enbridge

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....

BCE INC. $36.29, Toronto symbol BCE, is trading nearly 15% below the $42.75-a-share takeover offer it accepted in July 2007. This is partly because several institutional holders of BCE bonds have launched a class-action lawsuit to oppose it. BCE’s plan to take on more debt has hurt the value of their holdings. If the suit succeeds and forces BCE to compensate the bondholders for their losses, the Ontario Teachers’ Pension and its partners may decide to abandon the takeover. Liquidity problems in the debt markets could also scuttle the takeover, since that could hurt the ability of the takeover consortium to issue new bonds. This group has also lined up loans from several banks, but recent writedowns of U.S. subprime mortgages have raised fears that these banks may withdraw or cut their involvement. However, lower interest rates will cut the buyers’ costs. The drop in BCE suggests that the takeover is unlikely to go through. But at the current reduced price, BCE is once again an attractive buy for income and growth....

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $28.75 (Toronto symbol BA.UN: SI Rating: Above average) is the main provider of telephone services in Atlantic Canada. It also serves rural parts of Ontario and Quebec. As part of the deal that created Bell Aliant, the fund transferred the bulk of its wireless business to BCE. Without these operations, the fund now aims to spur growth by expanding the availability and capacity of its high-speed Internet service. Just 20% of Bell Aliant’s customers use its high-speed Internet service, so there’s plenty of room to grow. In the three months ended September 30, 2007, Bell Aliant earned $0.48 a unit from continuing operations in its second quarter. The fund took its present form on July 7, 2006, so it did not report earnings for the year-earlier quarter. But revenue on a pro forma basis, which assumes Bell Aliant began operations at the start of 2006, grew 1.6%, to $837.9 million from $825.1 million....

PEMBINA PIPELINE INCOME FUND $16.52 (Toronto symbol PIF.UN; SI Rating: Extra risk) has increased its distribution for the second time this year. The fund now pays $0.12 a month, up 9.1% from $0.11 previously. The units now yield 8.7%. In January, Pembina increased its monthly distribution by 10%, to $0.11 from $0.10. Pembina has interests in 14 feeder pipeline systems with a total length of 8,350 kilometres. This includes the Pembina System, in operation since 1954. The company also holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. Pembina’s total 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....

GREAT LAKES HYDRO INCOME FUND $20.30 (Toronto symbol GLH.UN; SI Rating: Extra Risk) owns 26 hydroelectric generating stations located on seven river systems in four distinct geographic regions: Quebec, Ontario, British Columbia and New England. Its facilities have 1,015 megawatts of generating capacity. In the three months ended March 31, 2007, Great Lakes’ revenues fell 1.2%, to $48.2 million from $48.8 million. Cash flow per share fell 3.8%, to $0.51 from $0.53. Power generation in British Columbia was lower due to an overhaul on an operating unit at the Lois facility. Total power generated was slightly lower than in the 2006 quarter, when water inflows were unusually strong....

PEMBINA PIPELINE INCOME FUND $16.72 (Toronto symbol PIF.UN; SI Rating: Extra risk) has interests in 14 feeder pipeline systems with a total length of 8,350 kilometres. This includes the Pembina System, in operation since 1954. The company also holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. Pembina’s total 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....

BMO DIVIDEND FUND $50.87 (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 58.3% of its portfolio in the Financial services industry. Its largest holding is Energy at 16.1%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Enbridge, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Imperial Oil, Brookfield Asset Management, Thomson Corporation, BCE Inc. and Sun Life Financial. Over the last five years, the $5.7 billion BMO Dividend Fund has posted a 13.2% annual rate of return. That’s just under the S&P/TSX 60’s gain of 13.4%. The fund gained 9.9% over the last year, compared to a gain of 15.0% for the S&P/TSX 60. BMO Dividend’s MER is 1.73%....

BMO Dividend and Royal Dividend hold mostly high-quality stocks. These stocks sometimes run into deep 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....

FORT CHICAGO ENERGY TRUST $10.82 (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. In the three months ended September 30, 2006, Fort Chicago’s revenues fell 38.8%, to $137.2 million from $227.8 million a year earlier. However, the lower revenue was due to a change in the method of accounting for Aux Sable’s sales. Cash flow per unit rose 36.1% in the quarter, to $0.49 from $0.36. Fort Chicago’s units yield 8.6%. U.S. dividends paid in an RRSP are not subject to withholding taxes. Outside an RRSP, you may need to submit extra paperwork at tax time, as around 40% of the monthly $0.0775 distribution is considered U.S. source dividend income. Dividends from U.S. sources sent to Canadians are subject to a withholding tax — usually 15%. However, if you hold the trust outside an RRSP, in most cases, you get a Canadian income tax credit to offset that tax....

ISHARES CANADIAN BOND BROAD INDEX FUND $28.97 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) (formerly the iUnits Government of Canada 10 Year Bond Fund) mirrors the performance of the Scotia Capital Universe Bond Index. This index consists of a diversified range of investment grade Canadian government and corporate bonds, with a term to maturity of more than one year. At last report, the bonds in the index were 45.3% Government of Canada bonds, 26.1% Provincial Government bonds, 1.2% Municipal bonds and 24.7% Corporate bonds....