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DIAMONDS TRUST SHARES $133 (American Exchange symbol DIA; buy or sell through brokers) hold the 30 stocks that make up the Dow Jones Industrial Average. Currently, the fund’s top 10 holdings are IBM, 3M, Boeing Co., United Technologies, Caterpillar, Altria Group, American International Group, Johnson & Johnson, Procter & Gamble and Exxon Mobil....

S&P DEPOSITORY RECEIPTS $148 (American Exchange symbol SPY; buy or sell through brokers) are commonly called ‘Spiders’. The fund holds the stocks in the S&P 500 Index. This index is comprised of 500 major U.S. stocks chosen for market size, liquidity, and industry group representation....

NASDAQ-100 TRUST SHARES $49.18 (Nasdaq Exchange symbol QQQQ; buy or sell through brokers) or ‘Qubes’, hold the stocks that represent the Nasdaq-100 Index. This index is made up of the 100 largest and most heavily traded stocks on the Nasdaq Exchange. The index reflects firms across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. Expenses are about 0.20% of assets. The top 10 highest-weighted stocks are Apple Computer, Microsoft, Qualcomm, Google, Cisco, Intel, Research in Motion, Comcast, Oracle and e-Bay. Nasdaq-100 Trust Shares are a buy for aggressive investors only.

ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets. Most of the 60 stocks in the index are good quality companies. However, to meet the requirement that all sectors are represented, the index holds a few firms we wouldn’t include, such as Cott Corporation and Celestica. The index’s top holdings are: Royal Bank, 6.6%; Manulife, 5.8%; TD Bank, 4.7%; Bank of Nova Scotia, 4.7%; EnCana Corporation, 4.4%; Suncor Energy, 3.9%; Research in Motion, 3.7%; Canadian Natural Resources, 3.5%; Bank of Montreal, 3.1%; CIBC, 3.3%; BCE Inc., 2.6%; Barrick Gold, 2.8%; Sun Life Financial, 2.9%; and Potash Corp., 2.6%....

ISHARES CANADIAN BOND BROAD INDEX FUND $28.47 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the Scotia Capital Universe Bond Index. This index consists of a diversified range of investment grade Canadian government and corporate bonds, with a term to maturity of more than one year. At last report, the bonds in the index were 42.5% Government of Canada bonds, 27.5% Provincial Government bonds, 1.3% Municipal bonds and 28.7% Corporate bonds....

ISHARES CANADIAN SHORT BOND INDEX FUND $28.03 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the Scotia Capital Short Term Bond Index. This index consists of a diversified range of investment grade federal, provincial, municipal and corporate bonds, with terms to maturity of between one and five years. Top issuers include Canada Mortgage and Housing, RBC Capital Trust, Province of Ontario, Province of Quebec, Royal Bank of Canada and Bank of Nova Scotia....

RBC CANADIAN DIVIDEND FUND $49.82 (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) has 43.8% of its portfolio in Financial services stocks. It has a further 16.9% in Energy stocks and 8.1% in Materials. The $8.9 billion RBC Canadian Dividend Fund’s top stock holdings are Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank, Manulife Financial, Canadian Imperial Bank of Commerce, TransCanada Corporation, Bank of Montreal, BCE Inc. and Suncor Energy. Over the last five years, RBC Canadian Dividend Fund has posted a 15.8% annual rate of return. That’s less than the S&P/TSX’s gain of 18.4% over the same period....

BMO DIVIDEND FUND $50.82 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) currently holds about 57.3% of its portfolio in the Financial services industry. Its next-largest holdings are Energy at 13.3% and Consumer discretionary at 6.5%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Power Financial, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Alcan, Imperial Oil, Brookfield Asset Management, Thomson Corporation, BCE Inc. and Sun Life Financial. Over the last five years, the $5.9 billion BMO Dividend Fund has posted a 15.3% annual rate of return. That’s under the S&P/TSX’s gain of 18.4%. However, the S&P/TSX index held a high 40% or so of its holdings in Resources shares. That’s been one of the best-performing, although riskiest, sectors. The fund gained 15.4% over the last year, compared to a gain of 20.1% for the S&P/TSX index. BMO Dividend’s MER is 1.73%....

