ishares

ISHARES MSCI CANADA INDEX FUND $28.59 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.49% MER.

The index’s top holdings are Royal Bank, 7.4%; TD Bank, 6.5%; Bank of Nova Scotia, 5.7%; Suncor Energy, 4.0%; CN Railway, 3.7%; Bank of Montreal, 3.5%; Manulife Financial, 2.7%; Canadian Natural Resources, 2.7%; CIBC, 2.7%; Valeant Pharmaceuticals, 2.7%; and Enbridge, 2.5%.

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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $23.86 (Toronto symbol XDV; buy or sell through brokers; 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 its assets. The fund’s MER is 0.55%. It yields 4.1%.

The fund’s top holdings are CIBC, 6.8%; National Bank, 6.4%; Bonterra Energy, 6.4%; TD Bank, 5.9%; Bank of Montreal, 5.7%; Telus, 4.7%; Royal Bank, 4.6%; IGM Financial, 4.5%; Bank of Nova Scotia, 4.3%; and BCE, 4.0%.

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ISHARES S&P/TSX 60 INDEX FUND $19.25 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 8.3%; TD Bank, 7.3%; Bank of Nova Scotia, 6.4%; Suncor Energy, 4.5%; CN Railway, 4.1%; Bank of Montreal, 3.9%; Manulife Financial, 3.1%; Canadian Natural Resources, 3.1%; CIBC, 3.0%; BCE, 3.0%; Enbridge, 3.0%; Valeant Pharmaceuticals, 2.9%; TransCanada Corporation, 2.7%; Potash Corp., 2.4%; CP Rail, 2.1%; Telus, 2.0%; and Cenovus, 1.9%.
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iShares Canadian Fundamental Index Fund ETF, $13.39, symbol CRQ on Toronto (Units outstanding: 16.8 million; Market cap: $225.0 million; ca.ishares.com), aims to track the FTSE RAFI Canada Index. The ETF’s top 10 holdings are Royal Bank, 7.2%; TD Bank, 6.2%; Bank of Nova Scotia, 5.0%; Manulife Financial, 4.6%; Suncor Energy, 4.4%; Bank of Montreal, 4.0%; Encana, 3.3%; CIBC, 3.0%; Canadian Natural Resources, 2.8%; and Sun Life Financial, 2.6%. Its expenses are 0.72% of its assets. The RAFI (Research Affiliates Fundamental Index) methodology aims to select companies by the highest fundamental measures of their size, rather than by market capitalization (or the value of all their outstanding shares)....

iShares MSCI EAFE Index Fund (CAD-Hedged) ETF, $21.12, symbol XIN on Toronto (Units outstanding: 47.6 million; Market cap: $1.0 billion; ca.ishares.com), is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International Europe Australasia Far East (MSCI EAFE) Index. The MSCI EAFE Index is used as a benchmark to measure international stock performance. It is made up of 22 MSCI country indexes representing developed markets in Europe, Australasia and the Far East. The fund is hedged against movements of foreign currencies against the Canadian dollar, so its value rises and falls with the stocks in its portfolio. Note, however, that such exposure adds to the diversification in your investments....

Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index....

Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.

ETFs trade on stock exchanges, just like stocks....

ISHARES CDN REIT SECTOR INDEX FUND $15.46 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 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 5.0%.

The ETF’s largest holding is RioCan REIT at 19.5%, followed by H&R REIT (14.9%), Dundee REIT (8.0%), Canadian REIT (7.4%), Calloway REIT (6.7%), Allied Prop. REIT (5.9%), Boardwalk REIT (5.8%), Canadian Apt, REIT (5.7%), Cominar REIT (5.6%), Artis REIT (4.7%), Chartwell REIT (4.6%), Granite REIT (4.4%), Dundee Intl. REIT (2.3%), Northern Property REIT (2.3%) and Crombie REIT (1.8%).
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ISHARES DEX UNIVERSE BOND INDEX FUND $30.34 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 762 bonds in the portfolio have an average term to maturity of 9.53 years. The fund’s MER is 0.33%.

The bonds in the index are 68.0% government and 32.0% corporate.

The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.6%. Its yield to maturity is 2.79%, 0.95% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.63 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index.

This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 379 bonds with an average term to maturity of 2.87 years. The bonds in the index are 60.9% government and 30.1% corporate. The fund’s MER is 0.28%.

iShares DEX Short-Term Bond Index Fund yields 2.6%. However, this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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