ARTISAN PORTFOLIOS · The Artisan Portfolios Board of Governors was voluntarily established by United Financial Corporation in 2004. The Board of Governors acts as an independent

ARTISAN PORTFOLIOSANNUAL FINANCIAL STATEMENTS – DECEMBER 31, 2008

1Annual Financial Statements as at December 31, 2008

We are living through an historic time in the financial markets – a period of highly improbable extremes.

Change that in the past would have happened over months or years is happening in hours anddays. It’s painful and unsettling, but has a cleansing effect as it revalues assets in record time,while also presenting rare investment opportunities. We take comfort in the fact that we arebeyond the historical average duration of a bear market, which since 1946 have averaged 15 months. Our leading portfolio managers are taking advantage of the unprecedented changeand uncertainty to restructure their portfolios and acquire positions in companies that lookincredibly attractive.

We wanted to provide you with financial statements to update you on your holdings as atDecember 31, 2008.

Our skilled team of investment analysts and portfolio engineers continues to evolve andupgrade our offering. In September, we were very pleased to build on the strength of ArtisanPortfolios by adding more diversification, enhanced performance potential and lowermanagement fees.

The changes include:

• adding three new United equity alpha mandates – Canadian, U.S. and international• a new allocation to global real estate investments, in all portfolios except the Maximum

Growth and New Economy, and • a new mix of underlying managers to strengthen the investment management offering.

We encourage you to take full advantage of Canada’s powerful new tax-free savings accounts(TFSAs). Although the annual contribution limit of $5,000 may not seem like a large sum,the potential for your entire family is truly amazing. Assets held inside these accounts benefitfrom tax-free compounding growth, and withdrawals are not taxed.

If you have any questions about the information in this report, or your account, please contact your Assante advisor or the United Financial Service Centre at 1-888-664-4784 or by e-mail [email protected].

Thank you for your continued confidence in our team. On behalf of everyone at United Financial,I wish you all the best in the new year.

Sincerely,

Joseph C. CanavanChairman and Chief Executive OfficerUnited Financial Corporation

TABLE OF CONTENTS

MESSAGE TO OUR INVESTORS . . . . . 1

ABOUT THE

BOARD OF GOVERNORS . . . . . . . . 2

LETTER FROM THE

BOARD OF GOVERNORS . . . . . . . . 2

MANAGEMENT’S RESPONSIBILITY

AND AUDITORS’ REPORT . . . . . . . . 3

Artisan Canadian T-Bill Portfolio . . . . . . 4

Artisan Most Conservative Portfolio . . . . 8

Artisan Conservative Portfolio . . . . . . . . 12

Artisan Moderate Portfolio . . . . . . . . . . 16

Artisan Growth Portfolio . . . . . . . . . . . . 20

Artisan High Growth Portfolio . . . . . . . . 24

Artisan Maximum Growth Portfolio . . . . 28

Artisan New Economy Portfolio . . . . . . . 32

NOTES TO THE

FINANCIAL STATEMENTS . . . . . . . . 36

LEGAL NOTICE . . . . . . . . . . . . . . . . . . 40

MESSAGE TO OUR INVESTORS

2

The Artisan Portfolios Board of Governors was voluntarily established by UnitedFinancial Corporation in 2004.

The Board of Governors acts as an independent governance body of all ArtisanPortfolios, providing impartial judgment on conflicts of interest with a view to thebest interests of the Artisan Portfolios and Artisan Portfolios investors. The Boardof Governors recommends the best course of action to achieve a fair and reasonableresult on any conflict of interest issues, and United Financial takes into account itsrecommendation in accordance with its fiduciary duty to the Artisan Portfolios. Allof the members of the Board are independent of United Financial.

The Board of Governors mandate is set out in a separate charter and reviewedannually by the Board to ensure its mandate conforms to the expectations and requirements of Canadian securities regulators. Along with dealing with conflicts of interest, the mandate provides that the Board acts as an auditcommittee for the Artisan Portfolios for the purpose of reviewing the financialstatements of the Artisan Portfolios with the auditors of the Artisan Portfolios.

The Board also reviews and discusses on a regular basis matters includingcompliance of the Artisan Portfolios with United Financial’s relevant policies andprocedures, approval of the Artisan Portfolios’ auditors and the fees paid to thoseauditors, and the performance of the Board and its members.

The Board of Governors adheres to the guidelines set out by Canadian securitiesregulators in National Instrument 81-107 Independent Review Committee forMutual Funds which requires all mutual funds in Canada to have independentreview committees.

Members of the Board of Governors are compensated as recommended by theCanadian securities regulators and as set out in its mandate. These expenses are paidout of the assets of the Artisan Portfolios.

The members of the Board of Governors are:

William Harding, Managing Partner, Alpine Asset Advisors AGGovernor since June 2005

Stuart P. Hensman, Corporate DirectorGovernor since December 2004

Christopher M. Hopper, General Manager, KLQ Mechanical Ltd.Governor since May 2007

Sharon M. Ranson, President, The Ranson GroupGovernor since December 2004

ABOUT THE ARTISAN PORTFOLIOS BOARD OF GOVERNORS

Your Artisan Portfolios Board of Governors is pleased to report on its activitiesin respect of the year ended December 31, 2008 and to date. The Governors areappointed pursuant to the Declaration of Trust governing the Artisan Portfolios.

The Governors have reviewed, commented on and approved the United FinancialCode of Ethics and Conduct, which establishes rules of conduct designed to ensurefair treatment of the Artisan Portfolios’ securityholders and that, at all times, theinterests of the Artisan Portfolios and their securityholders are placed abovepersonal interests of employees, officers and directors of the Manager and each ofits subsidiaries and affiliates, the subadvisors, and the Governors, through theapplication of the highest standards of integrity and ethical business conduct. TheCode of Ethics and Conduct requires the prior clearance of personal trades andrestricts the ability of staff to trade any securities held by the Artisan Portfolios. The objective is not only to remove any potential for real conflict of interest but to avoidany perception of conflict. The Manager's year 2008 report on compliance with theCode of Ethics and Conduct and other relevant policies has been provided to theGovernors in a timely and satisfactory manner.

The Governors report that management has been open and cooperative, permitting the Governors to meet with subadvisors, to meet with individualdepartment heads and personnel to review control mechanisms and complianceprocedures, including those relating to the personal securities trading activity ofemployees, and to consider other matters that affect the Artisan Portfolios. During2008, the Governors also acted as the audit committee of the Artisan Portfolios. The audit committee reviewed, with the Artisan Portfolios’ auditors, the planning,scope and results of the audit of the financial statements of the Artisan Portfoliosfor the year 2008. In March 2009, the Board of Governors received and accepted the 2008 Annual Financial Statements of the Artisan Portfolios.

