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CANWEL BUILDING MATERIALS INCOME FUND $3.76 (Toronto symbol CWX.UN; SI Rating: Speculative) is a Canadian national wholesale distributor of hardware, building materials and home renovation products. CanWel has struggled to meet its distributions despite buoyant housing and building markets....

GENERAL DONLEE INCOME FUND $4.90 (Toronto symbol GDI.UN; SI Rating: Speculative) makes precision-machined products for the military, commercial and general aerospace industries. The fund yields 13.5%. General Donlee is looking at several “strategic options” to boost value, including a restructuring or the sale of the entire fund....

ATLAS COLD STORAGE INCOME FUND $6.26 (Toronto symbol FZR.UN; SI Rating: Speculative) provides temperature-controlled storage and logistics services to processors, distributors, food service providers and retailers across North America. Growing losses forced Atlas to halt distributions in 2003....

NORANDA INCOME FUND $11.85 (Toronto symbol NIF.UN; SI Rating: Speculative) operates the CEZ processing facility in Salaberry-de-Valleyfield, Quebec. The fund currently yields 8.6%. The fund’s exposure to zinc prices and its lack of geographic diversification add to its risk....

ENERGY SAVINGS INCOME FUND $18.40 (Toronto symbol SIF.UN; SI Rating: Average) operates in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois, and New York, selling natural gas to residential, small to mid-sized commercial, and small industrial customers under long-term, irrevocable fixed-price contracts....

WESTSHORE TERMINAL INCOME FUND $10.60 (Toronto symbol WTE.UN; SI Rating: Speculative) operates a coal storage and loading terminal at Roberts Bank, B.C. The trust yields 10.2%. Coal shipped from the mines owned by the Elk Valley Coal Partnership accounts for 90% of Westshore’s revenues....

CONSUMERS’ WATERHEATER INCOME FUND $13.62 (Toronto symbol CWI.UN; SI Rating: Speculative) owns a portfolio of approximately 1.3 million installed water heaters, rented primarily to residential customers in Ontario. The units currently yield 8.7%. A lot of the fund’s growth comes from installations in newly built homes....

ROGERS SUGAR INCOME FUND $4.15 (Toronto symbol RSI.UN; SI Rating: Speculative) is the leading refiner, processor, distributor and marketer of sugar products in western Canada. The fund has a current yield of 9.7%. Rogers Sugar is vulnerable to weather conditions affecting sugar beet production and prices....

THE DUN & BRADSTREET CORP. $68 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) provides credit reports and other information on over 100 million companies in 200 countries. These reports help lenders and purchasers make better business decisions, which cuts their risk. Dun & Bradstreet’s earnings have grown at 17% compounded yearly over the past five years, compared to 26.5% for Moody’s. Consequently, its stock trades at a lower p/e— 17.4 times its 2006 profit estimate of $3.90 a share. However, we feel Dun & Bradstreet has great long-term growth potential as world trade grows....

MOODY’S CORP. $53 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) provides credit ratings on bonds and other securities issued by roughly 200,000 commercial and government entities in over 100 countries. The company has about 40% of the global credit rating market. It also sells credit risk management software to financial institutions. Moody’s stock has dropped roughly 25% in the past three months. Investors fear that rising interest rates will cut interest in new debt securities, particularly those related to the home mortgage industry. It now trades at 26.0 times its forecasted 2006 earnings of $2.08 a share. The $0.28 dividend yields 0.5%. The company is currently one of five companies designated by the SEC to provide credit ratings on new securities. Issuers can speed up the registration process if they have a credit rating above a certain level....

MCGRAW-HILL COMPANIES INC. $49 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Average) is a leading publisher of school textbooks. It also publishes BusinessWeek magazine and several trade journals, and owns four TV stations. However, it gets roughly two-thirds of its profits from its Standard & Poor’s subsidiary, which provides credit ratings and opinions on a variety of investments. Institutional investors rely on these ratings to select investments. The stock rose from $44 in July 2005 to $60 in March 2006, but has moved down recently on fears that weakness in global stock markets will hurt Standard & Poor’s revenue growth. Fears of lower advertising revenue at its magazine and TV business have also weighed on the stock....

