asset management

Sector or ‘theme’ funds entail special risks, but they are much safer than investing in one or two issues in risky fields, such as health care and biotechnology. If you invest in sector funds, limit your investment to modest quantities. Above all, invest only in funds with proven management and high-quality holdings. Here are updates on two we like: RENAISSANCE GLOBAL HEALTH CARE FUND $15.89 (CWA Rating: Speculative) (CIBC Asset Management, 1500 University Street, Suite 800, Montreal, PQ. H3A 3S6. 1-800-268-8258; Web site: www.talvest.com. Available from brokers) is the new name of the Talvest Global Health Care Fund. The fund invests in global companies in a variety of segments of the health-care industry. Top holdings include Schering-Plough Corp., McKesson Corp., Cardinal Health, Sanofi-Synthelbo, Takeda Chemical Industries, Eisai Co. Ltd., Forest Laboratories, Medtronic, Daiichi Sankyo and Eli Lilly. Talvest Global Health Care lost 3.5% over the last year. The $954.6 million fund’s MER is 3.16%....

NEW GERMANY FUND $18.50 (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 $486 million fund’s 56 holdings are currently in Germany (94%), the Netherlands (4%) and Ireland (2%). The New Germany Fund’s focus on mid-tier German stocks provides investors access to some of Germany’s fastest-growing companies The New Germany Fund’s top holdings are Saltzgitter (metals and mining) at 4.8%; Fresenius (health care equipment), 4.6%; K+S (chemicals), 4.3%; GEA Group (chemicals), 3.6%; Software (software), 3.3%; Bilfinger Berger (construction and engineering), 3.2%; European Aeronautical Defense (Dutch-based aerospace and defense), 3.2%; SGL Carbon (electrical equipment), 3.1%; Rheinmetall (industrial conglomerate), 2.9%; and Celesio (healthcare providers and services), 2.9%....

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%....

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 invest even cheaper 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....

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%....

Many tech stocks have moved up lately, and the Nasdaq composite index is now at 2,859, its highest level since early 2001. Consumer spending for computers and electronics in the United States remains steady despite overall lower consumer confidence, due in part to higher gasoline prices and volatile housing markets. Spending by corporations for information technology products and services continues to rise steadily, along with the U.S. economy. The recent launch of Microsoft’s Window’s Vista operating system will likely prompt many businesses and consumers to upgrade to new computers and software designed to run on the new platform....

TD RESOURCE FUND $32.74 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-836-3757; Web ite:www.tdcanadatrust.ca. No load — deal directly with the bank) invests in companies with superior asset bases, proven management and the ability to internally finance growth. The $260.2 million TD Resource Fund’s top holdings are mostly of ‘Average’ quality or higher. The fund’s holdings include Suncor Energy, Alcan, EnCana, Talisman Energy, Goldcorp, Denison Mines, Petro-Canada, Nexen, Alcoa, BHP Billiton and Lundin Mining. The fund’s industry breakdown is: Basic materials, 51.2%; and Energy, 46.1%. Its MER is 2.23%. Over the past year the fund has made 24.2%. The fund’s five-year average is 26.1% annually. TD Resource Fund is a buy....

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%....

BMO Dividend and RBC Canadian Dividend hold mostly high-quality stocks. These stocks sometimes run into trouble and go through lengthy struggles, just like lesser investments. Eventually, though, most solve their problems and go on to thrive anew. Both funds hold a high proportion of their assets in financial services stocks. However, if you must focus on something, finance is a relatively stable sector. If you do invest in these funds, be sure to adjust the rest of your portfolio so these funds won’t overly concentrate your holdings in the financial sector....

AMERIPRISE FINANCIAL INC. $61 (New York symbol AMP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 235.3 million; Market cap: $14.4 billion; WSSF Rating: Average) provides brokerage, mutual funds and wealth management services to individuals and institutions through over 12,000 advisors. The stock has gained over 60% since its spin-off from American Express, as the strong performance of the stock market in the past two years has boosted assets under management. Ameriprise now trades at 15.6 times the $3.90 a share it’s forecast to make in 2007. The $0.60 dividend yields 1.0%. Ameriprise now aims to focus more on its asset management businesses. That should increase its fee-based income, which provides it with a steady stream of recurring revenues....