WELLS FARGO & CO. $36 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 3.3 billion; Market cap: $118.8 billion; WSSF Rating: Average) continues to expand its retail banking business. As well, the company shut down its subprime wholesale mortgage business, which processes loans for third-party brokers. The stock trades at 13.1 times the $2.74 a share it should earn in 2007. The $1.24 dividend yields 3.4%. Wells Fargo is a buy.

WACHOVIA CORP. $48 (New York symbol WB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.9 billion; Market cap: $91.2 billion; WSSF Rating: Average) is cutting its exposure to housing with its recent deal to buy brokerage firm A.G. Edwards Inc. When the purchase closes later this year, it will make Wachovia the second-largest retail brokerage firm in the United States, after Merrill Lynch. Wachovia’s strong history of successfully integrating new operations cuts the risk of using acquisitions to grow. Wachovia should earn $4.93 a share in 2007, and the stock trades at just 9.7 times that estimate. The $2.56 dividend yields 5.3%. Wachovia is a buy.

BANK OF AMERICA CORP. $51 (New York symbol BAC; Income Portfolio, Finance sector; Shares outstanding: 4.4 billion; Market cap: $224.4 billion; WSSF Rating: Above average) has little exposure to subprime mortgages, but it aims to profit from the recent turmoil. It has agreed to buy $2 billion worth of convertible preferred shares from mortgage specialist Countrywide Financial Corp. (New York symbol CFC). If converted, Bank of America would own about 16% of Countrywide. This investment is roughly a third of the $5.8 billion or $1.29 a share Bank of America earned in its latest quarter. While it adds to its risk, it could have a big payoff. Rules that ban a single bank from controlling more than 10% of U.S. deposits have hurt Bank of America’s ability to expand. However, the Countrywide investment should improve its 7% share of the mortgage market. The stock trades at 10.4 times the $4.90 a share it should earn in 2007. It raised its dividend 14.3% to $2.56 a share (5.0% yield)....

APACHE CORP. $75 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 332.0 million; Market cap; $24.9 billion; WSSF Rating: Average) explores for and produces oil and gas, mostly in North America. It also has operations in the UK, Argentina, Australia and Egypt. The company reserves are roughly half oil and half natural gas. Apache spends heavily on exploration and acquisitions to replenish its reserves. For example, it recently paid $1 billion for 28 oil and gas fields in Texas. This purchase increased Apache’s oil reserves by 8%, and its gas reserves by 5%. Thanks to this acquisition and increased production at its other properties, Apache’s revenue in the three months ended June 30, 2007 rose 19.1%, to $2.5 billion from $2.1 billion....

ENCANA CORP. $59 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 753.3 million; Market cap: $44.4 billion; WSSF Rating: Average) is one of North America’s leading producers of natural gas. The company prefers to focus on early-stage properties in Alberta and the U.S. Rockies. These assets cost more to develop, at least initially, but should last much longer than conventional gas fields. Natural gas accounts for 80% of its production. EnCana is also active in Alberta’s oil sands region. But extracting the heavy, tar-like oil sands is much more costly than operating regular oil wells. That’s why EnCana recently folded its oil sands assets into two joint ventures with ConocoPhillips— one to operate the oil sands, and one to refine heavy oil. The two ventures operate independently of each other. In the second quarter of 2007, earnings before hedging gains and other one-time items jumped 83.7%, to $1.80 a share from $0.98 a year earlier, while cash flow per share rose 54.9%, to $3.33 from $2.15. Revenue rose 43.6%, to $5.6 billion from $3.9 billion, due to the expansion of its oil sands business....

