asset management

TD CANADIAN EQUITY FUND $32.66 (CWA Rating: Conservative) (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) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies with strong growth potential. TD Canadian Equity Fund’s 10 largest holdings are EnCana, Canadian Natural Resources, Suncor Energy, Research in Motion, TD Bank, Potash Corp., Bank of Nova Scotia, Freeport McMoran, Canadian Pacific Railway and Sun Life Financial. The $3.3 billion fund currently holds about 54.8% of its portfolio in Resources shares. It also has a bias towards Financial services stocks at 18.1%....

The performance of these five large funds run by each of Canada’s big-five banks has differed widely. That’s because they typically have high weightings in certain sectors — most recently Financial services and Resources stocks. Some, like TD Canadian Equity have benefited from a focus on Resources. Others, like CIBC Canadian Equity were hurt by a concentration in Finance shares. We still feel that the best way to profit in the stock market is to stick with high-quality, well-established companies, and to diversify among the five sectors, and within each sector. However, you won’t go too far wrong with these five funds. They stick with high-quality issues with sound fundamentals, so their concentrations in certain sectors don’t add a lot of risk over the long term. Each has its quirks, but overall they are well positioned for low-risk returns....

TD SCIENCE & TECHNOLOGY FUND $13.49 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W1P9. 1-800-386-375 7; 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, IBM, Corning Inc., Nintendo Co., Oracle Corp., Samsung Electronics, Nokia, Intel and Apple Inc. The fund’s loss in Canadian dollars over the last year was 15.8%. The Nasdaq index lost 16.1% in Canadian funds. The $90.5 million fund’s manager is well-respected U.S. mutual fund manager T. Rowe Price Associates. Its MER is 2.70%....

Many tech stocks are down from the highs they reached late last year. That’s when the Nasdaq composite index reached 2,862, its highest level since early 2001. Consumer spending for computers and electronics in the United States has slowed, along with overall lower consumer confidence, due in part to higher gasoline prices and volatile housing markets. Many U.S. corporations are also slowing spending on information technology until the economy recovers. However, many U.S. technology companies continue to expand sales in international markets, and the high value of foreign currencies against the U.S. dollar is boosting foreign profit contributions....

ALGONQUIN POWER INCOME FUND $7.68 (Toronto symbol APF.UN; SI Rating: Extra Risk) now has direct or indirect interests in 47 hydroelectric facilities — 4 in Ontario, 12 in Quebec, 13 in New York State, 9 in New England, 1 in Alberta, 1 in New Jersey and 1 in Newfoundland. This represents total generating capacity of 140 megawatts. Algonquin also has interests in 5 natural gas-fired generating plants, a 99-megawatt wind plant, one energy-from-waste plant and two biomass facilities in Canada and the U.S., and 17 water distribution and wastewater treatment facilities in the U.S. In the three months ended December 31, 2007, revenues fell 14.8%, to $44.3 million from $52 million a year earlier. The decrease came from lower-than-average rainfall, a lower U.S. dollar and a closure for upgrading at the company’s Sanger plant in California. However, cash flow per unit rose 13%, to $0.26 from $0.23. Algonquin Power currently yields 12.0%....

NEW GERMANY FUND $15.92 (New York symbol GF; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in middle-market (small and mid-cap) German equities. The fund’s manager is Deutsche Asset Management. The $451 million fund’s 50 holdings are currently in Germany (93%) and the Netherlands (6%). The New Germany Fund’s focus on mid-tier German stocks provides investors with access to some of Germany’s fastest-growing companies. The New Germany Fund’s top holdings are K+S (chemicals), 6.9%; Fresenius (health care equipment & supplies), 5.6%; Q-Cells (solar cell manufacturing), 5.3%; European Aeronautical Defense (Dutchbased aerospace and defense), 4.7%; SGL Carbon (electrical equipment), 3.8%; GEA Group (chemicals), 3.7%; Solarworld (solar power manufacturing), 3.4%; IVG Immobilien (real estate), 3.2%; United Internet (Internet service provider), 3.1%; and Software (software), 3.0%....

CENTRAL EUROPE AND RUSSIA FUND $48.14 (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 $880.2 million fund’s 60 holdings are currently invested in Russia (55%), Poland (17%), Turkey (11%), Czech Republic (6%), Hungary (5%), Austria (2%) and Bermuda (1%). Central Europe and Russia Fund’s top holdings are Gazprom (a Russian gas utility) at 14.9%; Lukoil (Russian oil and gas), 6.3%; Norilsk Nickel (Russian metals and mining), 5.6%; Rosneft Oil Company (Russian oil and gas), 5.0%; Powszechna Kasa Oszczednosci (Polish bank), 4.6%; Sberbank (Russian bank), 4.6%; Bank Pekao (Polish bank), 3.6%; Telekomunikacja Polska (Polish telecom), 3.6%; and Turkiye Garanti Bankasa (Turkish bank), 2.8%....

Investing in regions or countries outside of Canada and the United States can entail above-average volatility and risk. But these areas can also offer vast potential growth. We still think that for most investors, the best way to invest in those regions or countries is through mutual funds, rather than individual stocks. And you can cut your costs by buying closed-end funds. Here are four closed-end funds trading on the New York Exchange at discounts to their net asset value. All four are buys....

YAMANA GOLD $15.35, symbol YRI on Toronto, reports that earnings excluding one-time items were $0.06 a share in the three months ended December 31, 2007, compared to nil per share a year earlier. (All figures except share price in U.S. dollars.) Cash flow per share rose to $0.07 from $0.01. Revenues more than tripled to $218.6 million from $60 million. Earnings rose even though operating costs were higher and the Brazilian real rose 20% against the U.S. dollar. Most of Yamana’s costs are in Brazil, while the metal it sells is priced in U.S. dollars. Lower copper prices also hurt profits. Despite the higher profits, the stock fell because its earnings failed to meet consensus expectations. However, Yamana’s recent acquisition of Meridian and Northern Orion, plus earlier acquisitions, will give it an estimated 1.3 million ounces of gold production in 2008, and up to 2.2 million ounces by 2012. The company could generate more than $2 billion in cash flow annually by 2010....

INDIA FUND $51.75 (New York symbol IFN; CWA Rating: Aggressive) invests mainly in large capitalization Indian stocks. The manager of the fund is the Blackstone Group. India Fund dropped recently from an all-time high of $71.54 along with turmoil in global stock markets. But the Indian economy is still strong, and inflation and interest rates remain low. The Indian government encourages foreign investment, and has boosted infrastructure spending and rural development, and cut taxes. India will likely report growth in its economy of 8.5% in 2007. Growth in 2008 is forecast at 10%....