investment

Opportunism is the source of a lot of the conflicts of interest that you run into as an investor. The term “opportunism” carries negative connotations for a lot of people. But ambitious people and organizations, in the private sector and elsewhere, are always looking for growth opportunities. Some are careful about the opportunities they pursue, to avoid outcomes that can cause problems for themselves and their clients. Others are more inclined to rush in to take advantage of new opportunities. The financial industry leans toward rushing right in. After all, brokers can add to their product line at little extra cost. They just add to the workload of their existing employees, who are glad for a chance to get ahead in this high-paid field. When new products or services fail to sell, the industry quits offering them....

SolarCity Corp., $52.13, symbol SCTY on Nasdaq (Shares outstanding: 96.6 million; Market cap: $4.9 billion; www.solarcity.com), provides rooftop solar systems for homeowners, businesses, schools and government agencies in the U.S. The company creates a customized energy plan for each customer, then sells, finances, engineers, installs, monitors and maintains the system. Customers can “sell” any electricity they don’t use onto the power grid for credits they can use to “buy” electricity at night. SolarCity continues to grow quickly. In the three months ended December 31, 2014, the amount of megawatts deployed rose 70% from a year ago, the number of megawatt orders booked jumped 103%, and SolarCity added 21,318 clients, bringing its total to 189,657 as of the end of the quarter. In 2013, it had a customer base of 44,579....

Northland Power Inc., $17.15, symbol NPI on Toronto (Shares outstanding: 149.7 million; Market cap: $2.9 billion; www.northlandpower.ca), develops, builds, owns and operates natural-gas-fired power plants, wind farms, solar projects and hydroelectric facilities. The company converted to a corporation from an income trust on January 1, 2011. Northland owns or has stakes in 1,345 megawatts of operating generating capacity, with an additional 640 megawatts (400 megawatts net to Northland) under construction and another 456 megawatts (348 megawatts net to Northland) with awarded power contracts....

Most investors would agree when I say that Exchange-Traded Funds (ETFs) started out as the most benign investment innovation that has come along in our lifetimes.

However, as often happens after the successful launch of any new investment product, the financial industry soon came up with new, improved ETFs. The new models came with a wider variety of investor appeal, along with new wrinkles and extra costs.

The first ETFs had a simple goal: cutting fees for investors. Each new ETF aimed to copy the performance of a particular stock index (minus the costs of creating and running the ETF, of course). Most of the model indices were well-known, widely followed collections of actively traded stocks.

These days, new ETFs aim to broaden investment opportunities for investors, and create new profit opportunities for the financial companies that sponsor them.

Instead of giving you a low-cost way to copy the results of a standard market index, new ETFs aim to mimic much narrower indices and higher-risk strategies. They may give you a way to invest in a particular foreign stock market—coupled, in many cases, with an arrangement that hedges against movements in the foreign currency in which that foreign market carries on its trading. Or they may give you a way to participate in a particular stock-market strategy.

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Market Vectors Agribusiness ETF, $54.21, symbol MOO on New York (Units outstanding: 26.1 million; Market cap: $1.4 billion; www.vaneck.com), aims to track the Market Vectors Global Agribusiness Index, after expenses. This index includes shares of agricultural firms from around the world. To be included, a company must be publicly traded, have a market cap over $150 million U.S. and meet certain minimum trading volumes. The index contains five major subsectors: agriculture chemicals and fertilizers, agricultural products, agricultural equipment, livestock operations, and biofuels (including ethanol and biodiesel). The geographic breakdown of stocks in the Market Vectors Global Agribusiness Index is as follows: the U.S. (48.9%), Canada (11.0%), Switzerland (8.1%), Japan (6.4%), Singapore (4.1%), Norway (3.8%), the Netherlands (3.1%), Malaysia (3.0%), China (1.9%), Australia (1.9%) and other countries (7.8%)....

Counsel Corp., $2.15, symbol CXS on Toronto (Shares outstanding: 99.4 million; Market cap: $211.6 million; www.counselcorp.com), operates a residential mortgage-lending business through its wholly owned subsidiary, Street Capital. The company sources its mortgages through a network of independent brokers in all Canadian provinces except Quebec. It then sells the mortgages it underwrites to leading financial institutions. Even though the company sells the mortgages, it continues to handle all communication with borrowers throughout each mortgage’s term. That lets it renew mortgages without the cost of acquiring new ones, which typically involves significant expenses for things like brokers, marketing and underwriting....

Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time.

North American Palladium (symbol PDL on Toronto; www.napalladium.com) owns the Lac des Iles palladium mine near Thunder Bay. It also owns the Vezza gold project in Quebec’s Abitibi region.

Palladium is mainly used in catalytic converters for automobiles, as well as in jewellery.

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RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 315.4 million; Market cap: $8.8 billion; Price-to-sales ratio: 7.0; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 292 shopping centres in Canada, including 15 under development. These holdings account for 84% of the REIT’s rental revenue. The remaining 16% comes from 48 malls in the U.S.

In the past few years, RioCan took advantage of lower property values and interest rates to expand its portfolio. As a result, its revenue jumped 39.8%, from $882 million in 2010 to $1.2 billion in 2014.

Due to gains and losses on property sales, earnings fell from $6.04 a unit (or a total of $1.5 billion) in 2010 to $3.25 (or $873 million) in 2011. Earnings rebounded to $4.57 a unit (or $1.3 billion) in 2012 but declined to $2.10 a unit (or $663 million) in 2014.

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ISHARES INDIA 50 ETF $33.02 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that invests in the 50 largest, most liquid Indian securities.

Indian stocks have moved up 34%, to record highs, since the May 2014 election of Narendra Modi as prime minister.

The government has just introduced its first full-year budget, and the $290-billion spending plan includes an additional $12 billion to address one of the country’s most pressing needs—modernizing its transportation, communications and electrical infrastructure.

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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $40.95 (New York symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that mainly trade on the Santiago Stock Exchange.

The fund’s top holdings are S.A.C.I. Falabella (retail), 10.6%; Enersis SA (electricity), 9.6%; Empresas Copec SA (conglomerate), 7.9%; Empresa Nacional de Electricidad (electricity), 7.2%; LATAM Airlines, 5.0%; Banco Santander Chile (banking), 4.9%; Empresas CMPC (pulp and paper), 4.9%; Banco de Chile, 4.4%; Cencosud SA (retailer), 4.2%; and Quimica y Minera de Chile (mining), 4.1%.

The fund’s industry breakdown is: Utilities, 28.3%; Financials, 18.1%; Materials, 11.8%; Consumer Discretionary, 11.4%; Consumer Staples, 9.3%; Industrials, 8.2%; Energy, 7.7%; Telecommunications, 2.2%; and Information Technology, 2.2%.

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