Communiqués de presse

First Asset Equal Weight Small-Cap Income Fund Announces Proposal to Merge Into First Asset Equal Weight REIT Income Fund

Toronto, Wednesday, August 2, 2006 - First Asset Funds Inc., the Manager and Trustee of First Asset Equal Weight Small-Cap Income Fund (the "Small-Cap Fund") (TSX: FAS.UN), announces its intention to merge the Small-Cap Fund into First Asset Equal Weight REIT Income Fund (the "REIT Fund") (TSX: RIT.UN). Upon completion of the planned merger, former unitholders of the Small-Cap Fund will become unitholders of the REIT Fund.

The transaction would be completed in accordance with the permitted merger guidelines approved by unitholders of both funds earlier this year. In particular, (a) the Small-Cap Fund and the REIT Fund have similar investment objectives - namely, to provide Unitholders with monthly cash distributions and the opportunity for capital appreciation; (b) both of the funds are managed by First Asset; (c) the Manager has determined that there will be no increase in the management expense ratio borne by the unitholders; Unitholders are, in fact, expected to benefit from the cost savings and increased efficiencies realized by the transaction; (d) the exchange ratio will be determined with reference to the net asset value of the funds, and (e) the merger will be accomplished on a tax-deferred "roll-over" basis for unitholders of the Small-Cap Fund. Prior to the effective date of the merger, the manager of the Small-Cap Fund will liquidate the portfolio securities held by that fund in an orderly manner such that at the time of the merger, assets of the Small-Cap Fund will be comprised entirely of cash.

Unitholders of the Small Cap Fund who do not wish to become Unitholders of the REIT Fund may sell their units prior to the merger or avail themselves of their right to redeem their units in August. The Valuation Date for the redemption is August 30, 2006 and the Cut-Off Date for receipt of redemption requests by the Fund is August 16, 2006. Unitholders of the Small Cap Fund who redeem will receive Net Asset Value per Unit, less any expenses associated with the redemption. The merger will not be effected prior to August 31, 2006.

The proposed merger is subject to obtaining all required regulatory and third party approvals, and the Manager has the authority to delay or terminate the proposed merger if it determines that it would be necessary or desirable to do so. Once all necessary approvals have been obtained, a press release will be issued confirming the effective date of the merger.

First Asset Equal Weight REIT Income Fund

The REIT Fund is designed to provide its unitholders with high levels of tax efficient monthly cash distributions by investing in an equally weighted diversified portfolio of real estate income trusts ("REITs") using a passive investment approach. The Fund also provides the benefit of a low management fee of 0.45%. The Fund's portfolio is comprised of an approximate equal dollar amount of securities of each REIT listed on the TSX that pays a regular distribution and that has a market capitalization of at least $300 million at the time of investment. The portfolio is rebalanced annually to adjust for changes in market capitalizations, to add newly qualified REITs and to remove those REITs that cease to qualify under the REIT Fund's investment guidelines.

The Manager believes REITs currently offer the opportunity for stable monthly cash distributions and capital appreciation from growth in the real estate sector and from consolidation and privatization activity in the REIT market. There has been a growing trend of privatization and mergers and acquisitions in the REIT market in the United States and the Manager believes that this consolidation trend will expand into Canada, particularly as private equity funds and other investors seek to increase their stakes in Canadian real estate assets. Alternatively, in anticipation of acquisition activity, Canadian REITs may seek to increase their own internal leverage, with the potential accretion flowing to Unitholders.

First Asset Equal Weight REIT Income Fund as at July 31, 2006:

Total Net Assets:$112.9 million
Net Asset Value/Unit:$11.56
Current Yield:6.73%
Performance based on opening NAV, including distributions:
1 month3.59%
Year to date7.12%
1 year13.98%
Since inception19.82% (compound annual)

The REIT Fund is listed on the Toronto Stock Exchange under the ticker symbol RIT.UN.

For further information, please contact Rob MacNiven, Investor Relations, First Asset Funds Inc. at 416-642-1289 or 1-877-642-1289, or visit