June 7, 2011

Dear Fellow Unitholders,

Over the past year, we have stubbornly stuck to our large cash position in the Steinberg Value Equity Fund and suffered the slings and arrows of a rising stock market.  We have always told investors that our investment philosophy is to hold cash when we perceive that there is too much risk.  In order to generate strong investment results one must be able to preserve capital during down markets.

We don’t know if the current weakness is merely a momentary blip, or the start of a more substantive correction.  What we do know is that equity prices are getting much more attractive.  We added one new position during the month – Overseas Shipholding Group, a major marine shipping company of oil and petroleum products.  The shares have tumbled from around $80 in 2007 to below $30 today.  The company has very strong management and a great long term track record.  It is solidly capitalized and has never cut its dividend since it started paying one in 1974.  At the price we paid, the dividend yield is 6.5%. 

The market risks we have discussed previously still remain, but the weak U.S. jobs and housing data released last week, combined with slowing growth in China, seems to be causing worry for investors.

In the Steinberg High Yield Fund, all of our holdings are performing well.  We recently purchased a new issue after selling our holdings in BP at a considerable profit.  We anticipate interest rates to move higher this year in Canada and are therefore keeping the duration of the high yield fund relatively short.