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CENTRAL EUROPE AND RUSSIA FUND $64.20 (New York symbol CEE; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in larger cap stocks from Russia and central Europe. The fund’s manager is Deutsche Asset Management International. The $884.5 million fund is currently invested in Russia (54%), Poland (21%), Turkey (11%), Czech Republic (5%), Hungary (5%), Austria (3%) and Cyprus (1%). Central Europe and Russia Fund’s top holdings are Gazprom (a Russian gas utility) at 9.7%; Lukoil (Russian oil and gas), 7.3%; Norilsk Nickel (Russian metals and mining), 7.0%; Unified Energy (Russian electric utility), 5.2%; Sberbank (Russian bank), 4.6%; Bank Polska (Polish bank), 4.6%; Ceske Energticke (Czech energy equipment and services), 3.9%; Bank Pekao (Polish bank), 3.6%; Telekomunikacja Polska (Polish telecom), 3.6%; and OAO Rosneft (Russian oil and gas), 3.1%....

TD SCIENCE & TECHNOLOGY FUND $15.36 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W1P9. 1-800-386-37 57; Web site: www.tdcanadatrust.com. No load — deal directly with TD) invests mostly in U.S. firms engaged in the research, development and production of products or services related to science and technology. TD Science & Technology’s top holdings include: Microsoft Corporation, Google, Cisco Systems, Hewlett-Packard, American Tower, Qualcomm, Electronic Arts, Foxconn International, Adobe Systems, Marvell Technology Group, Samsung, Nokia, Intel and Apple. The fund’s gain in Canadian dollars over the last year was 11.0%. The Nasdaq index rose 6.9% in Canadian funds. The $115.3 million fund’s manager is well-respected U.S. mutual fund manager T. Rowe Price Associates. Its MER is 2.70%....

ALTAMIRA SCIENCE & TECHNOLOGY FUND $8.82 (CWA Rating: Aggressive) (Altamira Investment Services, The Exchange Tower, 130 King St. West, Suite 900, Toronto, Ont. M5X 1K9. 1-800-263-2824; Web site: www.altamira.com. No load — deal directly with the company) invests in the telecommunications, biotechnology, environmental technology, health care and computer industries. Top holdings are Microsoft, Oracle, VeriSign, Sun Microsystems, Intel, Medco Health Solutions, Google, Research in Motion and Cisco Systems. The $64.2 million fund gained 11.8% in Canadian dollars over the last year. The Nasdaq index rose 6.9% in Canadian funds. The fund’s MER is 2.70%....

POWER CORPORATION $40.52 (Toronto symbol POW; SI Rating: Above average) is a diversified holding company. Power Corp., founded in the 1920s to develop hydroelectric power, now controls one of Canada’s largest mutual-fund companies, IGM Financial, and Great- West Lifeco, one of the largest life insurers. Power Financial, 66.4% held, is a holding company for Power Corp.'s financial assets, including 72.9% of Great-West Lifeco and 58.4% of IGM Financial. As well, Power Financial holds 50% of Parjointco, which in turn owns a 54.3% interest in Swiss-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals processing), Total SA (world’s fourth-largest oil firm), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials.) Power Corp. also owns 100% of Gesca Ltée, which publishes Montreal’s La Presse and six other daily newspapers....

TEXAS INSTRUMENTS INC. $32 (New York symbol TXN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.4 billion; Market cap: $44.8 billion; WSSF Rating: Average) is more versatile than Intel or Nvidia. That’s because it makes chips for a wider variety of electronic devices, including mobile phones, digital cameras and DVD players. It has over 50,000 customers, although mobile phone maker Nokia Corp. accounts for about 15% of its total revenue. Strong competition in the chip industry continues to drive down prices. To help keep its profit margins high, Texas Instruments is now working on ways to cut its manufacturing costs. For example, it now outsources about half of its advanced digital chip manufacturing to outside firms. Texas Instruments feels these moves, plus closing older plants, will save it $200 million a year. Texas Instruments earned $0.52 a share (total $758 million) in the third quarter of 2007, up 15.6% from $0.45 a share ($686 million) a year earlier....

