BluMont Capital Corporation (“BluMont”) is an Ontario-based manufacturer and distributor of alternative investment products. BluMont is the manager of a number of internally advised alternative investment funds in addition to being the manager of funds that are sub-advised by external investment management firms. Moreover, BluMont is the advisor to two mutual funds.

Portfolios for which BluMont acts as an advisor are governed by the principle of fair allocation of investment opportunities, the substance of which is documented herein. The investment trade allocation policy (“Allocation Policy”) is reviewed and updated on a periodic basis.

This Allocation Policy applies to all portfolios advised internally by BluMont. Please see Appendix A for a current product list.

Trades will be allocated on a basis believed to be fair and equitable; no participating fund will receive preferential treatment over any other. The portfolio management team will take steps to ensure that no participating fund will be systematically disadvantaged by the aggregation, placement, or allocation of trades.

Transactions are allocated promptly, usually on the trade date, and no reallocations are permitted from one account to another except where the original allocation was done in error.

No allocations will be made to a personal account of the portfolio management team or any Access Person (as defined in BluMont’s Code of Ethics).

Principle of Fair Allocation of Investment Opportunities

In order to ensure fairness in the allocation of investment opportunities among the funds it manages, BluMont will allocate investment opportunities with consideration to the prime determinants of market exposure, cash availability and industry sector exposure and with regard to the suitability of such investments to each fund. In determining the suitability of each investment opportunity to a fund, consideration will be given to a number of factors, the most important being the fund’s investment objectives and strategies, existing portfolio composition and cash levels. Where an investment opportunity is suitable for two or more funds, BluMont will allocate such investment opportunity equitably in order to ensure that funds have equal access to the same quality and quantity of investment opportunities.

Factors to Consider:

• As the investment objectives and strategies of the BluMont Hirsch Long/Short Fund and the Hirsch portion of the BluMont Canadian Opportunities Fund are the same, efficiencies could be realized by the BluMont Canadian Opportunities investing directly into units of the BluMont Hirsch Long/Short Fund.
• As the investment objectives and strategies of the BluMont Core Hedge Fund and the Burlington portion of the BluMont Canadian Opportunities Fund are the same, efficiencies could be realized by the BluMont Canadian Opportunities investing directly into units of the BluMont Core Hedge Fund.
• The BluMont Hirsch Performance Fund employs certain hedge fund strategies such as leverage (up to 50% of its net asset value at the time of investment) and short positions (up to 15% of its net asset value).
• The BluMont Canadian Fund and the BluMont North American Fund, are subject to trading restrictions outlines in National Instrument 81-102.
• Given different inception dates and historical cash flows, each fund may hold the same position with a different cost base.

Prime Determinants

• Overall market exposure;
• Industry sector exposure; and
• Cash availability

The portfolio management team will strive to maintain the same overall exposure and the same long and short positions in each portfolio.

For the mutual funds only, the portfolio management team takes index weightings into consideration as the returns for these two funds are measured relative to the S&P/TSX Index, rather than in absolute terms, as is the case for the alternative investment strategies.

IPO and/or Block Trades

Generally, a company issuing in an initial public offering (“IPO”) will have a limited operating history and thus IPO investments might frequently be considered speculative. The principle of fair allocation of investment opportunities is applied to IPO’s, with special attention being given to the suitability of investments vis á vis the fund’s investment objectives and strategies. For example, an IPO that is considered to be speculative would not generally be allocated to the mutual funds.

A block trade involves the crossing of a large amount of shares of a security, where the brokerage firm acts to match the buyers and sellers. A block trade is generally transacted at a small premium or discount to the prevailing market price of the security; commission is charged at a negotiated institutional rate. BluMont is not a significant participant in block trades; however, in the event BluMont does participate, the portfolio manager will seek to negotiate the best possible price through the broker. The allocation process for a block trade is no different than that of a regular trade; allocations are made on a pro-rata basis, with consideration to the prime determinants described above.

Monitoring

The allocation for each trade must be documented by way of a trade ticket by the end of the business day on which the order is filled unless the broker has not confirmed the fill to the portfolio management team by the end of the day in which case the trade ticket will be completed the following day. Taking into consideration the Prime Determinants described above and/or specific fund objectives and restrictions, certain trades will not be allocated on a pro-rata basis across all funds. In such situations, explanations will be documented on the trade ticket.

A copy of each trade ticket is maintained in an investments compliance binder for review by the compliance manager on a weekly basis. Reviews are conducted on a random sample basis involving 75 – 90% of all trades executed. Explanations for non pro-rata allocations are reviewed for reasonableness. If an unacceptable explanation or any deviation from the Allocation Policy is noted, the President and CEO and at least one managing director, as well as the portfolio management team, are notified in writing by the compliance manager. Any corrective action to be taken or follow-up explanations will be noted in the investment compliance binder.

Appendix A

List of Funds Advised Internally by BluMont

Hedge / Pooled funds:

Long/Short Strategies:

• BluMont Hirsch Long/Short Fund
• BluMont Canadian Opportunities Fund
  (currently one of three advisors)

• This portfolio invests directly in units of the BluMont Hirsch Long/Short Fund

Primarily Long Only Strategies:

• BluMont Hirsch Performance Fund (short positions allowed up to 15% of net asset value)

Mutual Funds:

• BluMont Canadian Fund
• BluMont North American Fund
  Detailed investment objectives and strategies can be found in each fund’s offering documents.