DOW JONES & CO. $34 (New York symbol DJ; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) publishes The Wall Street Journal and Barron’s magazine. It also owns several smaller publications, and provides newswire and specialized information services. The company has suffered in this decade, like all publishers, from fiercer competition for ads. Its profits have stagnated in the past five years, although sales have risen from $1.56 billion in 2002 to a likely level of $1.9 billion or so this year. The stock now trades at 30.9 times its forecast 2006 profit of $1.10 a share. The $1.00 dividend yields 2.9%. Dow Jones is doing a good job of controlling its costs, which gives it more cash to expand faster- growing businesses such as Internet sites. Its latest restructuring plan should save it $15 million a year, mainly by streamlining management and outsourcing more administrative functions....

YUM! BRANDS INC. $49 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) operates around 32,000 fast food restaurants in over 100 countries. That’s more outlets than McDonald’s (see box on page 62), although McDonald’s generates higher annual sales. The company owns about 25% of these restaurants, and franchisees own the rest. It aims to sell more of its U.S. outlets to franchisees in the next few years, which would cut its overall risk. Yum prefers to own stores in developing countries, however, at least until local managers learn the business. Yum gets most of its sales and profits from three main banners: KFC (chicken); Pizza Hut; and Taco Bell (Mexican food). It also operates the smaller A&W (hamburgers) and Long John Silver’s (seafood) chains....

AGRIUM INC. $26 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is a leading supplier of fertilizers and agricultural chemicals. The company uses natural gas to make its nitrogen-based fertilizers, which account for roughly 40% of its revenue and profits. Agrium also makes fertilizers from potash and phosphate, which come primarily from mines it operates in Western Canada. The ongoing resources boom should eventually spread to the agriculture industry, and spur fertilizer demand and Agrium’s profits....

SHAWCOR LTD. $17 (Toronto symbol SCL.A (old symbol SCL.SV.A); Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) makes sealants that protect oil pipelines from corrosion. Thanks to rising energy prices, ShawCor’s earnings from continuing operations in the first quarter of 2006 rose 32.0%, to $0.33 a share from $0.25. Revenue rose 6.1%, to $257.7 million from $242.9 million. The company recently completed a major contract to coat an underwater pipeline in the North Sea. But the company’s growing reputation is helping it win new contracts, particularly in Asia....

CANADIAN PACIFIC RAILWAY LTD. $55 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) also profits from the resources boom, since products such as coal, fertilizers and forest products account for a third of its freight revenue. The company is vulnerable to higher fuel prices, but so are its competitors, and it can pass much of the extra cost along to its customers. Recent investments in new locomotives and track have improved its fuel-efficiency by 5.6% in the past five years. Greater fuel efficiency also gives CP an advantage over trucking firms....

FINNING INTERNATIONAL INC. $38 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) profits from rising oil and mineral prices, since it sells, rents and services Caterpillar brand heavy equipment to energy exploration and mining companies. Finning earned $0.63 a share (total $56.9 million) in the first quarter of 2006, up 50% from $0.42 a share ($37.4 million) a year earlier. If you exclude gains on the sale of assets, it would have earned $0.53 a share in the most recent quarter, up 26.2%. Revenue rose 7.8%, to $1.24 billion from $1.15 billion. Finning gets half its revenues from its UK and South American operations, and the rising Canadian dollar cut its revenue growth in the quarter by $88 million....

TORSTAR CORP. $21 (Toronto symbol TS.B (old symbol TS.NV.B); Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is one of Canada’s top media companies. It’s best known as the publisher of The Toronto Star, the largest daily newspaper in Canada. It also publishes over 150 daily and weekly newspapers in Southern Ontario. Newspapers account for roughly two-thirds of the company’s revenue, and around 55% of its profit. The rest comes from wholly owned Harlequin Enterprises Ltd., the world’s largest publisher of romance fiction titles. Torstar’s revenue grew slowly, from $1.42 billion in 2001 to $1.57 billion in 2005. These figures exclude revenue from discontinued businesses. In 2001, the company earned just $0.04 a share (total $3.0 million), mainly due to unusual items. Income in 2002 rose to $1.64 a share (total $125.3 million), but slipped to $1.59 a share ($123.5 million) in 2003. Restructuring costs cut Torstar’s 2004 profit to $1.42 a share ($112.7 million). In 2005, earnings improved to $1.52 a share ($118.8 million)....