NVIDIA CORP. $38 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 548.8 million; Market cap; $20.9 billion; WSSF Rating: Average) is the most specialized of these three chipmakers. It develops 3D graphics chips and related technology for computers, gaming consoles and other electronic devices. The company focuses on design, and outsources production to other chipmakers. Nvidia’s stock has nearly doubled in the past six months, despite concerns over the recent acquisition of chief rival ATI Technologies by Advanced Micro Devices (AMD). Although AMD-powered computers will probably only use ATI graphic chips in the future, Nvidia is doing a good job expanding into new fields such as graphics chips for cellphones and handheld video game players. Nvidia now has roughly 33% of the graphics market, up from 20% a year earlier....

INTEL CORP. $26 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.8 billion; Market cap: $150.8 billion; WSSF Rating: Above average) is the world’s largest maker of electronic chips. Microprocessors for personal computers and servers account for two-thirds of its revenues. Intel ran into trouble a few years ago as new chips from its main competitor, Advanced Micro Devices Inc. (AMD), cut into its market share. But Intel has done a good job cutting costs, which will help it survive future price wars with AMD. The company has also shifted its research focus, from raw chip speed to chips that use less energy and run cooler. In the high-margin server market, AMD recently started selling its new “Barcelona” chip, which has four processors (quad-core) compared with just two on competing Intel chips. Multi-core chips let computers perform several tasks simultaneously....

THE BOEING CO. $94 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 777.2 million; Market cap: $73.1 billion; WSSF Rating: Above average) is the world’s second-largest maker of commercial aircraft, behind Europe’s Airbus. This business accounts for 50% of its revenue and 60% of its profits. Boeing’s other main business is its defense and space operations, which make advanced military fighters and helicopters, missiles and communication satellites. Sales to the U.S. Defense Department account for roughly 85% of this division’s revenue. The stock fell below $25 in 2003, as 9/11 and the Iraq war cut air travel volumes plus demand for new aircraft. At that time, Boeing decided to go ahead with a new plane called the 787 Dreamliner....

SNC-LAVALIN GROUP INC. $49 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $7.4 billion; SI Rating: Average) designs and builds a variety of large-scale projects, such as roads, bridges and electrical power systems. The company also has a long history of building conventional and heavy oil processing plants, as well as systems to produce difficult-to-extract heavy oil. Petroleum and chemical processing account for about 20% of SNC’s total revenue. Oil sands operators currently use natural gas to generate the steam needed to pump heavy oil to the surface. Gas accounts for up to 60% of a well’s operating costs, so many project operators are looking into alternative forms of energy such as nuclear power. SNC has plenty of experience building nuclear power stations, so it would likely participate in any future construction. SNC’s stock has gained about 80% in the past year to a new high of $49. But at 45.0 times its projected 2007 profit of $1.09 a share, it’s expensive in relation to its immediate prospects. The $0.36 dividend yields 0.7%....

FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 179.6 million; Market cap: $5.7 billion; SI Rating: Above average) sells and rents Caterpillar brand tractors, bulldozers and trucks. The company continues to win new contracts from oil sands developers. It recently received a $100 million order for 19 trucks. Due to a huge backlog, it will take Finning about two years to deliver these vehicles. Most new contracts like this also cover replacement parts and maintenance services. That should provide Finning with steady revenues for years after it delivers this equipment. The stock trades at 20.4 times its likely 2007 earnings of $1.57 a share, and the $0.36 dividend yields 1.1%. Finning’s high exposure to volatile commodity prices increases its risk. But we feel this boom could last several more years due to spreading industrialization in Asia....

DUNDEE CORP. $23 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 75.4 million; Market cap: $1.7 billion; SI Rating: Average) is reorganizing its operations, and selling certain assets. Dundee is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. Dundee’s main subsidiary is 56.3%-owned DundeeWealth Inc., which offers wealth management services and owns the Dynamic family of mutual funds. In September 2006, Dundee- Wealth launched Dundee Bank of Canada, a Schedule I Chartered Bank. DundeeWealth has now agreed to sell Dundee Bank to Bank of Nova Scotia for $260 million. Scotiabank has also purchased new shares of DundeeWealth for $348 million. That gives Scotiabank an 18% stake....

