2011 2010


INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units (750,242) 1,127,042



Series A Units (2,816,056) (2,724,809)

(1,856,517) (1,729,853)

INCREASE (DECREASE) IN NET ASSETSSeries A Units (2,606,759) (602,811)

NET ASSETS – END OF PERIODSeries A Units $ 8,494,588 $11,101,347

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FIXED INCOME FUNDS – 19.5%55,082 Scotia Private High Yield Income Pool Series I 493,717 495,27398,812 Scotia Private Income Pool Series I 1,076,784 1,157,417

1,570,501 1,652,690

CANADIAN EQUITY FUNDS – 49.7%135,371 Scotia Private Canadian Growth Pool Series I 1,790,570 1,522,08251,299 Scotia Private Canadian Mid Cap Pool Series I 650,089 727,35419,997 Scotia Private Canadian Small Cap Pool Series I 379,235 445,04387,961 Scotia Private Canadian Value Pool Series I 1,599,957 1,526,027

4,419,851 4,220,506


Pool Series I 226,048 174,22147,596 Scotia Private U.S. Large Cap Growth Pool Series I 337,301 357,02134,243 Scotia Private U.S. Value Pool Series I 344,477 354,298

2,708,731 2,513,357



NET ASSETS – 100.0% 8,494,588









2011December 31,

2010December 31,

2011December 31,

2010


DEX Universe Bond

Index – 20%,

S&P/TSX Composite

Index – 50%,



All Country World

Index – 30%


(a product of all the

benchmarks above) 883,437 1,165,641 10.4 10.5








December 31, 2011


Mutual Funds $8,386,553 $ – $ – $8,386,553

December 31, 2010


Mutual Funds $10,978,446 $ – $ – $10,978,446


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SPinnacle Conservative Growth Portfolio (Continued)



Pinnacle Growth Portfolio


2011 2010

ASSETSInvestments at fair value $4,188,569 $5,580,569Cash 77,712 118,204Subscriptions receivable 68 1,116Accounts receivable – 277

4,266,349 5,700,166

LIABILITIESAccrued expenses 380 25,899

Net Assets $4,265,969 $5,674,267


UNITS OUTSTANDINGSeries A Units 442,315 546,560



2011 2010

INVESTMENT INCOMEInterest from underlying Funds $ 107,393 $ 75,603Capital gains distributions received 3,076 24

110,469 75,627



163,082 182,819

Net investment income (loss) (52,613) (107,192)

Net realized gain (loss) on investments sold 32,165 (130,110)Change in unrealized appreciation (depreciation) of investments (331,935) 754,644

Net gain (loss) on investments (299,770) 624,534

Increase (decrease) in Net Assets from operations $(352,383) $ 517,342

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units $(352,383) $ 517,342



2011 2010

NET ASSETS – BEGINNING OF PERIODSeries A Units $ 5,674,267 $ 5,989,639

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONSSeries A Units (352,383) 517,342



Series A Units (1,613,076) (1,427,880)

(1,055,915) (832,714)

INCREASE (DECREASE) IN NET ASSETSSeries A Units (1,408,298) (315,372)

NET ASSETS – END OF PERIODSeries A Units $ 4,265,969 $ 5,674,267

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FIXED INCOME FUNDS – 19.4%27,588 Scotia Private High Yield Income Pool Series I 248,286 248,06249,610 Scotia Private Income Pool Series I 541,811 581,094

790,097 829,156

CANADIAN EQUITY FUNDS – 34.7%51,512 Scotia Private Canadian Growth Pool Series I 646,547 579,1889,068 Scotia Private Canadian Mid Cap Pool Series I 125,398 128,5718,628 Scotia Private Canadian Small Cap Pool Series I 154,411 192,029

33,431 Scotia Private Canadian Value Pool Series I 571,878 579,992

1,498,234 1,479,780


Pool Series I 112,117 85,12425,078 Scotia Private U.S. Large Cap Growth Pool Series I 177,983 188,1088,069 Scotia Private U.S. Mid Cap Growth Pool Series I 118,781 128,323

15,874 Scotia Private U.S. Mid Cap Value Pool Series I 146,229 127,32717,274 Scotia Private U.S. Value Pool Series I 185,165 178,721

2,090,170 1,879,633



NET ASSETS – 100.0% 4,265,969









2011December 31,

2010December 31,

2011December 31,

2010


DEX Universe Bond

Index – 20%,

S&P/TSX Composite

Index – 50%,



All Country World

Index – 30%

Blended Benchmark

Impact (product of all

the benchmarks above) 418,065 550,404 9.8 9.7








December 31, 2011


Mutual Funds $4,188,569 $ – $ – $4,188,569

December 31, 2010


Mutual Funds $5,580,569 $ – $ – $5,580,569


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SPinnacle Growth Portfolio (Continued)



Notes to the Financial Statements

1. The FundsAll of the Scotia Private Pools and Pinnacle Portfolios pre-sented in these financial statements (individually, a “Fund”and collectively, the “Funds”) are open-ended mutual fundtrusts established under the laws of the Province of Ontariopursuant to an amended and restated master declaration oftrust (“Declaration of Trust”) dated as at November 24, 2011,as amended and/or restated from time to time. The inceptiondate for each Fund is as follows:

Scotia Private Short Term Income Pool (formerly, Pinnacle September 3, 1997

Short Term Income Fund)

Scotia Private Income Pool (formerly, Pinnacle Income Fund) September 3, 1997

Scotia Private High Yield Income Pool (formerly, Pinnacle September 3, 1997

High Yield Income Fund)

Scotia Private American Core-Plus Bond Pool (formerly, January 28, 2002

Pinnacle American Core-Plus Bond Fund)

Scotia Private Strategic Balanced Pool (formerly, Pinnacle September 3, 1997

Strategic Balanced Fund)

Scotia Private Canadian Value Pool (formerly, Pinnacle September 3, 1997

Canadian Value Equity Fund)

Scotia Private Canadian Mid Cap Pool (formerly, Pinnacle January 28, 2002

Canadian Mid Cap Equity Fund)

Scotia Private Canadian Growth Pool (formerly, Pinnacle September 3, 1997

Canadian Growth Equity Fund)

Scotia Private Canadian Small Cap Pool (formerly, Pinnacle September 3, 1997

Canadian Small Cap Equity Fund)

Scotia Private U.S. Value Pool (formerly, Pinnacle September 3, 1997

American Value Equity Fund)

Scotia Private U.S. Mid Cap Value Pool (formerly, Pinnacle January 28, 2002

American Mid Cap Value Equity Fund)

Scotia Private U.S. Large Cap Growth Pool (formerly, January 18, 2001

Pinnacle American Large Cap Growth Equity Fund)

Scotia Private U.S. Mid Cap Growth Pool (formerly, September 3, 1997

Pinnacle American Mid Cap Growth Equity Fund)

Scotia Private International Equity Pool (formerly, September 3, 1997

Pinnacle International Equity Fund)

