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Third Quarter Letter 2017

October-25-17

Canadian Equity

During the third quarter of 2017, the Lester Canadian Equity Fund rose +0.8% versus +3.8% for the TSX Composite Total Return. Year-to-date, we are up +6.1% versus +4.5% for the TSX. Individual managed account returns vary from these results depending on cash and stock weightings. Our underperformance during the quarter was due to low weightings in the energy and financial sectors which were up +10.5% and +3.7% respectively, and high weightings in Consumer Staples and Utilities which were down -2.5% and -3% respectively. High cash & equivalent balances, which averaged around 15% bolstered by the takeovers of Sandvine and Veresen, also dragged performance yet buffered volatility during the quarter. Since inception in July 2006, our Canadian Equity strategy has produced a cumulative net return of +200.7%, over double the +86.4% for the TSX. This represents an annual compound return of +10.3% over the past eleven years, net of all fees and expenses, versus +5.7% for the TSX. Measured in terms of “value added” or “active return”, we have generated +4.6% per year above the market’s return, net of fees, for over 11 years.