Integra Equity Fund MRFP by MikeJenny


									Integra Equity Fund
Annual Management Report of Fund Performance
As at December 31, 2010
This annual report of fund performance contains financial highlights but does not contain the complete annual financial statements for the
investment fund. You may request a copy of the annual financial statements at no cost, by calling 1-800-363-2480, by writing to us at
Integra Capital Limited (“Integra”), 2020 Winston Park Drive, Suite 200, Oakville ON L6H 6X7 or by visiting our website at or the SEDAR website at

Security holders may also contact us using one of these methods to request a copy of the investment fund’s proxy voting policies and
procedures, proxy voting disclosure record, or portfolio disclosure relation to the investment fund.

Investment Objective and Strategies
The Integra Equity Fund seeks to provide long-term capital growth by investing in equity securities of Canadian businesses as well as
companies in the United States and outside of North America. The Fund may hold up to an aggregate of 10% in cash or cash equivalents.

The Fund invests in the securities of the Integra Canadian Value Growth Fund, the NWQ U.S. Large Cap Value Fund, the Integra
International Equity Fund and the Integra Newton Global Equity Fund. The target weighting of the Fund’s investment in the Integra
Canadian Value Growth Fund is 70%, in the NWQ U.S. Large Cap Value Fund 10%, in the Integra International Equity Fund 10% and in
the Integra Newton Global Equity Fund 10% of net assets (exclusive of cash and cash equivalents), subject to a permitted deviation of 2.5%
above or below the target weighting to account for market fluctuations.

The Fund employs a strategic investment strategy whereby investments in the Underlying Funds are based on target asset weightings. The
target weightings allocated to each Underlying Fund and the selection of Underlying Funds are based on several factors, including impact
to the Fund’s volatility, asset class diversification and investment styles.

Most of the Fund’s assets will be invested in common shares. As a result, the Fund is exposed to stock market risk and specific issuer risk.
Equity risk can be described as the potential for a decline in stock prices. The share price of a company will be impacted by various factors
including profit growth, dividend policy, balance sheet leverage, quality of management, market share, product development, and
technology investment.

The Fund also invests in stocks outside of Canada, with a long-term target of 30% of the holdings being shares of companies based in the
United States or outside of North America. As the Fund is investing in foreign securities it will also be subject to foreign security risk and
currency risk.

The Fund may also invest in American Depository Receipts and would therefore be exposed to ADR risk.

The underlying funds held by the Integra Equity Fund may enter into securities lending transactions. Securities lending transactions will be
used in conjunction with the funds other investment strategies in an appropriate manner to achieve the Fund’s investment objectives.
Accordingly, it may be subject to securities lending risks.

Aggressive monetary and fiscal policies are providing some relief for the U.S. economy. However, the temporary stimulus may not
generate a sustained pick-up in the growth of private sector demand. The balance sheet problems facing households in particular will
continue to hold back the economy for several more years. Nearly, one in four mortgage borrowers have debts exceeding the value of what
their house is worth. While layoffs appear to have abated, U.S. corporations remain reluctant to hire due to excess capacity. Thus, the
published unemployment rate will remain close to 10%, while the unofficial rate (including people no longer actively seeking work) is
likely to be well into the teens.

Europe and Japan are dogged by large government deficits, stagnant economies and aging populations. There is the possibility that the debt
crisis in at least one of the peripheral countries in the Euro-zone will intensify. That will serve to fan fears of a euro-zone break-up and push
the Euro lower. The Japanese government began scaling back subsidies for the purchases of durable goods late in 2010. At the same time,
there are indications that consumers and businesses are losing confidence and consequently may reduce spending.

® is a registered Canadian trademark of Integra Capital Management Corporation
Annual Management Report of Fund Performance—continued
Looking ahead, there are a number of significant risks facing global stocks. There is a risk that central banks around the world may tighten
monetary policy quicker than the stock markets anticipate. The “risk trade” favouring lower-quality stocks and commodity producers could
come under pressure if this prospect becomes reality. Conversely, major developed economies could falter despite the aggressive stimulus
packages introduced by governments over the past two years.

