Solidarity Fund QFL Posts Negative Results for the First Half of Its Fiscal Year



    
       "Smart investments with a view to the long term and shareholder
             confidence will help us through this tough period."
         - Yvon Bolduc, President and CEO of the Solidarity Fund QFL
    

    MONTREAL, Jan. 5 /CNW Telbec/ - Not spared by the difficult economic and
financial situation, the Solidarity Fund QFL posted a negative return of
-15.3% for the first six months of its fiscal year ended November 30, 2008.
The U.S. financial crisis that reverberated around the world has had a
definite impact in Québec, where volatile stock markets wreaked havoc on
publicly traded companies. This crisis also created significant credit
spreads, especially in corporate securities. As such, the Fund ended the first
half of its fiscal year in a highly unstable economic and market environment.
    To put things into perspective, the Fund's performance compares
favourably with the principal stock indices(1), which lost about 40% during
the same period, and with Canadian balanced funds(2), which fell by some 20%.
In light of the foregoing, the Fund's share value is now $21.20, a decrease of
$3.85 since July 5, 2008.
    "The Fund is in the same environment as the rest of the industry in that
we are also feeling the fallout of the stock market and the financial crisis.
While these conditions are especially tough, the Fund is actually faring
better than the principal stock indices and most Canadian balanced funds. I
would like to reassure our shareholders that the Fund is on solid ground with
no debt and well-diversified, substantially liquid assets. We are also
rigorously managing every aspect of our operations," said the Fund's president
and CEO, Yvon Bolduc.
    "In these challenging times, the Fund must, more than ever before,
continue to be a patient, strategic investor. I can't help but mention that
unfettered deregulation of the financial industry has cost thousands of
workers their jobs and threatened their retirement savings," stated Michel
Arsenault, chairman of the Fund and president of the QFL.
    "Thanks to tight management, the Fund's operating costs are among the
lowest in Canada. I would like to encourage other funds and the financial
industry to focus on long-term development rather than gambling on
questionable financial products that promise high returns but that ultimately
don't deliver in the medium and long term. This is what we need to rebuild
investor confidence and to restore market liquidity," added Mr. Arsenault.
    Pointing out that the Fund was created in tough times 25 years ago, Mr.
Arsenault recalled the organization's structuring role for the Québec economy.
"With nearly 1,900 partner companies, we have played a role in protecting,
creating, and preserving over 126,000 jobs while helping more than 575,000
Quebecers save for retirement. We didn't get there by ourselves. We were able
to do this thanks to a solid network of over 2,200 local representatives who
promote the merits of the Fund to their co-workers, and to the 30% tax credits
granted by the two governments, which quickly recover their investment."

    The Fund continues to invest in the Québec economy

    "The fact that we kept up our investment pace in the first half of the
year, investing $344 million, attests to the fact that Québec entrepreneurs
are resilient despite this difficult period and tighter credit conditions.
Indeed, this downturn may be a good time for them to review their internal
processes, optimize their operations, redefine their markets and perhaps even
seize opportunities. Our teams are working closely with business owners in
anticipation of the tough months ahead. The Fund will therefore continue
investing with a view to the long term to help businesses weather this storm
and look to the future with optimism," added Mr. Bolduc.

    Structuring investments

    The Fund made a number of structuring investments during this first half
of the year, helping to create, protect and preserve quality jobs. Examples
include a $30 million investment in Placements Montrusco Bolton to help this
prominent portfolio manager bring back its decision-making centre to Québec;
$20 million to finance an acquisition of a regional chain bought by Groupe
B.M.R. in a bid to fend off competition from foreign-owned mega renovation
centres; $100 million to help Corporation Financière l'Excellence, a
subsidiary of Industrial Alliance Insurance and Financial Services, to
continue growing through acquisitions; $6 million for Solmax to consolidate
its position in Québec and pursue its international strategy; and finally, $2
million in the Fonds soutien Montréal parallèle, a fund that provides
Information and Communication Technology start-ups with seed capital.

    Encouraging Quebecers to save

    Despite the economic downturn, the Fund continues to encourage workers to
save for retirement by using all the means at their disposal. By offering
payroll deduction, which allows workers to immediately receive their tax
credit, the Fund's RRSP is an easy way to build a retirement nest egg.

    RRSP campaign continues

    For the current fiscal year, the Fund's limit for contributions giving
rise to tax credits is $700 million. The Fund expects to reach the limit for
lump-sum contributions in early February, after which this type of share
purchase will not be accepted.

    
    Financial Highlights
    -------------------------------------------------------------------------
                                      November 30, 2008        May 31, 2008
    -------------------------------------------------------------------------
                                         (in dollars)          (in dollars)
    -------------------------------------------------------------------------
    Net value per share                      21.20                 25.05
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                               (in millions of dollars)
    -------------------------------------------------------------------------
    Net assets                               6,171                 7,285
    -------------------------------------------------------------------------
                                                     November 30
    -------------------------------------------------------------------------
                                              2008                  2007
    -------------------------------------------------------------------------
                                                     (6 months)
    -------------------------------------------------------------------------
    Revenues                                (1,068)                   61
    -------------------------------------------------------------------------
    Net earnings (net loss)                 (1,116)                   13
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Six-month return                         (15.3)%                 0.2%
    -------------------------------------------------------------------------
    

    -----------------------------
    (1) From June 1 to November 30, 2008, the Québec Nesbitt Index was down
    51.0%, the S&P 500 fell 36.0%, the Nasdaq decreased 39.1%, the Russell
    2000 declined 36.8%, and the S&P/TSX lost 37.0%.
    (2) Average return of Canadian balanced funds from June 1 to November 30,
    2008: -20.9% (source: global neutral balanced funds as compiled by
    globefund.com).




For further information:

For further information: Note: The telephone number provided below is
for the exclusive use of journalists and other media representatives: Josée
Lagacé, Senior Advisor, Press Relations and Communications, Fonds de
solidarité FTQ, (514) 850-4835,  jlagace@fondsftq.com


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