Scotia Private International Small to Mid Cap Value Pool January 28, 2002

(formerly, Pinnacle International Small to Mid Cap Value

Equity Fund)

Scotia Private Emerging Markets Pool (formerly, Pinnacle September 8, 2010

Emerging Markets Equity Fund)

Scotia Private Global Equity Pool (formerly, Pinnacle September 3, 1997

Global Equity Fund)

Scotia Private Global Real Estate Pool (formerly, Pinnacle January 28, 2002

Global Real Estate Securities Fund)

(the “Scotia Private Pools”)

Pinnacle Balanced Income Portfolio April 22, 2005

Pinnacle Conservative Balanced Growth Portfolio April 22, 2005

Pinnacle Balanced Growth Portfolio April 22, 2005

Pinnacle Conservative Growth Portfolio April 22, 2005

Pinnacle Growth Portfolio April 22, 2005

(the “Pinnacle Portfolios”)

The Statement of Investment Portfolio of each of the Fundsis as at December 31, 2011. The Statements of Net Assets areas at December 31, 2011 and 2010, and the Statements ofOperations and Statements of Changes in Net Assets are forthe periods ended December 31, 2011 and 2010. For Funds orSeries* started during either period, the information pre-sented is for the period from the Fund inception date (asnoted above) or Series start date, respectively, to

December 31, 2011 or 2010, as applicable. Throughout thisdocument, reference to the reporting period refers to thereporting period described above.

The manager and trustee of the Funds is Scotia AssetManagement L.P. (“SAM” or the “Manager”).

Each of the Funds may offer one or more Series of securities:Pinnacle Series/Series A units, Series F units, Series I units,and Series M units. Each Series of a Fund is authorized toissue unlimited number of units, which are redeemable at theoption of the unitholder at their respective net asset valuenext determined following receipt of the sell order by theFund. Each Series of units of a Fund is intended for differentinvestors. A description of each Series of units is providedbelow:

• Series A units are only available through ScotiaMcLeod orotherwise permitted by the Manager.

• Pinnacle Series units are only available to investors whoparticipate in the Pinnacle program, through ScotiaMcLeodadvisors or as otherwise permitted by the Manager.

• Series F units are generally available to investors who havefee-based accounts with ScotiaMcLeod.

• Series I units are available to eligible institutional inves-tors and other qualified investors. Series I units arecurrently only available through SAM.

• Series M units are available to investors who have signed adiscretionary investment management agreement with SAMor Scotiatrust.

*Effective November 24, 2011, the designation of Class Aunits of the Pinnacle Portfolios changed to Series A units andthe designation of the units of the Scotia Private Poolschanged as follows:

Previous Designation New Designation

Class A Pinnacle Series

Class F Series F

Class I Series I

Manager Class Series M

2. Summary of Significant Accounting PoliciesThese financial statements are prepared in accordance withCanadian generally accepted accounting principles (“GAAP”).In applying Canadian GAAP, the Manager may make estimatesand assumptions that may affect the reported amounts in thefinancial statements. Actual results may differ from suchestimates. The significant accounting policies followed by theFunds for the reporting period are summarized below.

(a) Financial Instrument Disclosures

Financial Instrument disclosures include a three level fairvalue hierarchy which provides information about the relativeobservability of inputs to the fair value measurement of

87

financial assets and liabilities. The levels are defined asfollows:

• Level 1: Fair value is based on unadjusted quoted prices inactive markets for identical assets or liabilities;

• Level 2: Fair value is based on inputs other than quotedprices included in level 1 that are observable for the assetsor liabilities, either directly or indirectly. This is inclusiveof bonds and debentures that are based on multi-dealerpricing, short-term notes carried at amortized cost, foreignequity securities in markets closing before 4:00 p.m. East-ern time and securities infrequently traded and consideredless illiquid; and

• Level 3: Fair value is based on at least one significant non-observable input that is not supported by market data forthe financial assets or liabilities.

The three level fair value hierarchy is disclosed in therespective Fund’s “Supplementary Schedules”.

(b) Valuation of Investments

The fair values of investments are determined as follows:

(i) In accordance with Accounting Guideline 18, “Invest-ment Companies”, investments are deemed to be cat-egorized as held-for-trading and are required to berecorded at fair value, as defined in Canadian Insti-tute of Charter Accountants (“CICA”) Handbook Sec-tion 3855, “Financial Instruments – Recognition andMeasurement”. Investments that are traded in anactive market on a recognized public stock exchangeand over-the-counter markets are valued at their bidprices for investments held and ask prices for invest-ments sold short. Securities held with no availablebid, or quoted value determined by the Manager to beinaccurate or unreliable, are valued in such a manneras, in the opinion of the Manager; most accuratelyreflect the asset’s fair value. The application of Sec-tion 3855 impacts the valuation and disclosure of thenet assets of an investment fund for financial report-ing purposes (“Net Assets”). The value used to deter-mine the Funds’ daily price for purchase andredemption of units (“Pricing NAV” or “Net Asset ValuePer Unit”) is not affected by this accounting policy. Areconciliation of Net Asset Value per unit and NetAssets per unit of each Fund is provided in Note 13.

(ii) North American Equities are valued at last bid or askmarket price for long and short positions recorded bythe security exchange on which the security is princi-pally traded. Non-North American equities are valuedat fair value provided by independent pricing sources.

(iii) Fixed income securities including bonds and mort-gage-backed securities are valued at the average cur-rent bid price quoted by major dealers in suchsecurities.

(iv) Short-term debt instruments are carried at amortizedcost, which in the opinion of the Manager, approxi-mates fair value.

(c) Foreign Currency

Amounts denominated in foreign currencies are convertedinto Canadian dollars as follows:

(i) fair value of investments, forward and spot currencycontracts and other assets and liabilities at the ratesof exchange prevailing as at the valuation date; and

(ii) purchase and sale of investments and investmentincome at the rates of exchange prevailing on therespective dates of such transactions.

(d) Investment Transactions and Income Recognition

Investment transactions are accounted for on a trade datebasis. Transaction costs directly attributable to the acquisitionor disposal of an investment are expensed and are includedin “Transaction costs” in the Statements of Operations. Theinvestment cost of a security represents the amount paid andis determined on an average cost basis excluding transactioncosts.

Dividend income and distributions from underlying funds arerecognized on the ex-dividend date and interest income isrecognized on an accrual basis.

Distribution received from income trusts are recognized basedon the nature of the underlying components such as dividendincome, interest income, capital gains, and return of capitalby applying previous year characterizations reported by thetrust. Differences, if any, between the current year andprevious year’s characterizations reported by the trust in theunderlying components are reported in the following yearwhen the characterizations become available.

Realized gains and losses on the sale of short-term debtinstruments are recorded in interest income.

Income, realized gain (loss) and unrealized gain (loss) areallocated among the unit Series on a pro rata basis.

(e) Foreign Currency Forward Contracts

Realized gains or losses on foreign currency forward contractsarise as a result of the closing of a position on the settlementdate. The net realized gain or loss is reported as “Net realizedgain (loss) on currency forwards” in the Statements ofOperations. Open foreign exchange forward contracts arevalued at the gain or loss that would arise as a result ofclosing the position on the valuation date. The unrealizedgain or loss, for the reporting period, is reflected in theStatements of Operations as “Change in unrealized apprecia-tion (depreciation) of currency forwards”.

(f) Futures Contracts

Futures contracts are valued at their bid prices for financialreporting purposes at the close of business on each valuationdate of the reporting period. Any difference between the

88

settlement value at the close of business on the currentvaluation date and that of the previous valuation date issettled in cash daily and recorded in the Statements ofOperations as net realized gain (loss) on futures. Amountsreceivable (payable) from (to) settlement of futures con-tracts are reflected in the Statements of Net Assets as futuresmargin receivable (payable).

(g) Warrants

Unlisted warrants are valued using the Black-Scholes optionvaluation model. The model factors in the time value ofmoney and volatility inputs significant to such valuation.

(h) Options

Options are valued at their bid price for long positions andtheir ask price for short positions as reported by the principalexchange or over-the-counter market on which the contractsare traded. Any difference resulting from the revaluation atthe reporting date is treated as unrealized gain or loss oninvestments.

Premiums paid for purchased call and put options areincluded in investments at fair value on the Statements ofNet Assets. When a purchased option expires, the Fund willrealize a loss in the amount of the cost of the option. For theclosing transaction, the Fund will realize a gain or lossdepending on whether the proceeds are greater or less thanthe premium paid at the time of purchase. When a purchasedcall option is exercised, the cost of the security purchased isincreased by the premium paid at the time of purchase.

Premiums received from writing options are included ininvestments at fair value on the Statement of Net Assets asinitial reductions in the value of investments. When a writtenoption expires unexercised, premiums received from writingoptions are recorded as realized gain on the Statement ofOperations. For the closing transaction of written options, theFund will record a realized loss if the cost of closing thetransaction exceeds the premium received; the Fund willrecord a realized gain if the premium received at the time ofthe option was written is greater than the amount paid forclosing the transaction. When a written put is exercised, thecost of the security purchased is reduced by the premiumsreceived at the time the option was written.

(i) Valuation of Underlying Funds

Investments in underlying funds (“Portfolios”) are valued atthe Series’ NAV per unit provided by the underlying funds’manager at the end of each valuation date.

(j) Forward Commitments/Dollar Roll

Some Funds may contract to purchase securities for a fixedprice at a future date beyond customary settlement time (i.e.,a “forward commitment”, “delayed settlement” or “whenissued” transaction, e.g., to be announced (“TBA”)) consistentwith a Fund’s ability to manage its investment portfolio andmeet redemption requests. For example, the Funds may enterinto dollar rolls (principally in TBAs) in which the Funds

purchase securities. The price of the securities and the datewhen securities will be delivered and paid for are fixed at thetime the transaction is negotiated. The Funds may dispose ofthat forward commitment transaction prior to settlement if itis appropriate to do so and realize short-term gains (losses)upon such sale. When affecting such transactions, cash orcash equivalents in a dollar amount sufficient to makepayment for the portfolio securities to be purchased will besegregated by the Fund at the trade date and maintaineduntil the transaction is settled. These instruments are listedin the Statements of Investment Portfolio with the corre-sponding liability as payable for securities purchases on theStatements of Net Assets. A forward commitment transactioninvolves a risk of loss if the value of the securities to bepurchased declines prior to the settlement date or the otherparty to the transaction fails to complete the transaction.

(k) Other Assets and Liabilities

Financial assets and liabilities, other than investment securi-ties, cash and derivative instruments are valued at cost oramortized cost. These balances are short-term in nature;therefore, their carrying values approximate fair value.

(l) Securities Lending

Certain of the Funds may enter into securities lendingtransactions. These transactions involve the temporaryexchange of securities for collateral with a commitment toreturn the same securities on a future date. The incomeearned from these securities lending transactions is recordedin the Statements of Operations as securities lending income.The fair value of the securities lent and collateral held isdetermined on a daily basis.

(m) Increase (Decrease) in Net Assets from Operation per Unit

“Increase (decrease) in net assets from operations per unit”is disclosed in the Statements of Operations and represents,for each Series of units, the increase or decrease in the netassets from operations for the period attributable to eachSeries divided by the average number of units outstanding forthe corresponding Series during the period.

3. Discussion of Financial Instrument RiskEach Fund’s investment activities expose it to a variety offinancial risks: market risk (including interest rate risk,currency risk, and other price risk), credit risk and liquidityrisk. Each Fund’s investment practices include portfolio mon-itoring to ensure compliance with stated investment guide-lines. The Manager seeks to minimize potential adverseeffects of risks on each Fund’s performance by employing andoverseeing professional and experienced portfolio advisorsthat regularly monitor each Fund’s securities and financialmarket developments. The risks are measured using a methodthat reflects the expected impact on the results and netassets attributable to unitholders of the Funds from reason-ably possible changes in the relevant risk variables.

89

Portfolios invest in underlying funds. They are indirectlyexposed to market risk, credit risk and liquidity risk in theevent that the underlying funds invest in financial instru-ments that are subject to those risks.

A Fund’s exposure to market risk, credit risk and liquidityrisk, where applicable, is disclosed in the respective Fund’sSupplementary Schedules. Where the exposure to a particularrisk is not disclosed, the Manager has assessed the potentialimpact of that risk to be not significant.

(a) Market Risk(i) Interest rate riskInterest rate risk arises from the possibility that changes ininterest rates will affect the future cash flows or the fairvalues of interest-bearing financial instruments. Each Fund’sexposure to interest rate risk is concentrated in its invest-ments in debt securities (such as bonds and debentures) andinterest rate derivative instruments, if any. Short-term invest-ments and other assets and liabilities are short-term innature and/or non-interest bearing and not subject to signifi-cant amount of interest rate risk due to fluctuations in theprevailing levels of market interest rates.

(ii) Currency riskCurrency risk is the risk that the value of foreign investmentswill fluctuate due to changes in the foreign exchange rates ofthose currencies in relation to each Fund’s functional cur-rency, which is the Canadian dollar unless otherwise stated.Other financial assets (including dividends and interestreceivable and receivable for investments sold) and financialliabilities that are denominated in foreign currencies do notexpose the Fund to significant currency risk.

Funds may enter into foreign exchange forward contracts orcurrency futures contracts for hedging purposes to reduceforeign currency exposure.

(iii) Other price riskOther price risk is the risk that the fair value of a Fund’sfinancial instruments will fluctuate as a result of changes inmarket prices (other than those arising from interest rate orcurrency risk). The impact on Net Assets of a Fund is basedon a 10% change in the respective stock index using ahistorical measure of the sensitivity of the Fund’s returnrelative to the return of its benchmark stock index with allother variables held constant.