Longer term, deficits are much more worrisome, with the aging demographics and the demand for new government spending programs.
Interest rates will rise to more normal levels over time, increasing the service costs on the debt financing the budget shortfalls.

Here at home, stronger U.S. growth over the near-term will provide a temporary lift to Canada’s exports. However, as this catalyst fades
later in 2011, the strong Canadian dollar may negatively impact exports to the rest of the world.

Robust housing investment and consumption growth in Canada have been accompanied by a sharp increase in household debt, which has
stretched consumer balance sheets. Future consumption spending is likely to be more in line with income growth. Geopolitical events, as
always, pose risk factors that could cause market setbacks and volatility surges. Those most prominent on the radar screen for 2011 are the
conflicts on the Korean peninsula, renewed fighting in the Middle East or action to thwart Iran’s nuclear ambitions.

Management Discussion of Fund Performance
Results of Operations
For the quarter, six-month and one-year period ended December 31st, 2010, the Fund generated gains of 9.6%, 19.6% and 13.3%,
respectively. In comparison, the Fund’s benchmark (70% S&P/TSX Composite Index, 15% Russell 1000 Index and 15% MSCI EAFE-free
(ND) Index) provided returns of 8.3%, 19.3% and 14.1%, for the same periods. All of the returns are presented in Canadian dollar terms and
gross of investment management fees.

The year 2010 was another year of extreme swings in investor sentiment. Financial rescue packages, European bank stress tests, low interest
rate policies and improving corporate profits provided investors with some confidence at points in time. Countering the positives were the
continuing housing and unemployment data in developed countries, concerns over government debt levels particularly in select European
countries and uncertainty about inflation.

The macro event that caused the equity markets to rebound sharply in the later stages of 2010 was the announcement by the U.S. Federal
Reserve in August of the latest round of quantitative easing. The announcement reinforced a strong message that efforts would continue to
keep interest rates at low levels. The result was global stock markets finished off the year in strong fashion after a tepid first half.

The strongest performers amongst the global markets, in Canadian dollar terms were Canada, the Emerging Markets, Hong Kong and
Singapore. These countries are characterized by sound fiscal policies, favourable demographics and sustainable economic growth prospects.

In Canada, over the full year, the stock market was driven higher by the economically sensitive sectors, Materials and Consumer
Discretionary stocks, along with Telecom Services. All of the other sectors enjoyed double-digit returns except for Information Technology
which had a negative return during 2010.

Similarly, in the U.S. the stocks that performed best were those most leveraged to a global economic recovery, beneficiaries of rising
inflation and improved consumer spending. The top performers were the Consumer Discretionary, Industrials, Materials and Energy sectors.

The Fund outperformed its benchmark over the second half of 2010. However, for the full year, the Fund did not achieve its benchmark’s
return. The underperformance largely occurred due to the domestic holdings in the Fund. In Canada, the Fund was underweight Potash
Corp. which was subject to a takeover bid that was eventually nixed. Additionally, the Fund was overweight the Information Technology
sector which did not keep pace with the overall market. The Fund was also overweight overseas stocks which trailed North American

With respect to positives, the relative returns were favourably impacted by stock selection in the domestic Consumer Discretionary and
Financial Services sectors. The Fund’s positions in American stocks such as Citigroup and Metlife performed exceedingly well.
Additionally, exposure to the Emerging Markets, such as Thailand, added value while underweights in Italy and Spain enhanced

Fund expenses vary period over period mainly as the result of changes in average Net Asset Values and investment activity. Operating
expenses were reduced significantly during 2010.

Annual Management Report of Fund Performance—continued
The Fund had net redemptions of $32.1 million during 2010.

Recent Developments
The efforts of central banks and governments in developed economies to deal with the aftermath of the global credit crisis have brought
some near-term successes. Economic activity has generally recovered from post-crisis levels and asset markets have mostly been buoyant.

U.S. monetary and fiscal authorities remained focused on bringing employment back to pre-crisis levels and will likely continue to pursue
inflationary policy settings. Yet, while the jobless rate appears to have peaked, businesses, largely with excess capacity, remain reluctant to
hire until there are indications that the global economy is back on track.