IVY CANADIAN FUND $29.46 (CWA Rating: Conservative) invests in high-quality, largecapitalization stocks. The $4.8 billion fund’s top holdings include Shoppers Drug Mart, Yellow Pages Income Fund, Manulife Financial, Danaher Corp., Reckitt Benckister plc, Bank of Nova Scotia, Canadian National Railway, Loblaw, Imperial Oil and Omnicom Group. Ivy Canadian’s breakdown by industry is: Consumer staples, 26.9%; Financials, 21.6%; Consumer discretionary, 12.8%; Industrials, 12.7%; and Energy, 6.6%. Ivy Canadian made 8.4% annually over the last 10 years, compared to the S&P/TSX’s gain of 10.9%. The fund’s MER is 2.44%. It holds a high cash level of 9%....

IVY EUROPEAN FUND $11.72 (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, or the closed-end European Equity Fund....

IVY ENTERPRISE FUND $4.55 invests in smaller and medium-sized companies. The $240.5 million fund has an MER of 2.46%. The fund’s overall choice of stocks doesn’t inspire our confidence. Its top holdings are RONA Inc., Winpak, Richie Brothers Auctioneers, National Instruments, Canadian Western Bank, Saxon Financial, Brown & Brown, Henry Schein and Robert Half International. We think investors can do better by buying some of the other small-cap funds we recommend in Canadian Wealth Advisor. Ivy Enterprise Fund is a sell.

IVY FOREIGN EQUITY FUND $26.03 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 8.0%, and that was better than the Morgan Stanley benchmark’s gain of 5.7%. Ivy Foreign Equity Fund made 5.1% 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 perhaps 10% of the holdings of a conservative investor. The fund’s top 10 holdings are Reckitt Benckister plc (UK household & healthcare products), Brown & Brown (U.S. insurance), Danaher Corp. (U.S. control products and tools), Essilor International SA (corrective eyewear), Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), Omnicom (U.S. media services), Diageo plc (UK alcoholic drinks) and Ecolab Inc. (U.S. maintenance & cleaning products)....

IVY GROWTH AND INCOME FUND $23.18 (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 performed well, returning 8.3% annually for the 10 years. It made 4.4% over the last year. The fund’s MER is 2.17%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Omnicom Group (U.S. media services), Bank of Nova Scotia, Danaher Corp. (U.S. control products and tools), Reckitt Benckiser plc (UK household & healthcare products), Yellow Pages Income Fund, Manulife Financial and CN Railway. This $3.7 billion fund holds 19% 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....

TD SCIENCE & TECHNOLOGY FUND $12.96 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W1P9. 1-800-461-38 63; Web site: www.tdcanadatrust.com. No load — deal directly with the company) invests mostly in U.S. firms engaged in the research, development, production or distribution of products or services related to science and technology. The fund’s gain over the last year was 12.2%. The Nasdaq index rose 7.7%. The $145.8 million fund’s manager is well-respected U.S. mutual fund manager T. Rowe Price Associates. Its MER is 2.79% TD Science & Technology’s top holdings include: Microsoft, 7.1%; Samsung Electronics, 4.7%; Nokia, 3.1%; Juniper Networks, 2.3%; Yahoo!, 2.3%; Red Hat, 2.1%; Taiwan Semiconductor, 2.1%; Cisco Systems, 2%; CDNetworks, 2%; and Analog Devices, 2%....

ALTAMIRA SCIENCE & TECHNOLOGY FUND $7.12 (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. The $66.8 million fund gained 4.5% over the last year, compared to the Nasdaq’s gain of 7.7%. Its MER is 2.68%. Top holdings include: Microsoft, 6.5%; eBay, 4.8%; Cisco, 4.6%; Research In Motion, 3.5%; Apple Computer, 3.1%; Charles River Labs, 3.1%; Satyam Computer Services, 3%; Accenture, 2.8%; PDL BioPharma 2.7%; and St. Jude Medical, 2.6%....