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BMO EQUITY FUND $33.37 (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) generally invests mostly in ‘blue-chip” Canadian companies. These stocks are selected based on the manager’s outlook for the industry they operate in, the earnings record of each company, the strength of management and the potential for growth. BMO Equity Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank of Canada, TD Bank, EnCana Corporation, Canadian Natural Resources, Rogers Communications, Potash Corporation of Saskatchewan, CIBC and Bank of Nova Scotia. The $2.3 billion fund currently holds 41.9% of its portfolio in the Resources sector. Its next-largest holding is Financial services at 28.4%....

RBC CANADIAN EQUITY FUND $29.28 (CWA Rating: Conservative) (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) invests mostly in larger-capitalization stocks, but also looks for opportunities in small and mid-cap stocks. The fund’s 10 largest holdings are TD Bank, Manulife Financial, Bank of Nova Scotia, Royal Bank, EnCana, Canadian Natural Resources, Suncor Energy, Research in Motion, Potash Corp. and Bank of Montreal. The $5.3 billion fund holds 39.3% of its holdings in Resources stocks. It also holds 28.4% in Financial services stocks. Over the last ten years, RBC Canadian Equity posted a 10.3% annual rate of return. That’s about equal to the S&P/TSX’s gain of 9.8%. The fund made 21.4% over the last year, equal to the gain of 21.4% for the S&P/TSX. The fund’s MER is 1.99%....

Here are five large funds run by each of Canada’s big-five banks. Each holds the kind of conservative, well-balanced portfolios of high quality stocks we recommend. All five have a high weighting in Financial services and Energy stocks. However, they stick with high-quality issues with sound fundamentals, so these concentrations don’t add a lot of risk. Each has its quirks, but overall they are well positioned for low-risk returns. TD CANADIAN EQUITY FUND $32.56 (CWA Rating: Conservative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-386-3757; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies with strong growth potential. TD Canadian Equity Fund’s 10 largest holdings are Royal Bank, Suncor Energy, TD Bank, Rogers Communications, Canadian Natural Resources, Canadian Oil Sands Trust, Research in Motion, Schlumberger, Manulife Financial and Freeport McMoran....

ENCANA $66 (Toronto symbol ECA; SI Rating: Average) has decided to develop the Deep Panuke offshore natural gas field located approximately 250 kilometers southeast of Nova Scotia on the Scotian Shelf. Deep Panuke will cost EnCana an estimated $550 million to bring into production (all amounts except share price in U.S. dollars). To put that into perspective, EnCana reported cash flow of $2.2 billion in the three months ended September 30, 2007. Output should begin in 2010. Deep Panuke will deliver between 200 million and 300 million cubic feet of natural gas per day to markets in Canada and the northeast United States. That will increase EnCana’s daily gas production by between 8% and 10%....

ENCANA CORP. $62 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 752.8 million; Market cap: $46.7 billion; SI Rating: Average) will cut its 2008 capital spending plans in Alberta by 40% if the Alberta government adopts in full its proposals to raise oil and gas royalties. EnCana focuses on early-stage gas properties, so higher royalties would make some new projects uneconomical to develop. The company has already trimmed its capital spending plans for this year due to falling natural gas prices and shortages of labour and drilling equipment. Our view is that gas prices will eventually rebound, which should help offset higher royalties. Meanwhile, EnCana could speed up development of its projects outside of Alberta, like its proposed Deep Panuke offshore gas field south of Nova Scotia. That would help it maintain current production levels....

IMPERIAL OIL $48 (Toronto symbol IMO; SI Rating: Average) is Canada’s largest integrated oil company, with operations in all phases of the petroleum industry. In the three months ended June 30, 2007, Imperial’s earnings fell 14.9%, to $712 million or $0.76 a share, from $837 million or $0.85 a share. The decline came from the absence of tax rate reductions reported a year earlier and lower oil prices. Revenues fell 5.2%, to $6.3 billion from $6.7 billion. Imperial’s cash flow rose 1.7%, to $882 million from $867 million. Cash flow per share rose 5.6%, to $0.94 from $0.89. The higher per-share figure reflects continued aggressive stock buybacks. The company bought back $622 million of its stock in the latest quarter. Imperial still holds cash of $2 billion....

CANADIAN IMPERIAL BANK OF COMMERCE $96 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 334.6 million; Market cap: $32.1 billion; SI Rating: Above average) earned $2.42 a share in its third fiscal quarter ended July 31, 2007, up 25.4% from $1.93 a year earlier. These figures exclude unusual items, including a $0.56 a share writedown of mortgage-backed securities in the most recent quarter. Revenue grew 7.1%, to $3.0 billion from $2.8 billion, thanks to strong growth at its retail banking and investment operations. The bank has raised its quarterly dividend 13.0%, from $0.77 a share to $0.87. The new annual rate of $3.48 yields 3.6%. CIBC is a buy....

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....

ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets. Most of the 60 stocks in the index are good quality companies. However, to meet the requirement that all sectors are represented, the index holds a few firms we wouldn’t include, such as Cott Corporation and Celestica. The index’s top holdings are: Royal Bank, 6.6%; Manulife, 5.8%; TD Bank, 4.7%; Bank of Nova Scotia, 4.7%; EnCana Corporation, 4.4%; Suncor Energy, 3.9%; Research in Motion, 3.7%; Canadian Natural Resources, 3.5%; Bank of Montreal, 3.1%; CIBC, 3.3%; BCE Inc., 2.6%; Barrick Gold, 2.8%; Sun Life Financial, 2.9%; and Potash Corp., 2.6%....

The best exchange-traded funds (ETFs) offer well-diversified, tax-efficient portfolios with very low management fees. Due to buyback and share issue arrangements, ETFs always trade close to their net asset value. Here are some of the best deals available in ETFs. We’ve also analysed one we don’t like. ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets....