The First Trust Raymond James Canadian Focus Picks Portfolio is a mutual fund that invests in securities that make up theRaymond James Canadian Focus Picks List.

Stock selection for the Fund is a bottom-up process anchored by recommendations from Raymond James Canadian Research Analysts.-continued

The Veritas Canadian Select Portfolio is a mutual fund that invests in securities that make up the V-List produced by Veritas Investment Research Corporation. The V-List is a concentrated portfolio of 12 to 25 companies chosen by the Veritas Selection Committee as the best investment opportunities drawn from Veritas’ research.

Veritas does not utilize quantitative or momentum models to select stocks. Instead, it is focused on companies that offer long-term value and capital appreciation.-continued

Looking into 2012, we see several negative trends that can make it difficult for the Canadian market to achieve a sustained recovery. Most important, from our quantitative perspective, is the decline in the earnings cycle. Both trailing and forward earnings momentum peaked late last year, and we expect both to continue to decline into the first half of 2012.

With the possibility of further earnings disappointments and downward estimate revisions, multiple expansion will not come easily for stocks, particularly in such an uncertain global macro environment. Given this view, we believe that four investment styles will continue to outperform: growth over value, non-cyclical over cyclical, large cap over small cap, and income.-continued

Reflecting back on the fourth quarter of 2011 the Canadian equity market performed well against a backdrop of mostly negative headlines and sentiment emanating from Europe; however, the positive performance was primarily due to a particularly solid October, followed by modest declines in November and December.

Investor optimism regarding potential resolution of the European debt crisis, premature as it turns out, led to the return of the so called “risk trade” in October, leading commodities and other economically sensitive stocks higher. Consistent with the risk trade, investors fled the safety of the U.S. dollar, driving it lower during the month, which contributed to the strength in commodities.-continued

There are three types of people involved in the prognostication business these days. The “end of the world” types, the “it’s a slower, post-apocalypse world” types, and the “everything is going to be OK” types.

For a long time now, we have been saying that the “end of the world” types are over-doing it. This is actually a dangerous stance for us to take because the “end of the world” types can be very nasty to people who disagree with them.-continued