(b) Credit risk

Credit risk is the risk that the counterparty of a financialinstrument will fail to discharge an obligation or commitmentthat it has entered into with the Fund. Where the Fundinvests in debt instruments, this represents the main concen-tration of credit risk. The fair value of debt instrumentsincludes consideration of the creditworthiness of the issuer,and accordingly, represents the maximum credit risk exposureto the Fund. Credit risk may also exist in relation to counter-parties of futures and currency forward contracts. The risk ofdefault is considered minimal, as delivery of securities sold is

only made once the broker has received payment. Payment isonly made on a purchase once the securities have beenreceived by the broker. Cash and securities are held atcustodians with credit ratings of at least AA� per Standard &Poor’s rating system.

A Fund may enter into securities lending transactions withcounterparties whereby the Fund temporarily exchanges secu-rities for collateral with a commitment by the counterparty todeliver the same securities on a future date. Credit riskassociated with these transactions is considered minimal asall counterparties have a sufficient, approved credit ratingand the market value of cash or securities held as collateralmust be at least 104% of the fair value of the securitiesloaned as at the end of each trading day.

(c) Liquidity risk

A Fund’s exposure to liquidity risk arises primarily from thedaily cash redemption of units. Each Fund primarily investsin securities that are traded in active markets and can bereadily disposed. In addition, each Fund aims to retainsufficient cash and cash equivalent positions to maintainliquidity, and has the ability to borrow up to 5% of its NetAsset Value for the purpose of funding redemptions. A Fundmay, from time to time, enter into over-the-counter derivativecontracts or invest in securities that are not traded in anactive market and may be illiquid. Illiquid securities areidentified in the respective Fund’s Statement of InvestmentPortfolio.

4. Unitholders’ EquityUnits issued and outstanding represent the capital of eachFund. Each of the Funds may issue an unlimited number ofunits. Each unit is redeemable at the option of the unitholderin accordance with the Declaration of Trust, ranks pari passuwith all other units of the Fund and entitles the unitholderto a proportionate undivided interest in the Net Asset Valueof the Fund. Unitholders are entitled to distributions whendeclared. Distributions on units of a Fund are reinvested inadditional units of the Fund or at the option of the unit-holder, paid in cash. The Funds have no restrictions oncapital or specific capital requirements. SAM manages thecapital of the Funds in accordance with the Funds’ invest-ment objectives.

The units of each Series of the Funds are issued andredeemed at their Pricing NAV per unit of each Series, whichis determined as of the close of business on each day thatthe Toronto Stock Exchange is open for trading. The PricingNAV per unit is calculated by dividing the net assets attribut-able to a Series by the total number of outstanding units ofthe Series.

On September 20, 2010, Scotia Private Income Pool, ScotiaPrivate High Yield Income Pool, Scotia Private CanadianValue Pool, Scotia Private Canadian Growth Pool, Scotia

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Private U.S. Large Cap Growth Pool and Scotia PrivateCanadian Mid Cap Pool commenced their offering of Series Iunits; Scotia Private High Yield Income Pool, Scotia PrivateU.S. Mid Cap Value Pool and Pinnacle American Mid CapGrowth Equity Fund commenced their offering of Series M.

On January 20, 2009, Scotia Private American Core-Plus BondPool, Scotia Private Global Real Estate Securities Pool, ScotiaPrivate Canadian Small Cap Pool, Scotia Private U.S. ValuePool, Scotia Private International Equity Pool and ScotiaPrivate Global Equity Pool commenced their offering ofSeries I units.

On February 17, 2009, Scotia Private Short Term Income Pool,Scotia Private Income Pool, Scotia Private High Yield IncomePool, Scotia Private American Core-Plus Bond Pool, Scotia

Private Global Real Estate Securities Pool, Scotia PrivateStrategic Balanced Pool, Scotia Private Canadian Value Pool,Scotia Private Canadian Mid Cap Pool, Scotia Private Cana-dian Growth Pool, Scotia Private Canadian Small Cap Pool,Scotia Private U.S. Value Pool, Scotia Private U.S. Mid CapValue Pool, Scotia Private U.S. Large Cap Growth Pool, ScotiaPrivate U.S. Mid Cap Growth Pool, Scotia Private Interna-tional Equity Pool, Scotia Private International Small to MidCap Value Pool and Scotia Private Global Equity Pool com-menced their offering of Series F units.

For the periods end ended December 31, 2011 and 2010, thefollowing numbers of units were issued, re-invested andredeemed:

FundsUnitsIssued

UnitsReinvested

UnitsRedeemed (i)

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

2011 2010

Scotia Private Short Term Income Pool

Pinnacle Series Units 330,996 4,744 807,497 2,161,693 2,916 2,678,783

Series F Units 1,054 2 61 11,899 9 11,908

Scotia Private Income Pool

Pinnacle Series Units 3,964,213 984,447 5,305,392 5,217,506 1,015,631 9,706,858

Series F Units 479,077 7,277 14,160 130,493 3,143 36,743

Series I Units 360,733 115,930 889,057 2,854,489 17,083 39,335

Scotia Private High Yield Income Pool

Pinnacle Series Units 1,846,464 879,358 3,275,222 1,883,717 1,065,891 5,951,980

Series F Units 144,053 14,311 135,106 253,049 16,332 61,910

Series I Units 29,737 67,046 205,648 1,123,037 13,852 12,278

Series M Units 7,075,380 189,658 928,613 200,957 1,271 754

Scotia Private American Core-Plus Bond Pool

Pinnacle Series Units 907,321 97,769 749,247 660,472 88,802 1,346,979

Series F Units 3,301 360 78 1,372 185 2,198

Series I Units 5,474,078 589,724 97,741 9,534,880 267,347 3,208,624

Scotia Private Strategic Balanced Pool

Pinnacle Series Units 338,767 73,996 1,053,760 400,912 93,568 895,257

Series F Units 517 67 – 5,539 72 1,298

Scotia Private Canadian Value Pool


Series F Units 5,786 189 5,414 13,281 187 13,335

Series I Units 141,202 13,110 153,560 603,312 496 31,548

Scotia Private Canadian Mid Cap Pool


Series F Units 1,766 7 559 3,241 27 4,892

Series I Units 48,286 4,055 56,785 368,064 805 42,449

Scotia Private Canadian Growth Pool

Pinnacle Series Units 1,170,661 129,295 1,686,787 1,579,255 134,849 3,618,042

Series F Units 17,194 294 7,335 23,948 103 10,790

Series I Units 211,455 15,630 239,853 1,012,869 851 61,724

Scotia Private Canadian Small Cap Pool


Series F Units 4,237 95 14,847 13,745 438 29,317

Series I Units 2,065,230 174,628 62,208 2,747,263 55,549 45,286

91

FundsUnitsIssued

UnitsReinvested

UnitsRedeemed (i)

