Canadian World Fund Limited
TSX : CWF

Canadian World Fund Limited

February 16, 2012 14:20 ET

Canadian World Fund Limited Reports Audited 2011 Financial Results

TORONTO, CANADA--(Marketwire - Feb. 16, 2012) - Canadian World Fund Limited (TSX:CWF) had a net asset value per share (NAV) return for 2011 of -18.2%. By comparison, the return of the benchmark Morgan Stanley Capital International All Country World Index (MSCI ACWI) was -7.4%, expressed in Canadian dollar terms. For 2011, CWF's market return was -14.0%. Net asset value at December 31, 2011 was $35,540,000, a decrease from $43,462,000 at the end of 2010. The corresponding NAVs at December 31, 2011 and December 31, 2010 were $4.94 and $6.04, respectively.

Entering 2011, many market observers expected a continuation of the long deleveraging process that began in 2008 and a steady improvement in the performance of the global economy. However, these expectations were cast aside as debt and credit issues intensified and recessionary conditions threatened, eclipsing the fact that globally it was actually a year of above-average corporate revenue and earnings growth. Financial performance and equity market performance became disconnected.

Consequently, CWF was affected negatively in the growing gloom that pervaded increasingly challenged markets. Most of the Company's decline occurred in worsening stock performance through the second half of the year, with holdings being particularly hard hit during the volatility of September, November and December, when almost all of the negative return for the year was generated. Although generally near fully invested, a higher than usual cash balance, averaging in excess of 15%, was maintained in the portfolio during the fourth quarter limiting slightly the effects of negative market volatility.

Exposure in emerging markets, such as China, India and Brazil, was especially impacted by weakening global economic growth, tightening fiscal policies and declining currency values versus the U.S. dollar, as evidenced by the -18.6% return of the Morgan Stanley Emerging Markets Index, expressed in Canadian dollar terms.

CWF is a TSX-listed global equities fund that provides one of few opportunities for bottom-up investment in securities of publicly traded, primarily growth companies in a global portfolio.

FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share amounts)
For the Year Ended
December 31, December 31,
2011 2010
Net investment loss (519) (520)
Net gain (loss) on investments (7,425) 10,380
Increase (decrease) in net assets resulting from operations (7,944) 9,860
Increase (decrease) in net assets resulting from operations - per share (1.10) 1.37
As at
December 31, December 31,
2011 2010
Selected data(1)
Net asset value 35,540 43,462
Net asset value per share 4.94 6.04
Selected data according to GAAP(1)
Net assets 35,349 43,293
Net assets per share 4.92 6.02
(1) The Company calculates the net asset value and net asset value per share on the basis of the valuation principles set out in its annual information form. These valuation principles differ from the requirements of Canadian generally accepted accounting principles (GAAP), with the main difference relating to securities that are listed on a public stock exchange. While the Company generally values such securities based on the latest sale price, GAAP requires the use of the closing bid price. Accordingly, bid prices are used in determining net assets and net assets per share for purposes of the interim and annual financial statements.

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