Stuart P. HensmanChair, Artisan Portfolios Board of Governors

March 4, 2009

LETTER FROM THE ARTISAN PORTFOLIOS BOARD OF GOVERNORS

Annual Financial Statements as at December 31, 2008

MANAGEMENT’S RESPONSIBILITY

FOR FINANCIAL REPORTING

The accompanying financial statements have been prepared by management of

the Portfolios and approved by the Board of Directors of United Financial

Corporation. Management is responsible for the information and representations

contained in these financial statements and other sections of this report.

The Artisan Portfolios maintain appropriate processes to ensure that relevant and

reliable financial information is produced. The financial statements have been

prepared in accordance with Canadian generally accepted accounting principles

and include certain amounts that are based on estimates and judgements. The

significant accounting policies which management believes are appropriate for the

Portfolios are described in Note 2 to the financial statements. Financial information

provided elsewhere in this report is consistent with that in the financial statements.

The Board of Directors of United Financial Corporation is responsible for

reviewing and approving the financial statements and overseeing the

performance of its financial reporting responsibilities. They also review the

adequacy of internal controls, the audit process and financial reporting with

external auditors.

PricewaterhouseCoopers LLP are the external auditors of the Artisan Portfolios.

They have audited the financial statements in accordance with Canadian

generally accepted auditing standards to enable them to express to the

unitholders their opinion on the financial statements. Their audit report follows.

President and Chief Operating Officer Chairman and Chief Executive Officer

AUDITORS’ REPORT

To the unitholders of:

Artisan Most Conservative Portfolio

Artisan Conservative Portfolio

Artisan Moderate Portfolio

Artisan Growth Portfolio

Artisan High Growth Portfolio

Artisan Maximum Growth Portfolio

Artisan Canadian T-Bill Portfolio

Artisan New Economy Portfolio

(collectively the “Portfolios”)

We have audited the Statement of Investment Portfolio of each of the Portfolios

as at December 31, 2008, the Statements of Net Assets of each of the Portfolios

as at December 31, 2008 and 2007 and the Statements of Operations and

Changes in Net Assets for the years ended December 31, 2008 and 2007.

These financial statements are the responsibility of the Portfolios' management.

Our responsibility is to express an opinion on these financial statements based on

our audits.

We conducted our audits in accordance with Canadian generally accepted auditing

standards. Those standards require that we plan and perform an audit to obtain

reasonable assurance whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects,

the financial position of each of the Portfolios as at December 31, 2008 and 2007

and the results of each of their operations and changes in each of their net assets

for the years ended December 31, 2008 and 2007 in accordance with Canadian

generally accepted accounting principles.

Chartered Accountants,

Licensed Public Accountants

Toronto, Ontario

March 4, 2009

ARTISAN PORTFOLIOSManagement and Auditors’ Reports to Unitholders as at December 31, 2008

Annual Financial Statements as at December 31, 2008 3


No. of Shares/ Average Fair

Face Amount Cost ($) Value ($)

678,129 CI Money Market Fund (Class I) 6,781,287 6,781,287

Total Investments (98.2%) 6,781,287 6,781,287

Other Assets (net) (1.8%) 125,009

Total Net Assets (100.0%) 6,906,296

Top 25 holdings of CI Money Market Fund as at December 31, 2008.

Canada Housing Trust No. 1 3.55% 03/15/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4

Canadian Mortgage and Housing FRN 2.02286% 12/01/2009 . . . . . . . . . . . . . . . . . . . 4.0

Government of Canada T-Bill 2.23% 01/08/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8

Province of Ontario FRN 1.87143% 12/03/2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7


Canada Housing Trust No. 1, FRN Series 12 1.71429% 09/15/2010 . . . . . . . . . . . . . . . . 2.6


Canada Housing Trust No. 1 4.65% 09/15/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8

Royal Bank of Canada FRN 2.01% 09/27/2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6


Bank of Montreal FRN 3.29571% 09/02/2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4

Bank of Nova Scotia 3.5% 05/08/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4



Bear Stearns Co. Inc. 3.84857% 10/02/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4

Bank of Montreal FRN 3.18571% 02/01/2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2

Bank of Nova Scotia 3.10286% 05/06/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0

HBOS Treasury Services PLC 1.71714% 09/29/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9

Province of Ontario T-Bill 2.52% 01/29/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9


NAV Canada, Series 2007-1, FRN 2.74571% 05/03/2010 . . . . . . . . . . . . . . . . . . . . . . . 0.8


Canadian Imperial Bank of Commerce 2.78571% 02/02/2009 . . . . . . . . . . . . . . . . . . . 0.8

Royal Bank of Canada 4.18% 06/01/2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7

John Deere Credit Inc. 1.77% 09/29/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7

Portfolio breakdown of CI Money Market Fund as at December 31, 2008.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.9

Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.0

Short Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.6

Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5

ARTISAN CANADIAN T-BILL PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008

*The Portfolio invests in underlying fund which is managed by CI Investments Inc.Percentages shown in brackets relate investments at fair value to total net assets of the Portfolio. The accompanying notes and supplementary schedules are an integral part of these financial statements.

CIG - 6601


ARTISAN CANADIAN T-BILL PORTFOLIOFINANCIAL STATEMENTS

†Investment transactions of the Portfolio are not subject to commissions or transaction costs.The accompanying notes and supplementary schedules are an integral part of these financial statements.

Assets

Investments at fair value*

Cash

Receivable for unit subscriptions

Receivable for securities sold

Management fee rebate receivable

Receivable for dividends and accrued interest

Liabilities

Bank overdraft

Management fees payable

Accrued expenses

Payable for securities purchased

Payable for unit redemptions

Distributions payable

Net assets and unitholders’ equity

*Investments at cost

Net assets per unit

Class A

Number of units outstanding (see Schedule of Portfolio

Unit Transactions)

Class A

Income

Dividends

Interest

Income distribution from investments

Management fee rebate

Expenses

Management fees (Note 4)

Administrative fees (Note 4)

Interest expenses

Goods and services tax

Net investment income (loss) for the year

Realized and unrealized gain (loss) on investments†

Realized gain (loss) on investments

Capital gain distribution from investments

Change in unrealized appreciation (depreciation) of investments

Net gain (loss) on investments

Increase (decrease) in net assets from operations

Increase (decrease) in net assets from operations per unit

Class A

2008 2007

6,781 3,316

53 51

68 18

- -

- -

13 14

6,915 3,399

- -

1 1

- -

- -

- 4

8 12

9 17

6,906 3,382

6,781 3,316

5.00 5.00

1,381,268 676,340

2008 2007

- -

3 2

131 168

- -

134 170

31 26

- -

- -

2 2

33 28

101 142

- -

- -

- -

- -

101 142

0.11 0.20

Statements of Operations for the years ended December 31 (in $000’s except for per unit amounts)

Statements of Net Assets as at December 31 (in $000’s except for per unit amounts and units outstanding)


ARTISAN CANADIAN T-BILL PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

The accompanying notes and supplementary schedules are an integral part of these financial statements.