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

2011 2010

Scotia Private U.S. Value Pool

Pinnacle Series Units 570,149 66,690 1,162,882 728,677 70,971 1,732,420

Series F Units 1,359 24 2,995 4,183 45 2,088

Series I Units 4,541,387 255,608 103,634 5,891,206 73,991 20,051

Scotia Private U.S. Mid Cap Value Pool

Pinnacle Series Units 183,789 3,223 240,298 208,531 7,250 862,278

Series F Units 447 – 762 2,967 1 2,206

Series I Units 1,302 27 5,170 23,189 54 3,528

Series M Units 167,885 1,021 87,206 282,297 25 4,352

Scotia Private U.S. Large Cap Growth Pool

Pinnacle Series Units 675,676 33,993 1,164,733 662,070 36,843 2,285,149

Series F Units 5,121 9 4,258 6,086 4 2,874

Series I Units 30,335 5,235 100,884 579,778 721 52,853

Scotia Private U.S. Mid Cap Growth Pool

Pinnacle Series Units 76,800 – 154,706 57,902 – 297,934

Series F Units 738 – 471 1,541 – 1,451

Series I Units 1,183,354 – 17,683 2,072,741 – 2,315

Series M Units 874,558 – 699,114 1,396,957 – 8,164

Scotia Private International Equity Pool


Series F Units 25,488 295 7,565 12,479 116 6,736

Series I Units 11,716,835 517,230 303,751 13,653,178 234,952 5,488,559

Scotia Private International Small to Mid Cap Value Pool


Series F Units 2,324 50 1,969 3,708 31 2,746

Series I Units 7,253 3,924 13,087 293,813 – 123,881

Scotia Private Emerging Markets Pool

Pinnacle Series Units 1,146,789 36,928 494,781 1,928,631 467 78,101

Series I Units 4,273,491 159,186 3,792 4,937,711 620 2,031

Series M Units 2,559,312 17,929 2,281,643 2,517,475 – 8,355

Scotia Private Global Equity Pool


Series F Units 7,512 60 3,052 8,379 32 5,185

Series I Units 5,248,153 179,333 44,255 5,623,839 53,539 18,273

Scotia Private Global Real Estate Pool


Series F Units 5,044 229 6,412 7,234 443 28,635

Series I Units 1,776,003 181,270 194,450 2,847,428 53,867 380,773


Series A Units 299,350 20,645 207,108 325,476 4,226 160,758


Series A Units 621,081 51,917 1,278,911 1,079,508 – 1,281,879


Series A Units 72,452 563 167,694 70,981 – 373,560


Series A Units 87,288 – 258,876 97,425 – 265,953


Series A Units 54,597 – 158,842 62,272 – 148,482

(i) Included in units redeemed are redemptions related to payments of the Pinnacle Program Fee, where applicable.

92

5. Management FeesThe Funds’ management fees are calculated daily and paidmonthly. The Manager is entitled to a maximum annualmanagement fee, exclusive of sales taxes, as follows:

Series AUnits

Series FUnits

Series MUnits

% of Net Asset Value

Scotia Private Short Term Income Pool – 0.50% –

Scotia Private Income Pool – 0.70% –

Scotia Private High Yield Income Pool – 0.75% 0.30%

Scotia Private American Core-Plus Bond Pool – 0.75% –

Scotia Private Strategic Balanced Pool – 1.00% –

Scotia Private Canadian Value Pool – 1.00% –

Scotia Private Canadian Mid Cap Pool – 1.00% –

Scotia Private Canadian Growth Pool – 1.00% –

Scotia Private Canadian Small Cap Pool – 1.00% –

Scotia Private U.S. Value Pool – 1.00% –

Scotia Private U.S. Mid Cap Value Pool – 1.00% 0.55%

Scotia Private U.S. Large Cap Growth Pool – 1.00% –

Scotia Private U.S. Mid Cap Growth Pool – 1.00% 0.55%

Scotia Private International Equity Pool – 1.00% –

Scotia Private International Small to Mid Cap Value Pool – 1.00% –

Scotia Private Emerging Markets Pool – – 0.70%

Scotia Private Global Equity Pool – 1.00% –

Scotia Private Global Real Estate Pool – 1.00% –

Pinnacle Portfolios

Pinnacle Balanced Income Portfolio 1.85% – –

Pinnacle Conservative Balanced Growth Portfolio 2.10% – –

Pinnacle Balanced Growth Portfolio 2.10% – –

Pinnacle Conservative Growth Portfolio 2.40% – –

Pinnacle Growth Portfolio 2.40% – –

Management fees disclosed for the Pinnacle Portfolios aboveare inclusive of the management fees charged to the Underly-ing Funds. There is no duplication of fees. Management feesare not charged on Series I units. Fees for services of theManager payable by Series I investors are negotiable by theinvestor and are payable directly to the Manager.

No management fees are charged by the Manager in respectof the Pinnacle Series units of the Scotia Private Pools.

6. Operating ExpensesThe Funds are responsible for all expenses relating to theoperations and conduct of business. These expenses include:taxes; interest; brokerage commissions for the purchase andsale of portfolio securities; legal; audit; trustee; custodial andsafekeeping fees; administrative costs; investor servicingcosts; and the cost of reports and prospectuses.

The ratio of operating expenses (excluding taxes, interestand brokerage commissions) expressed as a percentage ofthe average daily NAV of the respective Fund is referred to asthe operating expense ratio. The operating expense ratio ofPinnacle Series of each Scotia Private Pool may not exceed0.50% on an annualized basis as specified in the Scotia

Private Pools’ simplified prospectus. Each Series of the Fundsincurs the expenses which are directly attributable to thatSeries. Common expenses of the Fund are allocated on a prorata basis to each Series of the Fund based on its respectiveNAV.

The Manager, in its’ sole discretion, absorbs operatingexpenses otherwise payable by certain Series. The absorbedexpenses are reflected in the Statements of Operations.

7. Pinnacle Program FeeEach Pinnacle Series unitholder of the Scotia Private Poolshas agreed to pay, on a quarterly basis, a negotiated assetbased fee for all services in respect of their respectiveinvestment in the Scotia Private Pools. These fees are paid toScotiaMcLeod by redemption of units held in the ScotiaPrivate Pools, unless otherwise determined by ScotiaMcLeod.

8. Harmonized Sales Tax (“HST”)On July 1, 2010 the Ontario and British Columbia Retail SalesTaxes were combined with the Federal Goods and Service Tax(“GST”) to create a federally administered Harmonized SalesTax (“HST”). In addition, the place of supply for goods andservices rule has changed. Under the previous rule, thesupplier did not collect provincial sales tax (“PST”) unlessthe supplier carried on business in a particular province.Under the new supplier rule, the supplier of services shouldcharge and collect sales tax based on the Canadian addressof recipients. As a result, the net sales tax charged onmanagement fees and applicable expenses to each Fund Seriesrepresent the weighted average GST/HST rates, which arebased on the residency of the unitholders. The implementa-tion of HST and change in place of supply rule has generallyincreased the amount of taxes paid by the Fund and thereforeincreased the expenses incurred by unitholders.