The mature economies in Europe, are faced with rolling back unsustainable entitlements in the face of civil unrest. Yet, these countries
must face up to the spiraling public-sector debt by addressing government spending.

It should be noted that many individual companies in Europe have better prospects than the region as a whole, due to their exports outside
the Euro-zone. As well, a number of large quality companies in this region are selling at attractive prices.

Japan and the United Kingdom are likely to experience sluggish growth in 2011.

China and smaller Asian nations should continue to experience robust growth in 2011. Chinese policy makers will continue to monitor
economic expansion and there may be some more policy tightening to keep inflation in check.

The outlook for Canadian stocks in 2011 is positive. Corporate profits have made one of their sharpest recoveries on record following the
collapse in 2008. Corporate bottom lines are within 10% of their all-time highs again and are still growing at double-digit rates, suggesting
that profits will be at their best levels ever within a year. If profits recover to their old highs, then it’s logical to expect that stock prices
could also return to their prior peaks. Since profits have grown faster than stock prices since the recession ended, stocks are effectively still
cheaper than they were prior to the downturn.

With interest rates remaining near record low levels, the difference between the earnings yield on stocks and the yield on the 10-year
government bond is more than 4%. This is a healthy level of excess return to be paid for taking the inherently higher risk and volatility of
investing in stocks.

The Fund has established new positions in Ensign Energy Services, Great West Life, Superior Plus, Cameco, Precision Drilling, TMX
Group, General Motors, Time Warner and China Mobile.

Caution Regarding Forward-looking Statements
This report may contain forward-looking statements about the Fund, including its strategies and expected performance. Forward-looking
statements include statements that are predictive in nature, that depend upon or refer to potential future events or market and economic

In addition, any statement that may be made concerning future performance, strategies or prospects and possible future Fund action, is also
a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are
inherently subject to risks, uncertainties and assumptions about the Fund and capital market and economic factors.

Forward-looking statements are not guarantees of future performance, and actual events and results may differ materially from those
expressed or implied in any forward-looking statements made by the Fund. A wide range of factors may contribute to these variances,
including general economic, geopolitical and market influences in Canada or globally, interest rates and currencies, capital markets,
technology innovations, regulations and catastrophic events.

Investors are encouraged to consider these and other factors including their own investment objectives carefully before making any
investment decisions and are urged to avoid placing undue reliance on forward-looking statements.

Additionally, investors should be aware that the Fund has no specific intention to update any forward-looking statements whether as a result
of new information and future events, prior to the release of the next Management Report on Fund Performance.

Annual Management Report of Fund Performance—continued

Related Party Transactions
Manager, Portfolio Manager and Transfer Agent
The Fund is managed by Integra. Integra provides or arranges for the provision of all general management and administrative services
rendered by the Fund in its day-to-day operations, including providing or arranging the provision of investment advice and record-
keeping services for the Fund.

As a result of providing investment advisory and management services, Integra is entitled to receive a monthly fee from investors in the

Integra Equity Fund
Financial Highlights
The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's
financial performance for the past 5 years. This information is on a per unit basis and is derived from the Fund's audited annual financial
     Integra Equity Fund
                                                               2010              2009            2008            2007             2006
     Net Asset Value per unit, Beginning of Year              $12.91            $10.44          $16.27          $18.23           $16.67
     Adjustment for Accounting Standards                         ─                 ─                 (0.03)        ─                ─
     Net Assets per unit, Beginning of Year                   $12.91            $10.44          $16.24          $18.23           $16.67
     Increase (Decrease) From Operations:
     Total revenue                                              0.28             0.31             0.46            0.42            0.53
     Total expenses                                            (0.05)           (0.03)           (0.04)          (0.04)          (0.04)
     Realized gains (losses) for the year                      (0.22)           (0.86)            0.28            1.54            1.44
     Unrealized gains (losses) for the year                     1.12             3.30            (5.80)          (2.34)           1.17
     Total Increase (Decrease) From Operations (1)             $1.13            $2.72           ($5.10)         ($0.42)          $3.10