HART STORES INC. $4.00 (Toronto symbol HIS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 13.6 million; Market cap: $54.4 million; SI Rating: Speculative) operates 76 midsized department stores, mainly in Eastern Canada. Hart prefers to focus on smaller cities that larger department stores tend to avoid. In the past two years, the company has focused most of its expansion efforts on Ontario, where it now has 11 stores. Thanks to three new stores, Hart’s sales in its second fiscal quarter ended August 4, 2007 rose 4.3%, to $41.1 million from $39.4 million a year earlier. Same-store sales grew just 0.1%. Earnings rose 14.3%, to $0.16 a share from $0.14....

TRANSCONTINENTAL INC. $21 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; 84.5 million; Market cap: $1.8 billion; SI Rating: Average) is the largest commercial printer in Canada, and the sixth-largest in North America. It’s also a leading publisher of community newspapers and magazines, and provides direct marketing services. In August 2007, Transcontinental agreed to pay $103.3 million for PLM Group Ltd., Canada’s fourth-largest commercial printer. PLM’s four facilities near Toronto specialize in direct marketing catalogs and flyers. Demand for direct marketing services like PLM’s is growing strongly, particularly as new “Do Not Call” rules could make it harder to contact potential customers through telemarketing....

THE WESTAIM CORP. $0.37 (Toronto symbol WED; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 94.1 million; Market cap: $34.8 million; SI Rating: Speculative) has two main subsidiaries: wholly owned iFire Technologies Corp. is developing a new, cheaper way to make flat-panel displays; 74.8%-owned Nucryst Pharmaceuticals Corp. (Toronto symbol NCS) makes medical products that prevent infection in burns and wounds. Based on current prices, Nucryst now accounts for $0.36 per Westaim share. Westaim was the technology development subsidiary of fertilizer producer Viridian Inc., a one-time recommendation of ours. In 1996, Viridian handed out its Westaim shares to its own shareholders as a special dividend. In the second quarter of 2007, Westaim’s losses fell to $0.08 a share from $0.13 a year earlier, thanks to a gain on sale of real estate. Revenue fell 4.3%, to $6.7 million from $7.0 million....

ARBOR MEMORIAL SERVICES INC. $30 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.6 million; Market cap: $318.0 million; SI Rating: Average) owns 41 cemeteries, 27 crematoria, three reception centres located on cemetery premises and 93 funeral homes in eight provinces. Arbor gets most of its revenue from advance sales of cemetery plots and memorial services. It holds this cash in trust until it performs a service. Meanwhile, it earns interest income from this cash. Interest income typically accounts for just under 10% of Arbor’s total revenue. In its third fiscal quarter ended July 31, 2007, revenue rose 8.1%, to $57.7 million from $53.4 million a year earlier. Most of the increase came from higher demand for funeral services, as well as value-added services such as receptions and catering. Sales of new cemetery plots rose 7.3%. Earnings in the quarter crept up to $0.40 a share from $0.39....

TORSTAR CORP. $20 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.7 million; Market cap: $1.6 billion; SI Rating: Above average) is a leading Canadian media company. Its main asset is The Toronto Star, the largest daily newspaper in Canada. It also publishes over 160 daily and weekly newspapers in Southern Ontario. Newspapers account for about 70% of Torstar’s total revenue. Torstar’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s largest publisher of romance fiction. Harlequin sells its books in 110 countries. The company’s revenues grew slowly, from $1.42 billion in 2002 to $1.56 billion in 2005, but slipped to $1.53 billion in 2006. Profits fell from $1.62 a share (total $125.3 million) in 2002 to $1.41 a share ($112.7 million) in 2004. Earnings rebounded to $1.52 a share ($118.8 million) in 2005, but restructuring charges cut profit to $1.01 a share ($79.1 million) in 2006....

IVY CANADIAN FUND $30 (CWA Rating: Conservative) invests in high-quality, largecapitalization stocks. The $3.7 billion fund’s top holdings include Shoppers Drug Mart, Imperial Oil, Manulife Financial, Canadian National Railway, Reckitt Benckiser plc, McDonald’s Corp., Thomson Corporation, Diageo plc and PepsiCo. Ivy Canadian’s breakdown by industry is: Consumer staples, 22.3%; Financials, 13.9%; Consumer discretionary, 13.7%; Industrials, 12.4%; and Energy, 8.3%....

