Investors Group Inc.
Consolidated Financial Position

The Company’s on-balance sheet assets totaled $6.29 billion at December 31, 2003, compared to $5.99 billion at December 31, 2002.

SECURITIES

The Company’s holdings of securities were $106.2 million at December 31, 2003, a decrease of $50.0 million or 32.0% from 2002. Securities currently represent 1.7% of total assets as compared with 2.6% at December 31, 2002. The market value of the Company’s portfolio at December 31, 2003 exceeded cost by $125.1 million, consistent with the prior year end.

The Company continually strives to ensure that its portfolio holdings are of the highest quality. To manage the market and credit risk associated with the securities portfolio, a Senior Management Investment Committee monitors the Company’s portfolio and approves all purchases.

This Committee regularly reviews the portfolio to identify holdings where there has been an other than temporary decline in value. In these circumstances, the carrying amount of the security is written down to recognize the loss.

LOANS

Loans, including mortgages and personal loans, decreased by $21.0 million to $528.0 million at December 31, 2003 and represent 8.4% of total assets compared to 9.2% in 2002. This decrease is comprised of $66.5 million in mortgages and personal loans related to the Company’s intermediary activities and an increase of $45.5 million in residential loans related to the Company’s mortgage banking operations.

Residential mortgage loans, sourced with the assistance of Investors Group Consultants, are primarily designated for sale to third parties on a fully serviced basis through Investors Group’s mortgage banking operations. Mortgage loans sourced through mortgage brokers and personal loans sourced through the MRS Group relate to M.R.S. Trust’s intermediary activities. M.R.S. Trust also sells mortgages and personal loans to third parties on a fully serviced basis through its securitization activities.

Credit Risk

At December 31, 2003, impaired loans totaled $2.2 million, unchanged from the prior year, and represented .40% of the total loan portfolio, compared with .38% at December 31, 2002. The Company monitors its credit risk management policies continuously to evaluate their effectiveness. These policies and practices have resulted in the effective control of impaired loans.

Management continued its conservative policy of maintaining adequate allowances to absorb all known and foreseeable credit-related losses in the mortgage, loan, and real estate portfolios. The allowance for credit losses exceeded impaired mortgages and loans by $19.3 million as at December 31, 2003, compared to $19.4 million at December 31, 2002.

During 2004, the Company does not expect any significant losses in its mortgage portfolios because:

• The portfolios are 94% residential and 63% insured.
• 75% of the portfolios are owner occupied.
• The mortgages in the portfolios are geographically diverse.
• The Company continues to apply strict credit risk management policies.

The characteristics of the mortgage portfolios at December 31, 2003 described above are consistent with prior years.