enbridge

BMO DIVIDEND FUND $44.99 (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 36.3% of its portfolio in the Financial services industry. Its next-largest holdings are Energy at 24.4% and Consumer discretionary at 9.1%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Power Financial Corporation, Toronto-Dominion Bank, TransCanada Corporation, Imperial Oil, Suncor Energy, EnCana Corporation, Enbridge Inc., Husky Energy and Sun Life Financial. Over the last five years, the $5.2 billion BMO Dividend Fund has posted a 12.1% annual rate of return. That’s under the S&P/TSX’s gain of 18.2%. 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 lost 5.6% over the last year, compared to a gain of 6.8% for the S&P/TSX index. BMO Dividend’s MER is 1.71%....

BMO Dividend and RBC Canadian Dividend hold mostly high-quality stocks. Even high-quality 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, at least in Canada. 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....

SHAWCOR LTD. $34 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.9 million; Market cap: $2.4 billion; SI Rating: Average) makes sealants and coatings that protect onshore and offshore oil and natural gas pipelines from corrosion. The company also inspects and repairs pipelines. These operations account for about 85% of ShawCor’s total revenue. The remaining 15% comes from making industrial equipment such as electrical wire and protective sheaths. The Shaw family controls 89.4% of the company’s class ‘B’ multiple voting shares.

Energy boom spurs ShawCor’s stock

ShawCor’s stock has more than doubled for us in the past five years, largely due to rising energy prices. That in turn has led to a big jump in new pipeline construction. Consequently, ShawCor’s revenue rose from $699.3 million in 2003 to $1.06 billion in 2006. However, customers outside of Canada account for about 75% of ShawCor’s sales. The high Canadian dollar cut its revenue to $1.05 billion in 2007....

FORT CHICAGO ENERGY TRUST $10.89 (Toronto symbol FCE.UN; SI Rating: Extra Risk) owns 50% of the Alliance Pipeline, a 36-inch diameter natural gas pipeline. It extends 3,000 kilometres from Fort St. John in B.C. to Chicago, Illinois. Enbridge Inc. owns the other 50% interest. The other assets held by the two partners are 85.4% of the Aux Sable natural gas liquids plant. Fort Chicago also owns the 1,324-kilometre Alberta Ethane Gathering System. Through recently acquired Countryside Power, Fort Chicago now also owns and operates energy systems in Charlottetown, PEI, and London, Ontario, plus two gas-fired cogeneration plants in California. In the three months ended December 31, 2007, Fort Chicago’s revenues rose 25.7%, to $173.3 million from $137.8 million a year earlier. Cash flow per unit rose 34.4% in the quarter, to $0.43 from $0.32....

IVY CANADIAN FUND $26.71 (CWA Rating: Conservative) invests in high-quality, large capitalization stocks. The $3.0 billion fund’s top holdings include Shoppers Drug Mart, TD Bank, Manulife Financial, Canadian National Railway, Becton Dickinson & Co., Enbridge, McDonald’s Corp., Thomson Corporation, Diageo plc and Walgreen Co. Ivy Canadian’s breakdown by industry is: Consumer staples, 29.3%; Financials, 17.5%; Consumer discretionary, 15.2%; Industrials, 11.7%; Health care, 6.6%; Energy, 5.6%; Information technology, 4.0%; and Utilities, 4.0%....

IVY GROWTH AND INCOME FUND $21.37 (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 5.6% annually for the 10 years. It lost 6.6% over the last year. The fund’s MER is 2.10%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Manulife Financial, Enbridge, Thomson Corp., McDonald’s Corp., Becton Dickinson (U.S. medical technology), Sun Life Financial, TD Bank, Walgreen Co. (U.S. pharmacies) and Diageo plc (UK alcoholic beverages). This $2.5 billion fund holds 24% 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.)...

ISHARES DIVIDEND INDEX FUND $20.28 (Toronto symbol XDV; buy or sell through a broker) began trading in December, 2005. The fund currently holds the 30 highest yielding Canadian stocks. These stocks are included in the index based on their dividend growth, yield and average payout ratio. The weight of any one stock in the fund is limited to 10% of the fund’s assets. Its MER is 0.50%. iShares Dividend Index Fund now yields 3.2%. The fund’s top holdings are: CIBC at 7.6%; Manitoba Telecom at 5.7%; Bank of Montreal, 5.7%; National Bank, 5.2%; TD Bank, 5.0%; Royal Bank, 4.5%; Russel Metals, 4.4%; Telus Corp., 4.1%; Bank of Nova Scotia, 3.9%; IGM Financial, 3.7%; Rothmans, 3.5%; TransCanada Corporation, 3.3%; BCE Inc., 3.3%; Laurentian Bank, 3.2%; and Enbridge, 3.1%....

SLEEP COUNTRY CANADA INCOME FUND $20.89 (Toronto symbol Z.UN; SI Rating: Extra Risk) is the largest retailer of mattresses in Canada. Mattress sets account for about 90% of its sales. Other products include head boards, foot boards, pillows, mattress pads, bed frames and sheets. In the three months ended September 30, 2007, Sleep Country’s sales rose 7.1%, to $104.7 million from $97.8 million a year earlier. Cash flow per unit rose 11.3%, to $0.89 from $0.80. In January 2006, Sleep Country bought Dormez-Vous Sleep Centres, a Montreal mattress retailer with five stores. In March 2006, Sleep Country purchased Sleep America, an Arizona mattress retailer. There are now 24 stores in Quebec and 44 in Arizona, in addition to 126 stores in Canada outside Quebec....

BMO DIVIDEND FUND $44.37 (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 49.0% of its portfolio in the Financial services industry. Its next-largest holdings are Energy at 15.1% and Consumer discretionary at 7.5%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Power Financial Corporation, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Imperial Oil, Shaw Communications, Enbridge Inc., Husky Energy and Sun Life Financial. Over the last five years, the $5.8 billion BMO Dividend Fund has posted a 14.6% annual rate of return. That’s under the S&P/TSX’s gain of 18.3%. 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 1.8% over the last year, compared to a gain of 9.8% for the S&P/TSX index. BMO Dividend’s MER is 1.71%....