Class A

Net assets, beginning of year

Capital transactions

Proceeds from units issued

Reinvested distributions

Amounts paid for units redeemed

Distributions to unitholders

From realized gains

From net income

From return of capital


Net assets, end of year

Schedule of Portfolio Unit Transactions for the years ended December 31

2008 2007

3,382 4,061

7,097 2,826

101 142

(3,674) (3,647)

3,524 (679)

- -

(101) (142)

- -

(101) (142)

101 142

6,906 3,382

Statements of Changes in Net Assets for the years ended December 31(in $000’s)

Class A

Balance, beginning of year

Units issued for cash

Units issued for reinvested distributions

Units redeemed

Balance, end of year

2008 2007

676,340 812,156

1,419,519 565,255

20,241 28,262

(734,832) (729,333)

1,381,268 676,340

Annual management fee rate

Class A

Annual fixed administration fee rate

Class A

2008

0.70

-

Schedule of Fees as at December 31(%)

Schedule of Loss Carry Forwards as at December 31 (in $000’s)

Net capital loss carried forward

Non-capital losses expiring:

2009

2010

2014

2015

2026

2027

2028

Total

2008

38

-

-

-

-

-

-

-

-


ARTISAN CANADIAN T-BILL PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)


As at December 31, 2008 had the Canadian markets increased or decreased by 10%, with all

other variables held constant, net assets would have increased or decreased, respectively, by

approximately $678,000. In practice, the actual trading results may differ from this sensitivity

analysis and the difference may be material.

Other Price RiskThe Portfolio bears the other price risk exposure of the Underlying Fund.

Credit RiskThe Underlying Fund was invested in debt securities and derivative instruments if any, with the

following credit ratings, as per table below.

Currency RiskThe Fund bears the currency risk exposure of the Underlying Fund. The Underlying Fund’s

investments are denominated predominantly in Canadian dollars the functional currency of the

Underlying Fund; as a result, the Underlying Fund is not exposed to currency risk.

The Pool was invested in debt securities and derivative instruments if any, with following credit

ratings, as per table below.

as at December 31, 2008*Net Assets

Debt Securities and Derivative Instruments by Credit Rating (%)

AAA/Aaa/A++ 31.3

AA/Aa/A+ 11.2

A 5.1

Not Rated 0.9

Total 48.6

*Credit ratings are obtained from Standard & poor's, otherwise ratings are obtained from: Moody's Investor

Service, Dominion Bond Rating Services and Canadian Bond Rating Services, respectively.




74,167 Cambridge Canadian Equity Corporate Class

(A Shares) 687,389 566,633

16,259 Canadian Equity Value Pool (Class W) 624,054 537,855

47,331 CI American Equity Fund (Class I) 461,712 367,286

44,018 CI International Fund (Class I) 587,229 394,841

71,076 Global Fixed Income Pool (Class I) 764,088 925,406

36,248 International Equity Value Pool (Class W) 482,363 396,913

113,375 Real Estate Investment Pool (Class I) 1,137,956 888,860

339,327 Signature Canadian Bond Fund (Class I) 3,333,578 3,359,333

244,164 Signature High Income Fund (Class I) 3,016,854 2,331,768

36,414 US Equity Value Pool (Class W) 641,669 426,046



Total Net Assets (100.0%) 10,301,804

ARTISAN MOST CONSERVATIVE PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008

*The Portfolio invests in underlying funds which are managed by United Financial Corporation and CI Investments Inc.Percentages shown in brackets relate investments at fair value to total net assets of the Portfolio. The accompanying notes and supplementary schedules are an integral part of these financial statements.

CIG - 6602


ARTISAN MOST CONSERVATIVE PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per unit

Class A


Unit Transactions)

Class A

Income

Dividends

Interest



Expenses



Interest expenses










Class A

2008 2007

10,195 15,606

139 88

67 66

- -

- -

- -

10,401 15,760

- -

1 7

- -

85 -

13 3

- 52

99 62

10,302 15,698

11,737 15,212

8.89 10.85

1,159,266 1,447,013

2008 2007

- -

4 4

575 677

1 1

580 682

279 411

23 32

- 1

15 26

317 470

263 212

(569) 782

1 397

(1,937) (1,646)

(2,505) (467)

(2,242) (255)

(1.69) (0.16)




ARTISAN MOST CONSERVATIVE PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income





2008 2007

15,698 23,389

5,280 3,830

253 836

(8,434) (11,264)

(2,901) (6,598)

- (670)

(253) (168)

- -

(253) (838)

(2,242) (255)

10,302 15,698


Class A




Units redeemed


2008 2007

1,447,013 2,008,579

531,657 329,444

27,471 76,800

(846,875) (967,810)

1,159,266 1,447,013


Class A


Class A

2008

2.20

0.17





2009

2010

2014

2015

2026

2027

2028

Total

2008

208

-

-

-

-

-

-

-

-


ARTISAN MOST CONSERVATIVE PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)


As at December 31, 2008 had the global markets increased or decreased by 10%, with all other

variables held constant, net asset would have increased or decreased, respectively, by

approximately $1,020,000. In practice, the actual trading results may differ from this sensitivity


Other Price Risk The Portfolio bears the other price risk exposure of the Underlying Funds.





(A Shares) 1,695,156 1,372,721

176,723 Canadian Equity Alpha Corporate Class

(A Shares) 1,707,219 1,442,056

47,376 Canadian Equity Value Pool (Class W) 1,814,717 1,567,182

136,075 CI American Equity Fund (Class I) 1,354,046 1,055,938

124,135 CI International Fund (Class I) 1,748,715 1,113,487

192,042 Global Fixed Income Pool (Class I) 2,048,552 2,500,390

111,952 International Equity Alpha Corporate Class

(A Shares) 1,024,115 892,257

101,179 International Equity Value Pool (Class W) 1,856,184 1,107,909

334,335 Real Estate Investment Pool (Class I) 3,436,954 2,621,183



140,919 US Equity Alpha Corporate Class

(A Shares) 1,363,472 1,161,174

106,483 US Equity Value Pool (Class W) 1,902,494 1,245,852



Total Net Assets (100.0%) 30,738,988

ARTISAN CONSERVATIVE PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008


CIG - 6603


ARTISAN CONSERVATIVE PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per unit

Class A


Unit Transactions)

Class A

Income

Dividends

Interest



Expenses



Interest expenses










Class A

2008 2007

30,698 50,073

111 381

25 169

- -

- 1

- 1

30,834 50,625

- -

1 23

- -

28 -

66 54

- 154

95 231

30,739 50,394

36,310 48,171

8.82 11.04

3,486,032 4,565,972

2008 2007

- -

6 9

1,550 1,891

4 6

1,560 1,906

892 1,369

83 118

1 1

48 88

1,024 1,576

536 330

(1,085) 2,376

25 1,437

(7,514) (5,027)