CHEVRON CORP. $87 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $182.7 billion; WSSF Rating: Above average) is the secondlargest integrated oil company in the United States after ExxonMobil. Operations include refineries, pipelines and 25,800 gas stations under the Chevron, Texaco and Caltex banners. In the past few years, Chevron has used acquisitions to offset declining production. It’s also facing rising operating costs as it develops methods to extract oil and gas from deeper levels. But like research costs at a technology company, investments in new reserves should pay off for years to come. Chevron’s expertise has helped it win a new contract with China’s state-owned oil company to jointly develop a major gas field. This deposit is difficult to get at, and its high sulfur content will cost more to process. But this project has huge long-term potential in light of China’s growing energy needs....

AMERICAN EXPRESS CO. $58 (New York symbol AXP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $69.6 billion; WSSF Rating: Average) is one of the world’s biggest financial services companies, with offices in over 130 countries. Warren Buffett’s Berkshire Hathaway owns about 13% of the company. Best known for its American Express charge and credit cards, the company gets most of its revenue from fees it charges merchants when cardholders purchase goods and services. Its other major business is its 2,200 travel agencies and travelers checks. Despite the wave of new customers in the past few years, most American Express cardholders tend to have above-average incomes and good credit histories. They also spend, on average, over $11,000 a year....

TIM HORTONS INC. $35 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 188.8 million; Market cap: $6.6 billion; SI Rating: Extra risk) operates 2,733 coffee-and-donut shops in Canada, and 345 in the United States. Franchisees operate 97.5% of its stores. Much of the company’s growth comes from a steady stream of new products, and innovative promotions. Healthier menu items such as fresh sandwiches, soups and salads have also helped it attract customers who avoid donuts. In the three months ended July 1, 2007, earnings fell 11.9% to $67.2 million from $76.3 million a year earlier. Write-offs related to the company’s initial public offering gave it an unusually low tax rate of 19.8% in the year-earlier quarter. The tax rate in the latest quarter grew to a more normal 33.8%. Per-share earnings fell 7.7%, to $0.36 from $0.39, due to fewer shares outstanding....

MAPLE LEAF FOODS INC. $15 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 128.6 million; Market cap: $1.9 billion; SI Rating: Average) makes fresh and frozen meat products, mainly under the Maple Leaf and Schneiders brands. It also owns 88.0% of Canada Bread Company (see box at right). The company is currently restructuring its operations to focus on value-added products, which generate higher profits than fresh meat. Consequently, it recently closed two pork processing plants and will close a third later this year. In the second quarter of 2007, Maple Leaf’s revenue fell 2.9%, to $1.32 billion from $1.36 billion a year earlier. However, earnings from continuing operations and excluding restructuring costs grew 8.3%, to $0.13 a share (total $52.7 million) from $0.12 a share ($46.8 million)....

CANADIAN IMPERIAL BANK OF COMMERCE $87 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 337.5 million; Market cap: $29.4 billion; SI Rating: Above average) provides an example. CIBC has some exposure to the U.S. subprime mortgage market, which is the source of today’s credit worries and market downturn. Growing uncertainty in the mortgage market will force CIBC to write down its U.S. investment portfolio by $190 million (after-tax) in its third fiscal quarter ended July 31, 2007. It earned $807 million or $2.27 a share in its second quarter....

CANADIAN PACIFIC RAILWAY LTD. $70 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.1 million; Market cap: $10.7 billion; SI Rating: Above average) transports freight over a rail network between Montreal and Vancouver. In the United States, subsidiaries connect CP’s Canadian lines to major hubs in the Midwest and Northeast. Alliances with other railways extend its reach to Mexico. CP’s revenue rose from $3.7 billion in 2002 to $4.6 billion in 2006, largely due to the expansion of trade with Asia. Profits fell from $3.06 a share (total $487.5 million) in 2002 to $2.52 a share ($401.3 million) in 2003 due to higher fuel costs....