9. Income TaxesThe Funds qualify as mutual fund trusts under the IncomeTax Act (Canada). Each of the Funds distributes sufficientamounts of its taxable net investment income and netrealized taxable capital gains, less the amount required toenable each Fund to utilize any available tax credit attribut-able to redemptions during the period, to its unitholders.Such income is taxable in the hands of the unitholders.Accordingly, no provision for income taxes has been recordedin these financial statements.

Net capital losses may be carried forward indefinitely to reducefuture net realized taxable capital gains. Non-capital losses forincome tax purposes may be carried forward for up to twentyyears and applied against capital gains realized and net income

93

in future years. The following Funds have net capital and non-capital loss carry forwards as at December 15, 2011.

FundsYear ofexpiry

Non-CapitalLoss $

CapitalLoss $

Scotia Private High Yield Income Pool – – 19,651,702

Scotia Private Strategic Balanced Pool – – 10,777,531

Scotia Private Canadian Value Pool – – 12,374,238

Scotia Private Canadian Mid Cap Pool – – 3,918,194

Scotia Private Canadian Growth Pool – – 35,891,106

Scotia Private U.S. Value Pool – – 14,030,656

Scotia Private U.S. Mid Cap Value Pool – – 6,413,705

Scotia Private U.S. Large Cap Growth Pool – – 20,326,612

Scotia Private U.S. Mid Cap Growth Pool 2029 96,073 53,501,858

2030 13,742 –

Scotia Private International Equity Pool – – 74,022,423

Scotia Private International Small to Mid Cap ValuePool – – 27,970,116

Scotia Private Global Equity Pool – – 28,398,759

Scotia Private Global Real Estate Pool – – 28,905,736

Pinnacle Balanced Income Portfolio – – 347,711

Pinnacle Conservative Balanced Growth Portfolio – – 2,610,034

Pinnacle Balanced Growth Portfolio – – 999,301

Pinnacle Conservative Growth Portfolio 2030 204,326 1,420,745

Pinnacle Growth Portfolio 2028 105 862,282

2029 10,355 –

2030 106,260 –

10. Soft Dollar CommissionsThe ascertainable soft dollar arrangements in connection withinvestment portfolio transactions for the periods endedDecember 31, 2011 and 2010 are set out below.

Funds 2011 2010

Scotia Private Canadian Mid Cap Pool $ 12,280 $15,520

Scotia Private Canadian Growth Pool 9,627 1,200

Scotia Private Canadian Small Cap Pool 10,415 10,229

Scotia Private U.S. Value Pool 108,395 12,493

Scotia Private U.S. Mid Cap Value Pool 21,614 5,629

Scotia Private U.S. Mid Cap Growth Pool 85,075 45,601

Scotia Private International Equity Pool 3,367 3,099

Scotia Private International Small to Mid Cap Value Pool 59,007 45,293

Scotia Private Emerging Markets Pool 29,009 6,919

Scotia Private Global Equity Pool 13,655 13,617

Soft dollar commissions are arrangements pursuant to whichproducts or services, other than execution of portfolio securi-ties transactions, are obtained by an adviser from or througha broker-dealer in exchange for directing client portfoliotransactions to the broker-dealer.

11. Securities LendingEffective March 21, 2011, the Funds have entered into asecurities lending program with their custodian, the Bank of

Nova Scotia (“BNS”). The aggregate market value of allsecurities loaned by a Fund cannot exceed 50% of the NAV ofsuch Fund. The Funds receive collateral of at least 102% ofthe value of the securities on loan. Collateral is received inthe form of debt obligations of the Government of Canada,Canadian provincial and municipal governments or financialinstitutions rated at least either A-1 /P-1 or a single A creditrating and is not included in the statements of investmentportfolio. The aggregated market value of the securities thatare on loan and the collateral received by the Scotia PrivatePools as at December 31, 2011 and 2010 are as follows:

FundsFair Market Value ofSecurities Loaned

Fair Market Value ofCollateral Received

2011

Scotia Private Income Pool $34,471,950 $36,218,676Scotia Private High Yield Income Pool 15,932,810 16,728,880Scotia Private American Core-Plus Bond Pool 5,933,322 6,232,372Scotia Private Strategic Balanced Pool 4,421,146 4,660,574Scotia Private Canadian Value Pool 2,506,841 2,672,694Scotia Private Canadian Mid Cap Pool 4,533,040 4,758,712Scotia Private Canadian Growth Pool 9,427,064 9,887,428Scotia Private Canadian Small Cap Pool 14,916,609 15,660,249Scotia Private U.S. Value Pool 3,943,303 4,138,220Scotia Private U.S. Large Cap Growth Pool 163,776 172,239Scotia Private U.S. Mid Cap Growth Pool 2,002,712 2,101,640Scotia Private International Small to Mid Cap

Value Pool 335,587 363,373Scotia Private Emerging Markets Pool 797,362 836,810Scotia Private Global Equity Pool 428,591 450,739Scotia Private Global Real Estate Pool 7,797,859 8,185,586

FundsFair Market Value ofSecurities Loaned

Fair Market Value ofCollateral Received

2010

Scotia Private Income Pool $29,145,176 $30,585,461Scotia Private High Yield Income Pool 11,413,467 11,965,775Scotia Private Strategic Balanced Pool 266,585 280,717Scotia Private Canadian Mid Cap Pool 5,215,926 5,551,127Scotia Private Canadian Growth Pool 4,183,739 4,377,071Scotia Private Canadian Small Cap Pool 3,341,230 3,531,689Scotia Private U.S. Value Pool 6,717 7,159Scotia Private U.S. Mid Cap Value Pool 342,762 360,488Scotia Private U.S. Large Cap Growth Pool 274,382 279,674Scotia Private U.S. Mid Cap Growth Pool 84,365 89,066Scotia Private International Small to Mid Cap

Value Pool 454,522 477,277Scotia Private Global Real Estate Pool 974,083 995,431

12. Related Party Transactions(a) SAM is wholly owned by BNS and is the trustee andmanager of the Funds. SAM earns a fee for acting as trusteeand manager.

(b) Units of the Funds are distributed through brokers anddealers which include Scotia Capital Inc. (“SCI”), DWMSecurities Inc. (“DWMI”), and Dundee Private Investors Inc.(“DPII”) all wholly-owned subsidiaries of BNS and relatedparties to SAM.

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(c) As of January 28, 2011, Dundee Securities Corporationceased to be a related party to SAM. There were no brokeragefees paid to Dundee Securities Corporation from January 1 toJanuary 28, 2011.