     From income (excluding dividends)                         (0.06)           (0.06)          (0.28)          (0.22)           (0.20)
     From dividends                                      (0.31)                  (0.37)          (0.19)          (0.17)          (0.28)
     From capital gains                                     ─                       ─            (0.28)          (0.04)          (1.02)
     Return of capital                                      ─                       ─               ─            (0.08)             ─
     Total Annual Distributions (2)                     ($0.37)                 ($0.43)         ($0.75)         ($0.51)         ($1.50)
     Net Asset Value, End of Year                       $14.37                  $12.91          $10.44          $16.24          $18.23
     Ratios and Supplemental Data (Based on Trading NAV)
     Net asset values(000's)                                  $35,917          $64,365         $93,438        $147,623         $159,910
     Number of units outstanding                             2,498,812        4,985,737       8,948,193       9,071,274        8,769,785
     Management expense ratio (%)                              2.58%            2.36%           2.19%           2.08%            2.13%
     Management expense ratio before waivers or ab-            2.58%            2.36%           2.19%           2.08%            2.13%
     sorptions (%)
     Portfolio turnover rate (%)(3)                           10.28%            8.97%          183.78%          24.93%          24.70%
     Trading expense ratio (%)(4)                              0.00%            0.00%           0.11%            0.06%           0.06%

Supplementary information to the Financial Highlights calculations are based on the following:
1.    Net asset value and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease
      from operations is based on the weighted average number of units outstanding over the year.
2.    Distributions were paid in cash/reinvested in additional units of the Fund, or both.
3.    The Fund's portfolio turnover rate indicates how actively the Fund's portfolio advisor manages its portfolio investments. A
      portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course
      of the period. The higher a Fund's portfolio turnover rate in a period, the greater the trading costs payable by the Fund in the
      period, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship
      between a high turnover rate and the performance of a Fund.
4.    The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized
      percentage of daily average net assets during the year.

Management Fees
The Fund pays no management fees to Integra. For management services provided to them by Integra, clients of Integra will pay an
investment management fee directly to Integra, as set out in their agreement with Integra. The amount of the investment management
fee is negotiable between the client and Integra.

The maximum annual management fee before HST/GST (expressed as a % of assets under management by Integra) payable by the
client to Integra for the Integra Equity Fund is 1.75%. Accordingly, the Management Expense Ratio includes this maximum annual
management fee and the HST/GST.

Integra Equity Fund
Past Performance
Fund Inception - November 27, 1996

Year-by-Year Returns
The following bar chart shows the investment fund’s annual performance for each of the years shown, and illustrates how the
investment fund’s performance was changed from year to year. In percentage terms, the bar chart shows how much an investment made
on the first day of each financial year would have grown or decreased by the last day of each financial year.

          2001         2002          2003          2004           2005       2006        2007           2008      2009            2010
         3.20%         -6.77%      23.55%       17.20%           13.97%     19.06%       -2.35%       -31.98%    27.10%      13.27%






Annualized Returns
This table shows the fund’s historical annualized returns for the period ending December 31, 2010.

Annualized Returns                                 Past 1 year            Past 3 years            Past 5 years      Past 10 years

Integra Equity Fund                                 13.27%                  -0.70%                   2.63%                6.10%

Benchmark                                           14.13%                  1.53%                    4.81%                4.43%

The Integra Equity Fund Benchmark reflects the market sectors in which the Fund invests.

                 Prior Benchmark
                 70%          S&P/TSX Composite Index
                 15%          Russell 1000 Index
                 15%          Morgan Stanley Capital International EAFE-free (GD) Index*

              *EAFE (Free) - European, Australasian, and Far East Index “free” (stocks available to foreign investors)

                 Current Benchmark
                 70%          S&P/TSX Composite Index
                 15%          Russell 1000 Index
                 15%          Morgan Stanley Capital International EAFE-free (ND) Index*

               *EAFE (Free) - European, Australasian, and Far East Index “free” (stocks available to foreign investors)

The current benchmark has been adopted as it replicates the benchmark used for our institutional and advisory investors, who
collectively hold more than 98% of the outstanding units of the fund.