(8,574) (1,214)

(8,038) (884)

(2.01) (0.18)




ARTISAN CONSERVATIVE PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income





2008 2007

50,394 69,039

6,528 8,929

496 2,478

(18,145) (26,680)

(11,121) (15,273)

- (2,271)

(496) (217)

- -

(496) (2,488)

(8,038) (884)

30,739 50,394


Class A




Units redeemed


2008 2007

4,565,972 5,838,778

634,157 754,577

57,471 224,846

(1,771,568) (2,252,229)

3,486,032 4,565,972


Class A


Class A

2008

2.35

0.20





2009

2010

2014

2015

2026

2027

2028

Total

2008

535

-

-

-

-

-

-

-

-


ARTISAN CONSERVATIVE PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)



variables held constant, net assets would have increased or decreased, respectively, by



Other Price RiskThe Portfolio bears the other price risk exposure of the Underlying Funds.





(A Shares) 7,463,310 6,057,678


(A Shares) 6,253,935 5,296,033

365,378 Canadian Equity Small Cap Pool (Class I) 3,880,460 3,153,213



343,411 CI American Small Companies Fund

(Class I) 4,204,808 3,207,457


635,922 Global Fixed Income Pool (Class I) 6,788,277 8,279,706


(A Shares) 4,994,302 4,355,150


1,231,286 Real Estate Investment Pool (Class I) 12,619,550 9,653,279

2,737,220 Signature Canadian Bond Fund (Class I) 26,902,521 27,098,477

1,484,572 Signature High Income Fund (Class I) 19,027,564 14,177,666


(A Shares) 4,989,088 4,254,686




Total Net Assets (100.0%) 111,631,688

ARTISAN MODERATE PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008


CIG - 6604


ARTISAN MODERATE PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per class

Class A

Class F

Net assets per unit

Class A

Class F


Unit Transactions)

Class A

Class F

Income

Dividends

Interest



Expenses



Interest expenses









Increase (decrease) in net assets from operations per class

Class A

Class F


Class A

Class F

2008 2007

111,080 183,222

286 332

315 1,875

48 -

1 1

- 3

111,730 185,433

- -

6 73

- 1

- -

92 284

- 1,638

98 1,998

111,632 183,435

133,743 176,361

111,625 183,435

7 -

8.83 11.37

9.80 -

12,639,889 16,129,794

695 -

2008 2007

- -

40 15

4,677 5,994

14 22

4,731 6,031

3,294 5,101

308 444

2 5

179 330

3,783 5,880

948 151

(5,371) 8,176

(61) 6,295

(29,523) (18,403)

(34,955) (3,932)

(34,007) (3,781)

(34,005) (3,781)

(2) -

(2.42) (0.22)

(1.14) -




ARTISAN MODERATE PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income




Class F







From realized gains

From net income




Total Portfolio







From realized gains

From net income





2008 2007

183,435 244,092

26,836 34,899

811 6,860

(64,641) (91,765)

- (50,006)

- (6,871)

(811) 1

- -

(811) (6,870)

(34,005) (3,781)

111,625 183,435

- -

62 -

- -

(53) -

- -

- -

- -

- -

- -

(2) -

7 -

183,435 244,092

26,898 34,899

811 6,860

(64,694) (91,765)

(36,985) (50,007)

- (6,871)

(811) 1

- -

(811) (6,870)

(34,007) (3,781)

111,632 183,435


Class A




Units redeemed


Class F




Units redeemed


2008 2007

16,129,794 20,218,835

2,615,584 2,885,339

93,968 601,323

(6,199,457) (7,575,703)

12,639,889 16,129,794

- -

6,028 -

12 -

(5,345) -

695 -


Class A

Class F


Class A

Class F

2008

2.45

1.45

0.21

0.21





2009

2010

2014

2015

2026

2027

2028

Total

2008

4,651

-

-

-

-

-

-

-

-


ARTISAN MODERATE PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)











(A Shares) 7,899,661 6,465,960


(A Shares) 6,670,207 5,634,921





(Class I) 4,334,772 3,250,931



(A Shares) 5,715,690 4,977,892



1,670,670 Signature Canadian Bond Fund (Class I) 16,419,486 16,539,632



(A Shares) 4,760,181 4,052,461




Total Net Assets (100.0%) 81,928,755

ARTISAN GROWTH PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008


CIG - 6612


ARTISAN GROWTH PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per unit

Class A


Unit Transactions)

Class A

Income

Dividends

Interest



Expenses



Interest expenses










Class A

2008 2007

81,796 137,253

162 599

197 2,413

- -

1 3

- 3

82,156 140,271

- -

4 64

- 1

82 -

141 232

- 2,217

227 2,514

81,929 137,757

102,892 135,459

8.84 12.09

9,268,549 11,398,147

2008 2007

- -

13 16

2,619 3,673

14 22

2,646 3,711

2,414 3,872

241 354

1 5

132 252

2,788 4,483

(142) (772)

(9,214) 5,485

(138) 5,686

(22,889) (13,629)

(32,241) (2,458)

(32,383) (3,230)

(3.18) (0.25)




ARTISAN GROWTH PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income





2008 2007

137,757 189,248

17,972 27,840

- 4,219

(41,417) (76,093)

- (44,034)

- (4,227)

- -

- -

- (4,227)

(32,383) (3,230)

81,929 137,757


Class A




Units redeemed


2008 2007

11,398,147 14,799,260

1,681,348 2,171,201

11 347,183

(3,810,957) (5,919,497)

9,268,549 11,398,147


Class A


Class A

2008

2.45

0.22





2009

2010

2014

2015

2026

2027

2028

Total

2008

8,221

-

-

-

-

-

-

140

140


ARTISAN GROWTH PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)











(A Shares) 4,291,112 3,482,650


(A Shares) 3,824,052 3,236,570





(Class I) 2,238,694 1,637,421



(A Shares) 3,345,488 2,918,268






(A Shares) 3,344,168 2,852,313




Total Net Assets (100.0%) 40,818,285

ARTISAN HIGH GROWTH PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008


CIG - 6613


ARTISAN HIGH GROWTH PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per unit

Class A


Unit Transactions)

Class A

Income

Dividends

Interest



Expenses



Interest expenses










Class A

2008 2007

40,647 70,092

58 324

138 907

- -

- 2

85 2

40,928 71,327

- -

2 35

- -

34 -

74 141

- 827

110 1,003

40,818 70,324

51,805 69,174

8.79 12.41

4,643,382 5,666,407

2008 2007

- -

7 9

1,182 1,550

8 12

1,197 1,571

1,194 1,966

121 180

- 1

66 128

1,381 2,275

(184) (704)

