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Topic: How To Invest

TD CANADIAN SMALL-CAP EQUITY FUND $21.56

TD CANADIAN SMALL-CAP EQUITY FUND $21.56 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9. 1-800-386-3757; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) is a fund we rate as Aggressive. The fund invests in small to medium-sized companies that its managers feel are undervalued or offer strong growth potential as the economy improves. These firms are mainly located in Canada, but the fund invests in other countries, as well.

Its top 10 holdings are: RuggedCom Inc., Eldorado Gold, Red Back Mining, Celtic Exploration, Addax Petroleum Corporation, Industrial Alliance Insurance & Financial Inc., TMX Group Inc., Progress Energy Resources, Cogeco Cable and Aecon Group.

TD Canadian Small Cap Equity Fund stands out among small-cap funds because it focuses on well-established companies with strong management and prominent positions in their industries. It also invests in Canadian stocks. The riskiest small-cap funds invest in less-regulated overseas markets.

Small-cap stocks are a lot riskier than large caps. They are also much more volatile. One bad quarter of earnings, or the loss of a major contract, for example, can quickly cut a firm’s share price. That’s why we rate even the best small-cap funds as Aggressive.

TD Canadian Small Cap Equity Fund is an Aggressive buy.

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