enbridge

Claymore 1‐5 Yr Laddered Corporate Bond ETF, $20.31, symbol CBO on Toronto (Shares outstanding: 400,000; Market cap: $8.1 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF is a recent new issue which first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. It has a 0.75% annual management fee and pays a $0.0715 quarterly distribution, which yields 1.6% on a yearly basis. The fund’s 25 holdings are divided into five staggered, or “laddered,” equally weighted maturities that range from one to five years. Each maturity includes five or more bonds with a minimum credit rating of “A”. Each year, the longest-term bonds will reach maturity, and the shorter-term bonds will be a year older. The fund can use proceeds of the matured bonds to buy new bonds that restore the desired portfolio balance....

EPCOR POWER, L.P. $13.80 (Toronto symbol EP.UN; Shares outstanding: 53.9 million; Market cap: $743.8 million; SI Rating: Extra Risk) has interests in 26 power plants in Canada and the U.S. In total, the plants generate 1,502 megawatts. In the three months ended December 31, 2008, EPCOR’s revenue fell 9%, to $103.8 million from $114.1 million. The decline came mostly from currency-related factors. Cash flow per unit fell 6.3%, to $0.59 from $0.63, mainly because of higher operating costs at some plants. EPCOR pays a quarterly distribution of $0.63 per unit, for a yield of 18.3%. The company paid out 107% of its cash flow in the latest quarter. The high level came largely from unusually high maintenance costs. That spending has now slowed, but the payout ratio could still be as high as 102% this year. That makes a distribution cut a possibility. However, the trust has room to cut while maintaining a high yield....

PEMBINA PIPELINE INCOME FUND $15.15 (Toronto symbol PIF.UN; Shares outstanding: 133.6 million; Market cap: $2.0 billion; SI Rating: Extra risk) has interests in 14 feeder pipeline systems with a total length of 8,350 kilometres. This network is the largest feeder operation in Canada. These pipelines bring oil and gas from fields in northeastern B.C. and western and northern Alberta to refineries, or feed into major pipelines such as the Enbridge Pipeline System. The fund’s network includes the Pembina System, which has been in operation since 1954. It also holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. In the three months ended September 30, 2008, Pembina’s cash flow per unit rose 2.6%, to $0.39 from $0.38. The fund pays a monthly distribution of $0.13. Pembina’s units now yield 10.3%. The fund flows about 90% of its cash flow through to its unitholders....

BMO DIVIDEND FUND $34.97 (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 35.1% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 21.1%. The $3.7 billion BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank, Shoppers Drug Mart, TD Bank, TransCanada Corp., EnCana, Enbridge and Shaw Communications. The fund’s MER is 1.71%. Over the five years to November 30, 2008, the fund posted a 4.6% annual rate of return. The S&P/TSX gained 5.7% annually, but that was largely due to the big run up in resources prices that lasted until early in 2008. The S&P/TSX index holds a high 40% or so of its holdings in Resources stocks....

FORT CHICAGO ENERGY TRUST $8.68 (Toronto symbol FCE.UN; Shares outstanding: 134.1 million; Market cap: $1.2 billion; SI Rating: Extra Risk) owns 50% of the Alliance Pipeline, which runs 3,000 kilometres from Fort St. John, B.C., to Chicago. Enbridge Inc. owns the other 50% interest. The two partners also own 85.4% of the Aux Sable natural gas liquids plant. As well, Fort Chicago owns the 1,324-kilometre Alberta Ethane Gathering System. Fort Chicago has added to its power-plant interests over the last couple of years. It now owns natural gas-fired cogeneration facilities in Ontario and California, plus power generation systems in Ontario and Prince Edward Island. It recently bought the Brush II Cogeneration plant in Colorado for $32 million U.S. In the three months ended June 30, 2008, Fort Chicago’s revenue rose 31.4%, to $178.7 million from $135.9 million a year earlier. The higher revenue mainly resulted from Fort Chicago’s purchase of Countryside Canada Power in August 2007. Cash flow per unit rose 3.3% in the quarter, to $0.31 from $0.30....

EPCOR POWER, L.P. $17.41 (Toronto symbol EP.UN; Shares outstanding: 53.9 million; Market cap: $938.3 million; SI Rating: Extra risk) owns 20 power plants in Canada and the U.S. with total generating capacity of 1,464 megawatts. In the three months ended September 30, 2008, revenues fell 10%, to $138 million from $153.4 million. The decline came mostly from currency related factors. Despite the lower revenue, however, cash flow per unit rose 8.5%, to $0.64 from $0.59. EPCOR pays a quarterly distribution of $0.63 per unit. That gives the units a current annual yield of 14.5%. The company paid out 101% of its cash flow in the latest quarter. But that high level came largely from unusually high maintenance expenditures. That spending has now slowed, and the payout ratio should drop below 100%. That should also let EPCOR hold its distributions steady....

IVY CANADIAN FUND $24.81 (CWA Rating: Conservative) invests in high-quality, large capitalization stocks. The $2.6 billion fund’s top holdings include Shoppers Drug Mart, Toronto-Dominion Bank, Manulife Financial, Canadian National Railway, Becton Dickinson & Co., Enbridge, McDonald’s Corp., Thomson Reuters, Imperial Oil and Nestle SA. Ivy Canadian’s breakdown by industry is: Consumer staples, 30.4%; Financials, 18.8%; Consumer discretionary, 13.5%; Energy, 10.9%; Industrials, 9.7%; Health care, 6.7%; and Information technology, 4.7%....

IVY GROWTH AND INCOME FUND $20.21 (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 5.7% annually for the 10 years. It lost 0.8% over the last year. The fund’s MER is 2.09%. The fund’s top stock holdings are Shoppers Drug Mart, Manulife Financial, Enbridge, Canadian National Railway, McDonald’s Corporation, Thomson Reuters Corp., Toronto-Dominion Bank and Imperial Oil. The $2.4 billion Ivy Growth & Income Fund holds 22% 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....

At one time, mutual funds within a particular ‘fund family’ often shared some key investment characteristic, such as a conservative or aggressive investment approach, or a stress on value as opposed to growth. However, due to corporate mergers and takeovers in the mutual-funds industry, and more aggressive marketing, a fund’s membership in a fund family now has little bearing on its investment approach or appeal as an investment. Below, for instance, we analyse five funds from the Ivy Group. (Note that Ivy is now part of Mackenzie Financial, which in turn is part of IGM Financial. The contact information listed for Ivy Growth and Income also applies to the other four.)...

PEMBINA PIPELINE INCOME FUND $18.11 (Toronto symbol PIF.UN; SI Rating: Extra risk) has interests in 14 feeder pipeline systems with a total length of 8,350 kilometres. This network is the largest feeder operation in Canada. These pipelines bring oil and gas from fields in northeastern B.C. and western and northern Alberta to refineries, or feed into major pipelines such as the Enbridge Pipeline System. The fund’s network includes the Pembina System, which has been in operation since 1954. It also holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. In the three months ended June 30, 2008, Pembina’s revenues rose 43.6%, to $181.5 million, from $126.4 million. Cash flow per unit rose 59.4%, to $0.51 from $0.32....