(5,471) 2,855

(66) 3,241

(12,075) (7,670)

(17,612) (1,574)

(17,796) (2,278)

(3.55) (0.37)




ARTISAN HIGH GROWTH PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income





2008 2007

70,324 93,400

9,984 14,102

- 823

(21,694) (34,896)

(11,710) (19,971)

- (827)

- -

- -

- (827)

(17,796) (2,278)

40,818 70,324


Class A




Units redeemed


2008 2007

5,666,407 7,191,743

931,477 1,081,871

19 66,277

(1,954,521) (2,673,484)

4,643,382 5,666,407


Class A


Class A

2008

2.45

0.22





2009

2010

2014

2015

2026

2027

2028

Total

2008

5,008

-

-

-

-

-

-

988

988


ARTISAN HIGH GROWTH PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)











(A Shares) 1,978,762 1,611,099


(A Shares) 2,576,590 2,184,243





(Class I) 1,139,527 851,482



(A Shares) 2,180,120 1,906,974



(A Shares) 2,178,695 1,863,533




Total Net Assets (100.0%) 16,611,574

ARTISAN MAXIMUM GROWTH PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008


CIG - 6614


ARTISAN MAXIMUM GROWTH PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per unit

Class A


Unit Transactions)

Class A

Income

Dividends

Interest



Expenses



Interest expenses










Class A

2008 2007

16,584 30,864

48 40

17 23

- -

- 1

- 1

16,649 30,929

- -

1 18

- -

19 -

17 29

- -

37 47

16,612 30,882

21,485 29,431

7.52 11.40

2,210,302 2,710,121

2008 2007

- -

3 4

259 388

4 6

266 398

490 849

51 78

- 1

27 55

568 983

(302) (585)

(2,373) 1,601

(20) 1,629

(6,335) (3,895)

(8,728) (665)

(9,030) (1,250)

(3.77) (0.42)




ARTISAN MAXIMUM GROWTH PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income





2008 2007

30,882 40,295

4,329 6,152

- -

(9,569) (14,315)

(5,240) (8,163)

- -

- -

- -

- -

(9,030) (1,250)

16,612 30,882


Class A




Units redeemed


2008 2007

2,710,121 3,390,432

464,706 515,376

- -

(964,525) (1,195,687)

2,210,302 2,710,121


Class A


Class A

2008

2.45

0.22





2009

2010

2014

2015

2026

2027

2028

Total

2008

13,742

-

-

182

-

-

-

303

485


ARTISAN MAXIMUM GROWTH PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)






Other Price Risk The Portfolio bears the other price risk exposure of the Underlying Funds.




41,289 CI Global Balanced Corporate Class

(A Shares) 492,766 407,936

46,657 CI Global Health Sciences Corporate Class

(A Shares) 886,528 762,842

96,739 CI Global Science &

Technology Corporate Class (A Shares) 990,181 745,861



Total Net Assets (100.0%) 1,930,912

ARTISAN NEW ECONOMY PORTFOLIOSTATEMENT OF INVESTMENT PORTFOLIO as at December 31, 2008

*The Portfolio invests in underlying funds which are managed by CI Investments Inc.Percentages shown in brackets relate investments at fair value to total net assets of the Portfolio. The accompanying notes and supplementary schedules are an integral part of these financial statements.

CIG - 6615


ARTISAN NEW ECONOMY PORTFOLIOFINANCIAL STATEMENTS


Assets


Cash





Liabilities

Bank overdraft


Accrued expenses






Net assets per class

Class A

Class F

Net assets per unit

Class A

Class F


Unit Transactions)

Class A

Class F

Income

Dividends

Interest



Expenses



Interest expenses









Increase (decrease) in net assets from operations per class

Class A

Class F


Class A

Class F

2008 2007

1,917 3,191

38 21

1 22

- -

- -

- -

1,956 3,234

- -

- 2

- -

23 -

2 3

- -

25 5

1,931 3,229

2,369 3,138

1,884 3,206

47 23

3.30 4.31

7.48 9.66

570,832 744,071

6,229 2,387

2008 2007

- -

1 1

- -

- 4

1 5

43 90

6 8

- -

2 6

51 104

(50) (99)

(104) 61

- -

(506) (233)

(610) (172)

(660) (271)

(655) (270)

(5) (1)

(1.01) (0.34)

(1.88) (0.35)




ARTISAN NEW ECONOMY PORTFOLIOFINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


Class A







From realized gains

From net income




Class F







From realized gains

From net income




Total Portfolio







From realized gains

From net income





2008 2007

3,206 4,240

485 611

- -

(1,152) (1,375)

(667) (764)

- -

- -

- -

- -

(655) (270)

1,884 3,206

23 -

29 24

- -

- -

29 24

- -

- -

- -

- -

(5) (1)

47 23

3,229 4,240

514 635

- -

(1,152) (1,375)

(638) (740)

- -

- -

- -

- -

(660) (271)

1,931 3,229


Class A




Units redeemed


Class F




Units redeemed


2008 2007

744,071 909,890

125,855 132,572

- -

(299,094) (298,391)

570,832 744,071

2,387 -

3,842 2,387

- -

- -

6,229 2,387


Class A

Class F


Class A

Class F

2008

2.45

1.45

0.22

0.22





2009

2010

2014

2015

2026

2027

2028

Total

2008

8,828

76

46

87

216

124

66

54

669


ARTISAN NEW ECONOMY PORTFOLIOPORTFOLIO SPECIFIC FINANCIAL INSTRUMENTS RISKS (Note 11)




approximately $192,000. In practice, the actual trading results may differ from this sensitivity



36

1. THE ARTISAN PORTFOLIOS

The Artisan Portfolios are open-end investment unit trusts established on

the dates noted below and governed by a Master Declaration of Trust dated

July 26, 2004, as amended and restated. Each is referred to individually as an

“Artisan Portfolio” or a “Portfolio” and collectively as the “Artisan Portfolios” or

the “Portfolios”.

The Artisan Portfolios Date Established

Artisan Most Conservative Portfolio January 13, 1998

Artisan Conservative Portfolio January 13, 1998

Artisan Moderate Portfolio January 13, 1998

Artisan Growth Portfolio January 13, 1998

Artisan High Growth Portfolio January 13, 1998

Artisan Maximum Growth Portfolio January 13, 1998

Artisan Canadian T-Bill Portfolio January 13, 1998

Artisan New Economy Portfolio* August 4, 2000

*commenced operations on November 1, 2000

The manager and trustee of the Artisan Portfolios is United Financial Corporation

(the “Manager”or the “Trustee”). The Manager is a subsidiary of CI Investments Inc.

Each of the Artisan Portfolios offer Class A units and Class F units. Class A units

are available to all investors. Class F units are available only to investors who

participate in certain programs or are members of certain groups, which are

described in the Portfolios’ simplified prospectus.

