diversification

We haven’t been able to find any water utilities we would recommend for investment. The water business in developed countries is subject to a lot of regulatory hurdles and has limited growth prospects. There may be opportunities in developing nations, many of which desperately need clean water. But investing in these markets can expose you to political risk. We think you should stick with the utility stocks we recommend in our newsletters....

Trinity Industries Inc., $59.29, symbol TRN on New York (Shares outstanding: 78.1 million; Market cap: $4.6 billion; www.trin.net), makes a variety of metal products for many industries. Its five main operating segments are: Rail (railcars and components), Construction Products (highway-safety products, concrete and aggregates like sand, gravel and crushed stone), Inland Barge (barges), Energy Equipment (wind turbines) and Railcar Leasing and Management. In the three months ended September 30, 2013, Trinity’s revenue rose 22.4%, to a record $1.1 billion from $907.3 million a year earlier. Earnings per share also set a record, jumping 57.5%, to $1.26 from $0.80. The higher sales and cost cutting were behind the gain....

CANADIAN REIT $43.32 (Toronto symbol REF.UN; Units outstanding: 68.7 million; Market cap: $3.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.8%; www.creit.ca) owns 194 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain over 19.7 million square feet of leasable area. The trust’s occupancy rate is 94.9%.

In the three months ended September 30, 2013, Canadian REIT’s revenue rose 6.8%, to $94.3 million from $88.3 million a year earlier. Cash flow per unit gained 8.8%, to $0.62 from $0.57.

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ISHARES MSCI EMERGING MARKETS INDEX FUND $39.78 (New York symbol EEM; buy or sell through brokers) is an ETF that aims to track the MSCI Emerging Markets Index.

Its geographic breakdown includes China, 18.3%; South Korea, 16.0%; Taiwan, 11.7%; Brazil, 10.6%; South Africa, 7.4%; India, 6.4%; Russia, 6.2%; Mexico, 5.4%; Malaysia, 3.9%; and Indonesia, 2.2%.

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Our Canadian dollar spent most of the past three years within a few cents of parity with the U.S. dollar. That was an unusual period of calm for our dollar, and of relative strength in relation to the U.S. currency. The last time our dollar stayed that stable, and that close to the value of the U.S. dollar, was in the first half of the 1970s. After that, from 1976 through 2002, our dollar worked its way downward from $1.00 U.S. to a low of $0.63 U.S. From there it turned around and moved up for five years, to a peak of $1.08 U.S. in the final quarter of 2008. After that, the recession hit and our dollar slumped to around $0.76 U.S. By the end of 2009, it was back within a few cents of U.S. dollar parity. It mostly stayed close to parity till the end of last summer. This period of relative calm and strength may be ending. The Canadian dollar moved down more than $0.05 U.S. in the past three months; two cents of that drop occurred last week. Analysts are blaming last week’s drop on a convoluted analysis of the relative strength of U.S. and Canadian economic growth rates, and changing interest rate trends between the two countries....

BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF, $30.38, symbol ZUH on Toronto (Units outstanding: 2.1 million; Market cap: $63.4 million; www.etfs.bmo.com), holds 48 U.S. health care stocks. The fund’s top holdings are Forest Laboratories, 3.0%; Illumina Inc., 2.6%; Actavis plc, 2.5%; Perrigo Company plc, 2.5%; Allergan, 2.4%; HCA Holding, 2.4%; Bristol-Myers Squibb, 2.4%; Thermo Fisher Scientific, 2.4%; St. Jude Medical, 2.3%; and Biogen Idec, 2.3%. The ETF is hedged against movements of the U.S. dollar against the Canadian dollar. Its value rises and falls solely with the stocks in its portfolio, so it wouldn’t give you any diversification through U.S. dollar exposure....

H&R REIT (Toronto symbol HR.UN; www.hr-reit.com) owns stakes in 42 office buildings, 112 industrial properties and 164 shopping malls across Canada. The trust has a 98.2% occupancy rate....

We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus.

The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of highquality stocks.

Here are six international ETFs we like:

ISHARES MSCI JAPAN INDEX FUND $12.04 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.1%; Mitsubishi UFJ Financial, 3.1%; Softbank Corp., 3.0%; Honda Motor, 2.5%; Sumitomo Mitsui Financial, 2.4%; Mizuho Financial Group, 1.8%; Hitachi, 1.4%; Takeda Pharmaceutical, 1.3%; Canon, 1.3%; and Mitsubishi Estate Co., 1.3%.

The fund’s industry breakdown is as follows: Financials, 21.5%; Consumer Discretionary, 20.9%; Industrials, 19.3%; Information Technology, 10.4%; Consumer Staples, 6.3%; Health Care, 6.0%; Materials, 5.9%; Telecommunication Services, 5.8%; Utilities, 2.5%; and Energy, 1.2%.

iShares MSCI Japan Index Fund was launched on March 12, 1996....

H&R REIT $21.22 (Toronto symbol HR.UN; Units outstanding: 269.6 million; Market cap: $5.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.4%; www.hr-reit.com) owns stakes in 42 office buildings, 112 industrial properties and 164 shopping malls across Canada....

SHERRITT INTERNATIONAL CORP., $3.70, symbol S on Toronto, has announced that it plans to sell all of its coal interests. A group led by Altius Minerals (symbol ALS on Toronto) will buy Sherritt’s development-stage coal projects and mining royalties for cash of $481 million. In addition, Westmoreland Coal (symbol WLB on Nasdaq) will purchase Sherritt’s operating coal mines for cash of $312 million. Westmoreland will also assume $153 million of equipment lease obligations. These sales will let Sherritt focus on its nickel, cobalt and oil interests and pay down some of its $2.1-billion debt....