ishares

ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $21.65 (Toronto symbol XDV; buy or sell through a broker; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of assets. The fund’s MER is 0.50%. It yields 1.9%. The fund’s top holdings are CIBC, 6.9%; Bonterra Energy Corp., 6.3%; Bank of Montreal, 5.2%; National Bank, 5.0%; TD Bank, 5.0%; AG Growth International, 4.9%; IGM Financial, 4.2%; Telus, 4.1%; Royal Bank, 4.0%; Bank of Nova Scotia, 3.9%; BCE, 3.5%; and TMX Group, 3.4%. The fund holds 52.9% of its assets in financial stocks. Utilities are next, at 22.5%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....

ISHARES MSCI CANADA INDEX FUND $33.63 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) is like a market-cap-based index fund, but its managers try to improve performance by tinkering with the index-fund formula. They do this through their Morgan Stanley Capital International Canada Index. The fund has an MER of 0.50%. The index’s top holdings are Royal Bank, 5.8%; TD Bank, 5.0%; Suncor Energy, 5.0%; Bank of Nova Scotia, 4.4%; Potash Corp., 4.0%; Canadian Natural Resources, 3.7%; Barrick Gold, 3.6%; Teck Resources, 2.7%; Bank of Montreal, 2.5%; Goldcorp, 2.4%; CN Railway, 2.4%; Manulife Financial, 2.4%; CIBC, 2.3% and Research in Motion, 2.2%. If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index Fund. You’ll pay about a third of the management fees....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....

ISHARES CDN REIT SECTOR INDEX FUND $14.43 (Toronto symbol XRE; buy or sell through a broker; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of iShares CDN REIT Sector Index Fund’s value. iShares CDN REIT’s expenses are just 0.55% of its assets. RioCan REIT is the fund’s largest holding, at 24.5%, followed by H&R REIT (12.4%), Canadian REIT (8.9%), Calloway REIT (8.4%), Boardwalk REIT (7.3%), Primaris Retail REIT (5.8%), Canadian Apartment Properties REIT (5.8%), Dundee REIT (5.4%), Chartwell Seniors Housing REIT (5.0%), Cominar REIT (4.7%), Artis REIT (4.2%), Allied Properties REIT (3.8%) and Extendicare REIT (3.3%)....

The IA Clarington Sarbit U.S. Equity Fund holds mostly high-quality stocks balanced across the five main economic sectors. The fund is okay to hold if you want to invest in U.S. stocks, but don’t want exposure to the U.S. dollar. However, we advise putting around 25% of your portfolio in U.S. stocks, without removing the U.S. dollar exposure. We see exposure to the U.S. dollar exposure as a plus — a valuable form of diversification. A: The Excel India Fund holds mostly high-quality stocks, although it does have a high 2.98% MER. However, the Excel India Fund is okay to hold....

The Indian government recently projected that the country’s economy will grow at a rate of 8.6% this year. That’s up from the 8.0% growth rate the country recorded last year. That would be the country’s fastest growth rate since 2008. The government expects the fastest growth to come in India’s service sector (11%), followed by manufacturing (8.8%) and agriculture (5.4%).

Exchange traded funds make foreign investing simple

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ISHARES DEX UNIVERSE BOND INDEX FUND $29.48 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the DEX Universe Bond Index. This index consists of a wide range of investment-grade Canadian government and corporate bonds with terms to maturity of more than one year. The 406 bonds in the portfolio have an average term to maturity of 9.05 years. The fund’s MER is 0.30%. The bonds in the index are 69.6% government and 30.4% corporate. The fund sticks with high-quality government bonds from issuers such as Canada Housing Trust, Government of Canada and Province of Ontario, plus high-quality corporate bonds from issuers such as Bank of Montreal, TransCanada Pipelines, Bank of Nova Scotia and Bell Canada....

ISHARES DEX SHORT TERM BOND INDEX FUND $28.78 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a wide range of investment-grade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 221 bonds with an average term to maturity of 2.86 years. Top issuers include the Government of Canada, Canada Housing Trust and the Province of Ontario. The bonds in the index are 69.2% government and 30.8% corporate. The fund’s MER is 0.25%....

We continue to advise against investing in bonds right now, because today’s low interest rates make them unattractive. That’s especially so in light of the potential rise in inflation that may follow the heavy deficit spending and expansion of the money supply that is still underway. However, if you need stable income and want to hold bonds, here are two bond funds that have low fees and high-quality holdings. ISHARES DEX SHORT TERM BOND INDEX FUND $28.78 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the DEX Short-Term Bond Index....

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $44.32 (New York Exchange symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange. The fund’s top holdings are China Mobile, 9.7%; China Construction Bank, 9.6%; CNOOC, 8.3%; Industrial & Commercial Bank, 8.0%; China Life, 5.7%; Petrochina, 4.3%; Ping An Insurance, 4.2%; Bank of China, 4.2%; China Petroleum & Chemical, 4.2%; and China Unicom Hong Kong, 4.1%. The fund’s holdings give it the following industry breakdown: Financials, 47.3%; Telecommunications, 17.7%; Oil and Gas, 16.7%; Basic Materials, 10.3%; Industrials, 6.1%; and Consumer Services, 1.8%. The ETF has an expense ratio of 0.72%....