Class F units became available to investors on September 1, 2007.

The Artisan Portfolios are distributed by principal distributors who have the

exclusive right to distribute units of the Artisan Portfolios in the jurisdictions in

which they are appropriately registered. These principal distributors are affiliates

of the Manager within the meaning of applicable securities legislation. For further

information, please refer to the Artisan Portfolios’ simplified prospectus.

The Artisan Portfolios invest in units of other prospectus-qualified mutual funds

(individually an “Underlying Fund” or collectively the “Underlying Funds”)

as identified in the Artisan Portfolios’ simplified prospectus.

The Statement of Investment Portfolio, Schedule of Fees and Schedule of Tax

Loss Carry Fowards for each of the Portfolios are as at December 31, 2008 and

the Statements of Net Assets are as at December 31 2008 and 2007. The

Statements of Operations, the Statements of Changes in Net Assets, and Schedules

of Portfolio Unit Transactions for each Portfolio are for the years ended

December 31, 2008 and 2007. The Portfolio’s Specific Financial Instruments

Risks for each of the Portfolios are as at December 31, 2008.

2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with Canadian

Generally Accepted Accounting Principles (“GAAP”).

(a) Adoption of New Accounting Standards

The Canadian Institute of Chartered Accountants (“CICA”) issued Section 3862

“Financial Instruments – Disclosures” and Section 3863 “Financial Instruments –

Presentation” in place of Section 3861 “Financial Instruments – Disclosure and

Presentation”. Section 3862 and 3863 became effective for interim and annual

financial statements relating to fiscal years beginning on or after October 1, 2007,

specifically January 1, 2008 for the Portfolios. These sections establish standards

for disclosure of financial instruments including the nature and extent of risks

arising from financial instruments to which the Portfolios are exposed during

the reporting period. The adoption of the new accounting standards has no

impact on valuation policies, nor the way the Portfolios’ Net Assets are calculated.

Section 1535 “Capital Disclosures” establishes standards for disclosing information

about an entity’s capital and how it is managed. The new standard became effective

for interim and annual financial statements relating to fiscal years beginning on

or after October 1, 2007, specifically January 1, 2008 for the Portfolios. The adoption

of the new accounting standard has no impact on the Portfolios’ Net Assets.

(b) Valuation of Investments

The Canadian Institute of Chartered Accountants (“CICA”) issued Section 3855,

“Financial Instruments - Recognition and Measurement”, which requires the fair

value of financial instruments to be measured based on investments’ bid/ask price

depending on investment position (long/short). For financial reporting purposes,

on January 1, 2007 the Portfolios adopted Section 3855 on a retrospective basis

without restatement of prior years’ numbers. Prior to adoption of Section 3855

the fair value of investments for financial reporting purposes was measured based

on the closing market price for the day.

The Canadian Securities Administrators ("CSA") amended section 14.2 of National

Instrument 81-106 on September 5, 2008. The amended section 14.2 requires

the net asset value of an investment fund to be calculated using the fair value of

the fund's assets and liabilities. The adoption of Section 3855 results in a

different valuation method for calculating daily net asset value. For the purpose

of processing unitholder transactions, net asset value is calculated based on the

closing market price (referred to as “Net Asset Value”), while for financial statement

purposes net asset value is calculated based on bid/ask price (referred to as

“Net Assets”). Portfolios invest only in units of underlying funds. As a result,

Section 3855 does not impact the Portfolios’ valuation policies. The underlying

funds will continue to be valued at their net asset value as reported by the funds

manager on the valuation date; therefore no Net Assets Reconciliation schedule

is presented for these funds.

Investments are categorized as held for trading in accordance with Section 3855,

“Financial Instruments – Recognition and Measurement” and are recorded at

their fair value for financial reporting purposes. Listed securities are valued

based on the bid price for securities held long and the ask price for securities

held short on the financial reporting date. Unlisted securities are valued based on

price quotations from recognized investment dealers, or failing that, their fair

value is determined by the Manager on the basis of the latest reported information

available. Fixed income securities, debentures, money market investments and

other debt instruments are valued at the bid quotation from recognized investment

dealers. Underlying funds are valued on each business day at their Net Asset

Value as reported by the fund manager.

When bid and ask prices on the financial reporting date do not accurately reflect

fair value, the Manager of the Portfolios may estimate the fair value of an

investment using established fair valuation methods. For example, a significant

event may occur between the close of foreign markets and the close of the

Toronto Stock Exchange, trading of a security may be halted or a material

announcement can be made after markets close. Management may use valuation

techniques including, but not limited to, consideration of publicly available

information, review of developments in foreign markets, performance evaluation

of exchange-traded proxies such as iShares, futures contracts, commodities and

ARTISAN PORTFOLIOSNotes to the Financial Statements as at December 31, 2008


37

ADRs, for the value of securities not accurately reflecting fair value. The frequency

and timing of when fair value pricing is used is unpredictable. The value of

securities using fair valuation methods may differ from the bid and ask price for

the same securities. Fair valued securities are identified in the Statement of

Investment Portfolio of each Portfolio.

(c) Commissions and other portfolio transaction costs

Transaction costs, such as brokerage commissions, incurred in the purchase and

sale of securities, are included in “Commissions and other portfolio transaction

costs” in the Statement of Operations.

Portfolios that invest only in units of underlying funds are not subject to

transaction costs.

(d) Cost of Investments

Cost of investments represents the amount paid for each security and is determined

on an average cost basis excluding commissions and transactions costs.

(e) Investment Transactions and Income Recognition

Investment transactions are accounted for on the trade date for financial reporting

purposes and any realized gains and losses on such transactions are calculated on

an average cost basis.

Dividend income and distributions from investments are recognized on the

ex-dividend/ex-distribution date and interest income is accounted for on the

accrual basis.

Distributions received from income trust holdings are recorded as income,

capital gains or a return of capital, based on the best information available to the

Manager. Due to the nature of these investments, actual allocations could vary

from this information. Distributions from income trusts that are treated as a

return of capital for income tax purposes reduce the average cost of the

underlying investment trust.

Distributions received from investment fund holdings are recognized by the

Portfolios in the same form in which they were received from the underlying funds.

All income, dividends, net realized and unrealized gains (losses) are attributable

to investments and derivatives which are deemed held for trading.

(f) Foreign Exchange

Foreign currency amounts are translated into Canadian dollars as follows: fair

value of investments, forward currency contracts, other assets and liabilities at

the closing rate of exchange on each business day; income and expenses,

purchases, sales and settlements of investments at the rate of exchange prevailing

on the respective dates of such transactions. Foreign exchange gains (losses) on

completed transactions are included in “Foreign exchange gain (loss)”as reflected

in the Statement of Operations.