The Funds may also invest in securities issued by BNS andexecute portfolio transactions through SCI. The brokeragefees paid to related parties for the periods endedDecember 31, 2011 and 2010 are as follows:

FundsScotia

Capital Inc.Dundee Securities

Corporation*

2011

Scotia Private Strategic Balanced Pool $ 2,176 $ –Scotia Private Canadian Value Pool 8,522 –Scotia Private Canadian Mid Cap Pool 12,255 –Scotia Private Canadian Growth Pool 11,757 –Scotia Private Canadian Small Cap Pool 21,807 –Scotia Private Global Real Estate Pool 5,351 –

FundsScotia

Capital Inc.Dundee Securities

Corporation

2010

Scotia Private Strategic Balanced Pool $ 1,005 $ –Scotia Private Canadian Value Pool 9,350 –Scotia Private Canadian Mid Cap Pool 5,597 –Scotia Private Canadian Growth Pool 16,005 317Scotia Private Canadian Small Cap Pool 24,250 –Scotia Private Global Real Estate Pool 10,613 –

* As of January 28, 2011, Dundee Securities Corporation ceased to be a related party toSAM. Therefore, the brokerage fees paid to Dundee Securities Corporation were forthe period from January 1 to January 28, 2011.

(d) Effective March 15, 2011, BNS replaced State StreetTrust Company Canada as the Custodian for all the ScotiaPrivate Pools and Pinnacle Portfolios. As custodian, BNSearns a fee for providing custody and related services. TheScotia Private Emerging Markets Pool’s custodian fees aredisclosed in a separate line item on Statement of Operations.Except for the Scotia Private Emerging Markets Pool, theamount of fees paid to BNS for custody and related servicesin fiscal year 2011, is as follows:

Funds

Scotia Private Short Term Income Pool $ 365

Scotia Private Income Pool 44,577

Scotia Private High Yield Income Pool 15,145

Scotia Private American Core-Plus Bond Pool 33,253

Scotia Private Strategic Balanced Pool 38,161

Scotia Private Canadian Value Pool 2,465

Scotia Private Canadian Mid Cap Pool 1,195

Scotia Private Canadian Growth Pool 1,766

Scotia Private Canadian Small Cap Pool 69,975

Scotia Private U.S. Value Pool 10,907

Scotia Private U.S. Mid Cap Value Pool 1,766

Scotia Private U.S. Large Cap Growth Pool 12,811

Scotia Private U.S. Mid Cap Growth Pool 12,448

Scotia Private International Equity Pool 50,875

Scotia Private International Small to Mid Cap Value Pool 3,346

Scotia Private Global Equity Pool 31,046

Scotia Private Global Real Estate Pool 46,605

Pinnacle Balanced Income Portfolio 948

Pinnacle Conservative Balanced Growth Portfolio 976

Pinnacle Balanced Growth Portfolio 764

Pinnacle Conservative Growth Portfolio 1,013

Pinnacle Growth Portfolio 1,246

13. Reconciliation of Net Asset Value and Net Assets Per UnitIn accordance with National Instrument 81-106, a reconciliation of Net Asset Value* and Net Assets per unit** as atDecember 31, 2011 and 2010 is as follows:

FundsNet Asset Valueper Unit ($)

Net AssetsPer Unit ($)

Net Asset Valueper Unit ($)


2011 2010

Scotia Private Short Term Income Pool

Pinnacle Series Units 10.00 10.00 10.00 10.00

Series F Units 10.00 10.00 – –

Scotia Private Income Pool


Series F Units 12.05 12.03 11.45 11.44

Series I Units 11.71 11.70 11.10 11.08

Scotia Private High Yield Income Pool


Series F Units 9.31 9.29 9.47 9.44

Series I Units 8.99 8.97 9.13 9.09

Series M Units 9.02 9.00 9.16 9.13

Scotia Private American Core-Plus Bond Pool


Series F Units 9.22 9.21 8.83 8.81

Series I Units 9.31 9.30 8.88 8.87

95





2011 2010

Scotia Private Strategic Balanced Pool


Series F Units 14.17 14.16 15.66 15.64

Scotia Private Canadian Value Pool


Series F Units 16.90 16.88 19.67 19.64

Series I Units 17.35 17.33 20.15 20.12

Scotia Private Canadian Mid Cap Pool


Series F Units 13.84 13.80 16.55 16.54

Series I Units 14.18 14.14 16.85 16.83

Scotia Private Canadian Growth Pool


Series F Units 11.22 11.20 12.72 12.70

Series I Units 11.24 11.23 12.70 12.68

Scotia Private Canadian Small Cap Pool


Series F Units 22.20 22.06 22.15 22.07

Series I Units 22.26 22.11 22.36 22.27

Scotia Private U.S. Value Pool


Series F Units 10.14 10.13 10.08 10.08

Series I Units 10.35 10.34 10.27 10.26

Scotia Private U.S. Mid Cap Value Pool


Series F Units 7.95 7.94 8.56 8.56

Series I Units 8.02 8.01 8.56 8.56

Series M Units 7.98 7.97 8.57 8.57

Scotia Private U.S. Large Cap Growth Pool


Series F Units 7.46 7.45 7.41 7.40

Series I Units 7.50 7.49 7.44 7.44

Scotia Private U.S. Mid Cap Growth Pool


Series F Units 15.37 15.30 16.18 16.18

Series I Units 15.80 15.73 16.39 16.38

Series M Units 15.67 15.59 16.36 16.36

Scotia Private International Equity Pool


Series F Units 8.35 8.35 9.48 9.48

Series I Units 8.49 8.49 9.59 9.59

Scotia Private International Small to Mid Cap Value Pool


Series F Units 12.46 12.45 14.02 14.02

Series I Units 12.49 12.48 14.10 14.10

Scotia Private Emerging Markets Pool


Series I Units 8.06 8.05 10.33 10.32

Series M Units 7.95 7.95 10.18 10.17

Scotia Private Global Equity Pool


Series F Units 11.85 11.84 12.80 12.80

Series I Units 12.01 12.00 12.91 12.90

Scotia Private Global Real Estate Pool


Series F Units 10.72 10.72 11.49 11.49

Series I Units 11.38 11.38 12.20 12.19

96





2011 2010


Series A Units 10.54 10.54 10.52 10.52


Series A Units 10.26 10.26 10.69 10.69


Series A Units 10.40 10.40 10.77 10.77


Series A Units 10.23 10.23 11.08 11.08


Series A Units 9.64 9.64 10.38 10.38

* Net Asset Value is the value used to determine the Funds’ daily price for purchase and redemption of units.

** Net Assets per unit is determined by valuing financial instruments held by the Fund in accordance with CICA Handbook Section 3855, “Financial Instruments – Recognition andMeasurement”. These valuation policies are described in Note 2b).

The differences between the Net Asset Value and Net Assetper Unit are mainly due to the use of bid/ask prices forfinancial statement purposes in accordance with Section 3855versus the use of last traded prices on the computation ofNet Assets Value.

14. Future Accounting ChangesEffective January 1, 2011, International Financial ReportingStandards (“IFRS”) replaced Canadian standards and inter-pretations as Canadian GAAP for publicly accountable enter-prises, which include the Funds. However, on December 12,2011, the Canadian Accounting Standards Board (“AcSB”)decided to allow Investment Companies to extend by one yearthe deferral of the mandatory adoption of IFRS until theInternational Accounting Standards Board (“IASB”) finalizethe guidance on investment entities. Entities currently apply-ing Accounting Guideline 18, “Investment Companies” cancontinue to apply existing Canadian standards in Part V ofthe CICA Handbook – Accounting until fiscal years beginningon or after January 1, 2014. In light of this decision, theManager will defer the first-time adoption of IFRS until fiscalyear beginning on or after January 1, 2014.