 Integra Equity Fund
 Summary of Investment Portfolio as at December 31, 2010
 Asset Mix                                                             EAFE Country Mix
                                              % of Fund’s              (Integra International Equity Fund)              % of Fund’s
                                            Net Asset Values                                                             Net Asset
 Canadian Equities                               69.94%
 U.S. Equities                                   10.22%                Australia                                           7.95%
 International Equities                          9.96%                 Belgium                                             1.06%
 Global Equities                                 9.94%                 Bermuda                                             1.01%
 Other Assets, Net of Liabilities                (0.06%)               Brazil                                              5.24%
                                                                       Cayman Islands                                      0.49%
Canadian Sector Mix
                                                                       France                                              4.50%
(Canadian Value Growth Fund)                  % of Fund’s
                                            Net Asset Values           Germany                                             5.87%
Consumer Discretionary                           4.82%                 Hong Kong                                           5.09%
Consumer Staples                                 2.06%                 Japan                                              23.93%
Energy                                          23.60%                 Luxembourg                                          0.65%
Financials                                      26.14%                 Macau                                               1.21%
Health Care                                      0.56%                 Norway                                              0.76%
Industrials                                      5.72%                 Philippines                                         0.60%
Information Technology                           6.13%                 Poland                                              0.66%
Materials                                       22.69%                 Singapore                                           2.06%
Telecommunication Services                       5.83%                 South Africa                                        2.94%
Utilites                                         0.55%                 Spain                                               1.67%
                                                                       Switzerland                                        11.67%
                                                                       Thailand                                            3.11%
                                                                       Turkey                                              0.72%
US Sector Mix
                                                                       United Kingdom                                     17.77%
(NWQ Large Cap Value Equity Fund)             % of Fund’s
                                            Net Asset Values
Consumer Discretionary                           7.70%
Consumer Staples                                 5.49%
Energy                                          11.83%
Financials                                      26.32%
Health Care                                      9.49%
Industrials                                      6.69%
Information Technology                          11.19%
Materials                                           ─
Telecommunication Services                          ─
Utilities                                        1.08%
Non-U.S. Equities                               18.27%

The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund. The most recent annual
report, semi-annual report or quarterly report is available at no cost, by calling 1-800-363-2480, by writing to us at Integra Capital
Limited, 2020 Winston Park Drive, Suite 200, Oakville, ON, L6H 6X7 or by visiting our website at
Global Country Mix                                                 Top 4 Issuers
(Newton Global Equity Fund)                  % of Fund’s           (excluding cash equivalents)                           % of Fund’s
                                              Net Asset                                                                   Net Asset
                                               Values                                                                     Values
Australia                                       5.59%              1    Integra Canadian Value Growth                     69.94%
Belgium                                         0.78%              2    NWQ US Large Cap                                  10.22%
Bermuda                                         0.89%              3    Integra International Equity                      9.96%
Brazil                                          4.59%              4    Integra Newton Global Equity                      9.94%
Canada                                          3.88%              Total Fund Net Asset Values $ 35,917,222
France                                          4.57%
Germany                                         4.83%
Hong Kong                                       1.70%
Ireland                                         2.02%
Japan                                           6.89%
Luxembourg                                      0.89%
Macau                                           1.09%
Norway                                          1.15%
Panama                                          0.96%
Singapore                                       1.61%
South Africa                                    1.18%
South Korea                                     0.66%
Spain                                           0.73%
Switzerland                                    10.98%
Taiwan                                          1.15%
Thailand                                        1.83%
Turkey                                          0.54%
United Kingdom                                 10.40%
United States                                  29.98%

The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund. The most recent annual
report, semi-annual report or quarterly report is available at no cost, by calling 1-800-363-2480, by writing to us at Integra Capital
Limited, 2020 Winston Park Drive, Suite 200, Oakville, ON, L6H 6X7 or by visiting our website at
Integra Capital Limited
2020 Winston Park Drive, Suite 200
Oakville, Ontario
L6H 6X7

Manager, Portfolio Manager, Transfer Agent and Registrar
Integra Capital Limited, Oakville, Ontario

Ernst & Young LLP, Toronto, Ontario

Legal Counsel
Torys LLP, Toronto, Ontario


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