JAPAN SMALLER CAP FUND $11.39 (New York symbol JOF; CWA Rating: Aggressive) invests mainly in less-widely-followed Japanese over-the-counter stocks. The fund’s top holdings are Jupiter Telecom, Suruga Corp., Nichias Corporation, Tokai Rubber, Futuba Industrial, Aeon Delight, Disco Corp., Kansai Urban Banking, Nagase & Company and Yokahama Rubber. Japan Smaller Cap Fund sells for a 0.4% premium above the current value of its assets. Our long-standing advice is that you only buy closed-end funds trading at close to or below net asset value. Japan Smaller Cap is a buy.

JAPAN EQUITY FUND $8.12 (New York symbol JEQ; CWA Rating: Aggressive) invests mostly in large capitalization stocks on the Tokyo Stock Exchange. The Japan Equity Fund’s top holdings include: Toyota Motor, Mitsubishi UFJ Financial Group, Mizuho Financial, Matsushita Electric Industrial, Nomura Holdings, Mitsubishi Heavy Industries, Canon, Takeda Pharma, and NTT. Japan Equity Fund is available for 6% less than the current value of its assets. It’s a buy.

RIOCAN REAL ESTATE INVESTMENT TRUST $22.30 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 206 retail properties across Canada, including nine under development. These properties contain over 52.1 million square feet of leasable area. RioCan’s revenue in the three months ended March 31, 2007 was $174.5 million, up 9.6% from $159.2 million a year earlier. Cash flow per unit was unchanged at $0.35. RioCan’s annual distribution of $1.32 gives it a current yield of 5.9%. RioCan is focusing its future development on six high-growth markets — Toronto, Ottawa, Montreal, Calgary, Edmonton and Vancouver. Although land costs more in these markets than other areas, RioCan feels their strong growth prospects offset the higher building costs....

CANADIAN REIT $28.99 (Toronto symbol REF.UN; SI Rating: Extra Risk) owns a portfolio of more than 140 income properties consisting of retail, industrial and office properties across Canada and in the Chicago, Illinois area. The company’s portfolio contains more than 19 million square feet of space. CREIT’s revenue in the three months ended March 31, 2007 was $72.7 million, up 11.7% from $65.1 million a year earlier. Cash flow per unit rose 10.9% to $0.51 from $0.46. The units now yield 4.7%. CREIT focuses on acquiring properties in prime locations, usually near major metropolitan centres, that attract strong tenants, maintain high occupancy rates and deliver a reliable stream of rental income....

H&R REAL ESTATE INVESTMENT TRUST $21.95 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 35 office properties, 115 single-tenant industrial properties and 143 retail properties. Over half are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the U.S. H&R aims to acquire only properties that it can lease long-term to creditworthy tenants. It now has an industry-leading portfolio occupancy rate of 99.7%. Revenue in the three months ended March 31, 2007 was $153.7 million, up 19.1% from $129.1 million a year earlier. Cash flow per unit rose 2.3%, to $0.44 from $0.43. H&R’s units now yield 6.1%. H&R REIT is a buy.

MANULIFE FINANCIAL $39.07 (Toronto symbol MFC; SI Rating: Above-average) sells life and other forms of insurance, as well as mutual funds and investment management services. It operates in 19 countries and territories worldwide. Manulife has assets under administration of $426 billion. In the three months ended March 31, 2007, Manulife’s earnings excluding one-time items rose 10.8%, to $1.1 billion or $0.68 a share, from $952 million or $0.60 a share a year earlier. Revenue rose 2.6%, to $8.6 billion from $8.4 billion. Manulife has raised its dividend 10%, to $0.22 from $0.20. The shares now yield 2.3%. Manulife’s operations are diversified among life and health insurance, segregated mutual funds, and reinsurance. Its geographic diversification in the U.S. and Asia, including China, offers growth prospects....