investment

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $31.60 (Toronto symbol AP.UN; Units outstanding: 60.0 million; Market cap: $1.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.2%; www.alliedpropertiesreit.com) owns 119 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 8.3 million square feet of leasable area.

Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.

In 2011, the trust bought 22 properties for $456 million. In the first half of 2012, it bought 14 buildings for $175.0 million. Allied has an occupancy rate of 92.3%.

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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $61.55 (New York Exchange 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 are mainly traded on the Santiago Stock Exchange.

The fund’s top holdings are LATAM Airlines SA, 9.4%; Empresas Copec SA (conglomerate), 8.3%; Quimica y Minera de Chile (mining), 6.6%; Empresa Nacional de Electricidad (electricity), 6.4%; Cencosud SA (retailer), 6.2%; Banco Santander Chile (banking), 5.7%; Enersis AS (electricity), 5.4%; S.A.C.I. Falabella (retail), 5.2%; and Empresas CMPC (pulp and paper), 4.7%.

The fund’s industry breakdown is as follows: Utilities, 23.2%; Industrials, 20.6%; Financials, 17.2%; Materials, 15.5%; Consumer Staples, 11.2%; Consumer Discretionary, 6.3%; Telecommunications, 3.7%; and Information Technology, 1.7%.

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ISHARES MSCI GERMANY FUND $22.94 (New York Exchange symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index.

This index aims to replicate 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.

The ETF’s top holdings are Siemens (engineering conglomerate), 9.2%; BASF (chemicals), 8.5%; Bayer (diversified chemicals), 8.0%; SAP (software), 7.4%; Allianz (insurance), 6.2%; E.ON (energy), 4.6%; Deutsche Bank, 4.5%; Deutsche Telekom, 3.6%; and Linde AG (industrial gases), 3.5%.

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ISHARES CDN REIT SECTOR INDEX FUND $16.40 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of each REIT is limited to 25% of the ETF’s value. iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.5%. The ETF’s largest holding is RioCan REIT at 20.8%, followed by H&R REIT (11.6%), Dundee REIT (9.1%),Canadian REIT (7.4%), Calloway REIT (7.3%), Cominar REIT (6.7%), Boardwalk REIT (6.6%), Canadian Apartment REIT (6.0%), Primaris Retail REIT (5.5%), Allied Properties REIT (4.9%), Chartwell Seniors REIT(4.6%), Artis REIT (4.6%), Northern Property REIT (2.6%) and Crombie REIT (2.0%)....

Chinese stocks are up roughly 16% since early September. That’s largely because the country’s industrial production and exports are picking up, and government measures to stimulate the economy are taking effect. China’s growth rate could reach 8.2% nextyear, and its long-term outlook is positive. Here are two Chinese exchange traded fund (ETF) recommendations. One invests in all publicly traded Chinese stocks available to foreign investors. The other holds small cap Chinese stocks. SPDR S&P CHINA ETF $68.92 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) is an ETF that aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks that are available to foreign investors. Right now, SPDR S&P China ETF holds 184 stocks....

RIOCAN REAL ESTATE INVESTMENT TRUST $26.69 (Toronto symbol REI.UN; Units outstanding: 296.3 million; Market cap: $7.9 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) recently formed a 50/50 joint venture with ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $30.71 (Toronto symbol AP.UN; Units outstanding: 60.0 million; Market cap: $1.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.alliedpropertiesreit.com). RioCan, Allied and privately held Diamond Corp. have now agreed to buy the headquarters of The Globe and Mail newspaper in downtown Toronto. RioCan and Allied will each own 40%, while Diamond will hold 20%. The three partners plan to redevelop the site into a complex with residential, retail and office units. RioCan will manage thestores, and Allied will operate the office portion....

Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. Recently, we received a question from an Inner Circle member about one of the world’s most visible technology stocks, Internet giant Yahoo. Pat discusses the state of the company following its recent hiring of a new CEO away from its most powerful rival, Google. Pat also took the opportunity to compare the prospects of both of these Internet giants....

Many investors start their search for winning stocks by looking at a company’s income statement and balance sheet. But it helps to remember that earnings are adjusted and that some items in a corporate report are more useful to investors than others. A company’s earnings are different from an employee’s salary. Earnings are indefinite and subject to revision, even years later. Companies have to estimate many costs, and make yearly write-offs against earnings, according to arbitrary rules....

Investors sometimes ask what to do with an inheritance or any lump sum: buy stocks or pay off the home mortgage. From a purely financial perspective, it’s best to pay off the mortgage first then borrow money to buy stocks. That way, you are borrowing to invest, so you get to deduct your interest expense from your taxable income. With interest rates where they are today, this can expand the after-tax return on your initial investment by 2% a year compounded. That can give your long-term investment returns an enormous boost, and it’s theoretically risk-free. In practice, however, you need to take behavioural finance into account to weigh the risk....

The Howard Hughes Corp., $73.50, symbol HHC on New York (Shares outstanding: 37.9 million; Market cap: $2.8 billion; www.howardhughes.com), owns 34 commercial, residential and mixed-use properties in 18 U.S. states. General Growth Properties (symbol GGP on New York), a real estate investment trust (REIT) that went bankrupt during the financial crisis, handed out shares of Howard Hughes as part of its restructuring in 2010. The assets held by Howard Hughes required development and considerable funding. That made them a poor fit with a U.S. REIT, which must pay out 90% of its operating profit as a dividend. Prominent U.S. investor Bill Ackman is the chairman of Howard Hughes. He also owns about 10% of the company through his Pershing Square Capital Management firm. (Incidentally, Pershing Square also owns 14.2% of CP Rail and recently succeeded in replacing seven of CP’s 16 directors with its own nominees. It also appointed Hunter Harrison, the successful former CEO of CN Rail, as CP’s chief executive)....