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Thursday, November 22, 2007

Collapse of SDT.UN Market Price

Sentry Select Diversified income exchange traded fund has experienced a severe market price collapse. It appears to me that a lot of the new unit holders from the share exchange offering are jumpimg out of their positions.

The question on everyone's mind is why hasn't Sentry conducted a large buy back to support the unit price.

I can't answer this question but I can tell you the following;

Approximate Number of Units Outstanding as of Oct 1, 2007; 200,000,000

Approximate Nmber of Units Outstanding as of Oct 31, 2007; 265,000,000

Approximate number of units cancelled due to share purchase on the open market as of Oct 31, 2007; 6,500,000

Approximate number of units available for cancellation in the 4th quarter (5% of outstanding units at begining of qtr); 10,000,000

Approximate number of shares available for cancellation in Q4; 3,500,000

Approximate Number of Units held by Manager Sandy McIntyre; 365,000

Net Asset Value as of Nov 15, 2007 (even less now); $4.82

Market Value as of Nov 21, 2007 (even less today); $4.00

Discount to Net Asset Value; 17%

Annualized Distribution per Unit; $0.54

Yield on Market Value; 13.5%

Yield on Net Asset Value; 11.2%

It appears to me that SDT.UN will not repurchase units to support the unit price until later on this quarter. Until then if you want to sell you will need to accept a huge discount to Net Asset Value.

I am holding on to my remaining position until the units trade within 5% of Net Asset Value. At that point I will probably exit my position.

Please perform your own due diligence.

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