(g) Increase (Decrease) in Net Assets from Operations per Unit

Increase (decrease) in net assets from operations per unit in the Statement of

Operations is calculated by dividing the increase (decrease) in net assets from

operations per class by the weighted average number of units outstanding during

the period.

(h) Cash and Short-Term Investments

Cash is comprised of cash on deposit. Short-term investments are comprised of

short-term debt instruments with terms to maturity of less than one year

at acquisition.

(i) Use of Estimates

The preparation of financial statements in accordance with Canadian Generally

Accepted Accounting Principles requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities at the

reporting date and the reported amounts of income and expenses during the

reporting period. Actual results could differ from those estimates.

(j) Net Asset Value Per Unit

Net asset value per unit for each class is calculated at the end of each day on

which the Toronto Stock Exchange is open for business by dividing the total net

asset value of each class by its outstanding units. The net asset value of each class

is computed by calculating the value of that class's proportionate share of the

Portfolio's assets less that class's proportionate share of the Portfolio's common

liabilities and less class specific liabilities. Expenses directly attributable to a class

are charged to that class. Other income and expenses are allocated to each class

proportionately based upon the relative total net asset value of each class.

3. UNITHOLDERS’ EQUITY

Units issued and outstanding represent the capital of each Portfolio.

Each Portfolio is authorized to issue an unlimited number of redeemable, transferable

shares of each class. Generally the Portfolios have no restrictions or specific capital

requirements, except for the minimum subscriptions/redemptions amounts.

The relevant changes pertaining to subscriptions and redemptions of Portfolio

units are disclosed in the Statement of Changes in Net Assets. In accordance with the

objectives and risk management polices outlined in Note 11, the Portfolios endeavor

to invest subscriptions received in appropriate investments while maintaining

sufficient liquidity to meet redemptions through utilizing a short-term borrowing

facility or disposal of investments when necessary.

The unitholders transactions are processed based on Net Asset Value which is

calculated daily based on the closing market price on that day.

4. MANAGEMENT FEES AND OTHER EXPENSES

United Financial Corporation is the Manager of each Portfolio and, in consideration

of management fees, provides management services required in the day-to-day

operations of the Portfolios including management of the investment portfolios

of the Portfolios.

The fee is calculated as an annual percentage of the total net asset value of

Class A or F units of the Portfolio at the end of each business day.

The Manager bears all of the operating expenses of the Portfolios (other than

certain taxes, borrowing costs and certain new governmental fees) in return for

fixed annual administration fees (the “Administration Fees”). Expenses directly

attributable to a class are charged to that class. Other expenses are allocated to each

class proportionately based upon the relative total net asset value of each class.

ARTISAN PORTFOLIOSNotes to the Financial Statements as at December 31, 2008 (cont’d)


38

Each Administration Fee is calculated as a fixed annual percentage of the net

asset value of each class of the Portfolio at the end of each business day.

The management fees reported in the Statements of Operations of each Artisan

Portfolio are net of the management fees and operating expenses paid by its

Underlying Funds.

Refer to Portfolio specific schedules in the financial statements for management

fee and administration fee rates.

5. MANAGEMENT FEE REBATES

During the reporting period the Manager received management fee rebates

from the Underlying Funds. The management fee rebates are included in

“Management fee rebate receivable” and in “Management fee rebate” as reflected

in the Statement of Net Assets and Statement of Operations of each Artisan

Portfolio, respectively.

6. INCOME TAXES

The Portfolios qualify as mutual fund trusts under the provisions of the Income

Tax Act (Canada) and, accordingly, are not subject to tax on net income, including

net realized capital gains for the taxation year, which is paid or payable to

unitholders at the end of the taxation year. However, such part of each Portfolio’s

taxable income and net realized capital gains that is not so paid or payable

will be taxable to that Portfolio. Income tax on net realized capital gains not paid

or payable will generally be recoverable by virtue of refunding provisions

contained in the Income Tax Act (Canada) and provincial income tax legislation, as

redemptions occur. It is the intention of each Portfolio to pay all net taxable

income and sufficient net realized capital gains so that the Portfolio will not be

subject to income tax. Occasionally, a Portfolio may distribute more than it earns.

This excess distribution is a return of capital and is not taxable to unitholders.

Net capital losses may be carried forward indefinitely to reduce future net

realized capital gains. Non capital losses arising in taxation years up to 2003 may

be carried forward seven years. Non capital losses arising in taxation years 2004

and 2005 may be carried forward ten years. Non capital losses arising in taxation

years after 2005 may be carried forward twenty years.

Refer to Portfolio specific schedules in the financial statements for tax loss carried

forward information.

7. RELATED PARTY TRANSACTIONS

On October 6, 2008 Sun Life Financial Inc. sold its significant interest in

CI Financial Corp. (formally CI Income Financial Income Fund to The Bank of

Nova Scotia. As CI Financial Corp. is the parent company of the Manager,

The Bank of Nova Scotia therefore is considered a related party to the Portfolios.

The Bank of Nova Scotia did not hold investments in the Portfolios as at

December 31, 2008.

Blackmont Capital Inc. is a subsidiary of CI Financial Corp. As CI Financial Corp.,

is the parent company of the Manager of the Portfolios, Blackmont Capital Inc.

is thus considered a related party to the Portfolios.

Portfolios that invest only in units of underlying funds are not subject to transaction

costs thus the Portfolios paid no brokerage commissions to Blackmont Capital

Inc. during the years ended December 31, 2008 and 2007.

8. REINVESTMENT OF DISTRIBUTIONS

When a Portfolio pays a distribution to a unitholder, it will be paid in the same

currency in which the units are held. Distributions are automatically reinvested

without charge in the same Portfolio. The Manager may change the distribution

policy at our discretion.

9. FUTURE ACCOUNTING STANDARDS

On February 13, 2008, the Canadian Accounting Standards Board (“AcSB”)

confirmed that use of the International Financial Reporting Standards (“IFRS”)

will be required in 2011 for all publicly accountable profit-oriented enterprises.

IFRS will replace Canadian Generally Accepted Accounting Principles (“GAAP”).

IFRS becomes effective for interim and annual financial statements relating to

fiscal years beginning on or after January 1, 2011.

At December 31, 2008, the Manager is taking the following steps to transition

to IFRS:

• Identification of areas where changes in disclosure will be required under

IFRS standards.

• Identification of operational areas impacted by the adoption of IFRS.

• Assessment of current reporting systems and their readiness for IFRS

implementation.

• Implementation of an IFRS transition plan.

10. FINANCIAL INSTRUMENTS

The categorization of financial instruments in accordance with CICA 3855,

Financial Instruments – Recognition and Measurement (“CICA 3855”) are as

follows: financial assets and financial liabilities held for trading are stated at fair

value. Due from brokers, interest and dividends receivable, subscriptions receivable

and other receivables are designated as loans and receivables and shown as other

assets. They are recorded at cost and amortized cost which approximates their fair

value due to their short term nature. Similarly, redemptions payable, due to

brokers, accrued management fees, accrued expenses and other payables are

designated as financial liabilities and are carried at their amortized cost which

approximates their fair value, due to their short term nature.