IVY EUROPEAN FUND $13.44 (CWA Rating: Aggressive) holds mostly good quality stocks, although it has underperformed the benchmark Morgan Stanley indexes. We don’t see any reason to hold a mutual fund that concentrates in Europe. If you want European exposure, consider Ivy Foreign Equity Fund (see above), or the closed-end European Equity Fund (see box this page). Ivy European Fund is a sell.

IVY ENTERPRISE FUND $4.85 invests in smaller and medium-sized companies. The $201.4 million fund has an MER of 2.42%. The fund’s overall choice of stocks doesn’t inspire our confidence. Its top holdings are Richie Brothers Auctioneers, National Instruments, Resources Connection, Idexx Laboratories, Astral Media, Canadian Western Bank, FirstService Corp., Henry Schein and Stratasys Inc. We think investors can do better by buying some of the other small-cap funds we recommend in Canadian Wealth Advisor....

IVY FOREIGN EQUITY FUND $28.24 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 6.2%, and that was better than the Morgan Stanley benchmark’s gain of 4.6%. Ivy Foreign Equity Fund made 4.4% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets. Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most 10% of the holdings of a conservative investor. The fund’s top 10 holdings are Reckitt Benckiser plc (UK household & healthcare products), Mc- Donald’s Corp., L’Oreal SA (French cosmetics), Shopper’s Drug Mart, Nestle SA, Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), and Diageo plc (UK alcoholic drinks)....

IVY GROWTH AND INCOME FUND $23.41 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund, holding a mixture of stocks, bonds and cash. The fund has returned 6.3% annually for the 10 years. It made 4.1% over the last year. The fund’s MER is 2.14%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Canadian National Railway, Manulife Financial, Imperial Oil, Thomson Corp., McDonald’s Corp., Becton Dickinson (U.S. medical technology), Diageo plc (UK alcoholic beverages) and Reckitt Benckiser plc (UK household & healthcare products). This $3.0 billion fund holds 24% of its assets in bonds. Interest rates on bonds are now under 5% annually in Canada. That’s the total return that a bond can provide, from today until it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, and some of their principal besides....

PENGROWTH ENERGY TRUST $17.85 (Toronto symbol PGF.UN; SI Rating: Average) produces oil and gas in western Canada, as well as offshore Nova Scotia. Pengrowth’s average daily production of 89,633 barrels of oil equivalent is weighted 48% toward oil and liquids and 52% natural gas. In the latest quarter, the company’s average realized price for oil was $71.81 U.S. and $7.61 U.S. for natural gas. In the three months ended June 30, 2007, Pengrowth’s revenue rose 56.6%, to $444 million from $283.5 million, largely due to acquisitions. Cash flow per unit rose 29.1%, to $1.02 from $0.79....

ARC ENERGY TRUST $20.75 (Toronto symbol AET.UN; SI Rating: Speculative) produces oil and gas in western Canada. In the three months ended June 30, 2007, ARC’s revenue fell slightly, to $305.6 million from $306.7 million. Cash flow per unit fell 16.7%, to $0.80 from $0.96. The decline in cash flow came largely from higher production costs. ARC’s average daily production of 61,637 barrels of oil per day equivalent is weighted 52% toward crude oil and 48% natural gas. In the latest quarter, its average realized price for oil was $65.21 U.S., down 9.3% from $71.86 a year earlier. However, natural gas was $7.38 U.S., up 16.2% from $6.35....

H&R REAL ESTATE INVESTMENT TRUST $23.88 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 35 office properties, 114 single-tenant industrial properties and 144 retail properties. Over half are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the U.S. The company now has an industry-leading portfolio occupancy rate of 99.7%. H&R recently acquired a portfolio of 12 refrigerated distribution facilities in six provinces for $215 million. The cold storage properties are leased for an average term of 19.3 years to a major Icelandic client. Revenue in the three months ended June 30, 2007 was $152.3 million, up 12.1% from $135.8 million a year earlier. Cash flow per unit was unchanged at $0.47. H&R’s units now pay $0.1142 per month for a yield of 5.7%....

CANADIAN REIT $30.23 (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. CREIT’s revenue in the three months ended June 30, 2007 was $70.9 million, up 8.5% from $65.3 million a year earlier. Cash flow per unit rose 8.8%, to $0.53 from $0.49. The units now yield 4.4%. 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....