The Manager has commenced the development of achangeover plan to meet the implementation date. The keyelements of the plan include identifying differences betweenthe Funds’ current accounting policies and those the Fundsexpect to apply under IFRS, as well as any accounting policyand implementation decisions and their resulting impact, ifany, on the Net Assets or Net Asset Value of the Funds.

On August 25, 2011, the IASB issued an exposure draftproposing that investment entities will be exempted fromconsolidating their controlled investments under IFRS 10.The Funds are expected to meet the definitions under theproposed criteria to qualify as investment entities and wouldmeasure all controlled investments at fair value with changesin fair value recognized through profit or loss. In light of thisexposure draft, the major qualitative impacts noted as of

December 31, 2011 would be the addition of a statement ofcash flows, the impact of classification of puttable instru-ments, the impact of reporting future income tax assets orliabilities when applicable, and additional note disclosures.

The Manager has presently determined that there will be noquantitative impact on the Net Asset Value per Unit of eachFund Series resulting from the changeover to IFRS. However,this present determination is subject to change resulting fromthe issuance of new standards or new interpretations ofexisting standards.

15. Comparative FiguresCertain of the prior period’s comparative amounts have beenreclassified to conform to the current period’s presentation.

97

The accompanying financial statements have been prepared by the man-ager and approved by the Board of Directors of Scotia Asset ManagementG.P. Inc., as general partner for and on behalf of Scotia Asset ManagementL.P., the manager of the Funds. Management is responsible for theinformation and representations made in these financial statements.

Scotia Asset Management L.P. maintains appropriate processes to ensurethat relevant and reliable financial information is produced.

The financial statements have been prepared in accordance with CanadianGenerally Accepted Accounting Principles and include certain amountsthat are based on estimates and assumptions made by Scotia AssetManagement L.P. The significant accounting policies which Scotia AssetManagement L.P. believes are appropriate for the Funds are described inNote 2 to the financial statements. PricewaterhouseCoopers LLP are theexternal auditors of the Funds. They have audited the financial statementsin accordance with Canadian generally accepted auditing standards toenable them to express their opinion on the financial statements. Theirreport is set out below.

Walter PavanChief Financial OfficerScotia Asset Management L.P.March •, 2012

98Management’sResponsibilityforFinancialReporting

Independent Auditor’s Report

To the Unitholders of :

Scotia Private Short Term Income Pool (formerly PinnacleShort Term Income Fund)Scotia Private Income Pool (formerly Pinnacle Income Fund)Scotia Private High Yield Income Pool (formerly PinnacleHigh Yield Income Fund)Scotia Private American Core-Plus Bond Pool (formerlyPinnacle American Core-Plus Bond Fund)Scotia Private Strategic Balanced Pool (formerly PinnacleStrategic Balanced Fund)Scotia Private Canadian Value Pool (formerly PinnacleCanadian Value Equity Fund)Scotia Private Canadian Mid Cap Pool (formerly PinnacleCanadian Mid Cap Equity Fund)Scotia Private Canadian Growth Pool (formerly PinnacleCanadian Growth Equity Fund)Scotia Private Canadian Small Cap Pool (formerly PinnacleCanadian Small Cap Equity Fund)Scotia Private U.S. Value Pool (formerly Pinnacle AmericanValue Equity Fund)Scotia Private U.S. Mid Cap Value Pool (formerly PinnacleAmerican Mid Cap Value Equity Fund)Scotia Private U.S. Large Cap Growth Pool (formerly PinnacleAmerican Large Cap Growth Equity Fund)Scotia Private U.S. Mid Cap Growth Pool (formerly PinnacleAmerican Mid Cap Growth Equity Fund)Scotia Private International Equity Pool (formerly PinnacleInternational Equity Fund)Scotia Private International Small to Mid Cap Value Pool(formerly Pinnacle International Small to Mid Cap ValueEquity Fund)Scotia Private Emerging Markets Pool (formerly PinnacleEmerging Markets Equity Fund)Scotia Private Global Equity Pool (formerly Pinnacle GlobalEquity Fund)Scotia Private Global Real Estate Pool (formerly PinnacleGlobal Real Estate Securities Fund)Pinnacle Balanced Income PortfolioPinnacle Conservative Balanced Growth PortfolioPinnacle Balanced Growth PortfolioPinnacle Conservative Growth PortfolioPinnacle Growth Portfolio(collectively the Funds)

We have audited the accompanying financial statements ofeach of the Funds, which comprise the statement of invest-ment portfolio as at December 31, 2011, the statements of netassets as at December 31, 2011 and 2010 (as applicable) andthe statements of operations and changes in net assets forthe periods then ended as indicated in Note 1 to theFinancial Statements, and the related notes, which comprisea summary of significant accounting policies and otherexplanatory information.

Management’s responsibility for the financialstatements

Management is responsible for the preparation and fairpresentation of the financial statements of each of the Fundsin accordance with Canadian generally accepted accountingprinciples, and for such internal control as management

determines is necessary to enable the preparation of financialstatements that are free from material misstatement, whetherdue to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on the financialstatements of each of the Funds based on each of our audits.We conducted our audits in accordance with Canadian gener-ally accepted auditing standards. Those standards requirethat we comply with ethical requirements and plan andperform an audit to obtain reasonable assurance aboutwhether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due tofraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity’s preparationand fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circum-stances, but not for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation ofthe financial statements.

We believe that the audit evidence we have obtained in eachof our audits is sufficient and appropriate to provide a basisfor our audit opinion.

Opinion

In our opinion, the financial statements of each of the Fundspresent fairly, in all material respects, the financial positionof each of the Funds as at December 31, 2011 and 2010 (asapplicable) and the results of each of their operations andthe changes in each of their net assets for the periods thenended as indicated in Note 1 to the Financial Statements inaccordance with Canadian generally accepted accountingprinciples.

Chartered Accountants,Licensed Public AccountantsMarch 8, 2012

99

54D 9098E (03/12)

™ Trademark of The Bank of Nova Scotia, used under licence. Scotia Private Pools and Pinnacle Portfolios are managed by Scotia Asset Management L.P., a limited partnership wholly-owned directly and indirectly by The Bank of Novia Scotia. Scotia Capital Inc.is a corporate entity separate from, although wholly-owned by, The Bank of Nova Scotia. Member CIPF.

For more information about Scotia Private Pools and Pinnacle Portfolios:

visit:www.scotiabank.com/scotiaprivatepoolswww.scotiabank.com/pinnacleportfolios

call:1-800-268-9269 (English)1-800-387-5004 (French)

write:Scotia Asset Management L.P.

Scotia Plaza52nd Floor

40 King Street WestToronto, Ontario

M5H 1H1

scotia private pools pinnacle portfolios annual report · 2017. 3. 13. · scotia private strategic...

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