11. FINANCIAL INSTRUMENTS RISK

Risk Management

The Portfolios are exposed to a variety of financial instruments risks: credit risk,

liquidity risk and market risk (including interest rate risk, currency risk and

other price risk). The level of risk to which each Portfolio is exposed depends on

the investment objective and the type of investments the Portfolio holds.

The value of investments within a portfolio can fluctuate daily as a result of

changes in prevailing interest rates, economic and market conditions and

company specific news related to investments held by the Portfolio. The Manager

of the Portfolios may minimize potential adverse effects of these risks on the

Portfolios’ performance by, but not limited to, regular monitoring of the Portfolios’

positions and market events, diversification of the investment portfolio by asset

type, country, sector, term to maturity within the constraints of the stated objectives,

and through the usage of derivatives to hedge certain risk exposures.

Portfolios that invest in units of underlying funds are indirectly exposed to

financial instruments risks mentioned above. To minimize the potential adverse

effects of those risks the Manager reviews on a regular basis, but not limited to,

the underlying funds’ investment mandate, returns, assets, investment management

process, and risk levels as well as overall fit of the underlying funds within the



39

Portfolios’ stated objectives. Based on the results of the review the Manager may

mitigate some of the risks by adjusting the weightings of the underlying funds,

or by removing or adding other underlying funds.

Details of individual Portfolio’s exposure to financial instruments risks are

available in the “Portfolio Specific Financial Instruments Risks” section of the

financial statements of each Portfolio.

Other Price Risk

Other price risk is the risk that the value of financial instruments will fluctuate

as a result of changes in market prices (other than those arising from interest

rate risk or currency risk). The value of each investment is influenced by the

outlook of the issuer and by general economic and political conditions, as well

as industry and market trends. All securities present a risk of loss of capital.

Except for options written, future contracts and investments sold short, the

maximum risk resulting from financial instruments is equivalent to their fair

value. Possible losses from options written, future contracts and investments

sold short can be unlimited.

Other assets and liabilities are monetary items that are short-term in nature and

therefore are not subject to significant other price risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value of interest-bearing investments will

fluctuate due to changes in prevailing levels of market interest rates. Each

Portfolio may be exposed to indirect interest rate risk if the Underlying Funds

invest in debt securities and/or income trusts as the Underlying Funds will be

affected by changes in applicable interest rates. If interest rates fall, the fair value

of existing debt securities may increase due to the increase in yield. On the other

hand, if interest rates rise, the yield of existing debt securities decrease which

may then lead to a decrease in their fair value. The magnitude of the decline will

generally be greater for long-term debt securities than short-term debt securities.

Interest rate risk may also apply to the Underlying Funds that invest in convertible

securities. The fair value of these securities varies inversely with interest rates,

similar to other debt securities. However, since they may be converted into

common shares, convertible securities are generally less affected by interest rate

fluctuations than other debt securities.

Currency Risk

Currency risk arises from financial instruments that are denominated in a currency

other than the functional currency of the Portfolios. As a result the Portfolios

may be indirectly exposed to the risk that the value of securities denominated in

other currencies will fluctuate due to changes in exchange rates.

The Portfolios’ direct exposure to currency risk is not significant as the units of

the Underlying Funds held are denominated in Canadian dollars. Each Portfolio

may be exposed to indirect currency risk if the Underlying Funds invest in

financial instruments that are denominated in currencies other than Canadian

dollars, the functional currency of the Underlying Funds.

Credit Risk

Credit risk is the risk that a security issuer or counterparty to a financial instrument

will fail to meet its financial obligations. The fair value of a debt instrument

includes consideration of the credit worthiness of the debt issuer. Each Portfolio

bears the credit risk exposure of the Underlying Funds. Each Portfolio may be

exposed to indirect credit risk if the Underlying Funds invest in fixed income

securities or derivative instruments. The credit risk exposure of Portfolios’ other

assets is represented by its carrying amount as disclosed in the Statement of

Net Assets.

Liquidity Risk

Liquidity risk is the risk that a Portfolio may not be able to settle or meet its

obligations, on time or at a reasonable price. The Portfolios are exposed to daily

cash redemption of redeemable units. Therefore, the Portfolios invest the majority

of their assets in investments that are traded in active markets and can be readily

disposed of. In addition, the Portfolios retain sufficient cash and cash equivalents

positions to maintain liquidity.



40

LEGAL NOTICE

Notice: Should you require additional copies of this Annual Report or have received

more than one copy, please contact United Financial Corporation (the “Manager”)

or your financial advisor.

Commissions, trailing commissions, management fees and expenses all maybe

associated with mutual fund investments. Please read the prospectus before

investing. Unless otherwise indicated and except for returns for periods less than one

year, the indicated rates of return are the historical annual compounded total returns

including changes in security value. All performance data assume reinvestment of all

distributions or dividends and do not take into account sales, redemption,

distribution or optional charges or income taxes payable by any securityholder that

would have reduced returns. Mutual funds are not guaranteed, their values change

frequently and past performance may not be repeated. Mutual fund securities are not

covered by the Canada Deposit Insurance Corporation or by any other government

deposit insurer.

The commentaries contained herein are provided as a general source of information

and should not be considered personal investment advice or an offer or solicitation

to buy or sell securities. Every effort has been made to ensure that the material

contained in these commentaries is accurate at the time of publication. However, the

Manager cannot guarantee its accuracy or completeness and accepts no responsibility

for any loss arising from any use of or reliance on the information contained herein.

Simplified Prospectus: The Simplified Prospectus and Annual Information Form of

a Fund are renewed annually. The Manager would be pleased to provide, without

charge, the most recent Simplified Prospectus upon request to its Toronto office.


ARTISAN PORTFOLIOS

Artisan Canadian T-Bill PortfolioArtisan Most Conservative PortfolioArtisan Conservative PortfolioArtisan Moderate PortfolioArtisan Growth PortfolioArtisan High Growth PortfolioArtisan Maximum Growth PortfolioArtisan New Economy Portfolio

For more information, or to learn more about Artisan Portfolios, please contact your advisor.

United Financial Corporation2 Queen Street East, Twentieth FloorToronto, Ontario M5C 3G7Tel: 1-888-664-4784Fax: 1-866-645-4447E-mail: [email protected]

United Financial and/or United Financial and design is a trademark of United Financial Corporation. 02607 (03/09)

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ARTISAN PORTFOLIOS · The Artisan Portfolios Board of Governors was voluntarily established by United Financial Corporation in 2004. The Board of Governors acts as an independent