manulife financial

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%....

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. The $3.2 billion fund currently holds about 51.7% of its portfolio in Resources shares. It also has a bias towards Financial services stocks, with 18.8% of its holdings in that sector....

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....

IVY CANADIAN FUND $30 (CWA Rating: Conservative) invests in high-quality, largecapitalization stocks. The $3.7 billion fund’s top holdings include Shoppers Drug Mart, Imperial Oil, Manulife Financial, Canadian National Railway, Reckitt Benckiser plc, McDonald’s Corp., Thomson Corporation, Diageo plc and PepsiCo. Ivy Canadian’s breakdown by industry is: Consumer staples, 22.3%; Financials, 13.9%; Consumer discretionary, 13.7%; Industrials, 12.4%; and Energy, 8.3%....

IVY GROWTH AND INCOME FUND $23.41 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund, holding a mixture of stocks, bonds and cash. The fund has returned 6.3% annually for the 10 years. It made 4.1% over the last year. The fund’s MER is 2.14%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Canadian National Railway, Manulife Financial, Imperial Oil, Thomson Corp., McDonald’s Corp., Becton Dickinson (U.S. medical technology), Diageo plc (UK alcoholic beverages) and Reckitt Benckiser plc (UK household & healthcare products). This $3.0 billion fund holds 24% of its assets in bonds. Interest rates on bonds are now under 5% annually in Canada. That’s the total return that a bond can provide, from today until it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, and some of their principal besides....

At one time, mutual funds within a particular ‘fund family’ often shared some key investment characteristic, such as a conservative or aggressive investment approach, or a stress on value as opposed to growth. However, due to trends in the mutual-funds industry such as corporate mergers and takeovers, and more aggressive marketing, a fund’s membership in a fund family now has little bearing on its investment approach or appeal as an investment. Below, for instance, we analyse five funds from the Ivy Group. (Note that Ivy is now part of Mackenzie Financial, which in turn is part of IGM Financial. The contact information listed for Ivy Growth and Income also applies to the other four.)...

RBC CANADIAN DIVIDEND FUND $49.82 (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) has 43.8% of its portfolio in Financial services stocks. It has a further 16.9% in Energy stocks and 8.1% in Materials. The $8.9 billion RBC Canadian Dividend Fund’s top stock holdings are Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank, Manulife Financial, Canadian Imperial Bank of Commerce, TransCanada Corporation, Bank of Montreal, BCE Inc. and Suncor Energy. Over the last five years, RBC Canadian Dividend Fund has posted a 15.8% annual rate of return. That’s less than the S&P/TSX’s gain of 18.4% over the same period....

BMO DIVIDEND FUND $50.82 (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) currently holds about 57.3% of its portfolio in the Financial services industry. Its next-largest holdings are Energy at 13.3% and Consumer discretionary at 6.5%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Power Financial, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Alcan, Imperial Oil, Brookfield Asset Management, Thomson Corporation, BCE Inc. and Sun Life Financial. Over the last five years, the $5.9 billion BMO Dividend Fund has posted a 15.3% annual rate of return. That’s under the S&P/TSX’s gain of 18.4%. However, the S&P/TSX index held a high 40% or so of its holdings in Resources shares. That’s been one of the best-performing, although riskiest, sectors. The fund gained 15.4% over the last year, compared to a gain of 20.1% for the S&P/TSX index. BMO Dividend’s MER is 1.73%....

BMO Dividend and RBC Canadian Dividend hold mostly high-quality stocks. These stocks sometimes run into trouble and go through lengthy struggles, just like lesser investments. Eventually, though, most solve their problems and go on to thrive anew. Both funds hold a high proportion of their assets in financial services stocks. However, if you must focus on something, finance is a relatively stable sector. If you do invest in these funds, be sure to adjust the rest of your portfolio so these funds won’t overly concentrate your holdings in the financial sector....

UNIVERSAL CANADIAN GROWTH FUND $24 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. Web site: www.mackenziefinancial.com. 1-800-387-0780; Load fund — available from brokers) holds companies with strong management and sound business prospects. The fund holds fewer than 40 stocks at all times. Top holdings include BCE Inc., Canadian National Railway, BorgWarner (U.S. auto parts & equipment) Industrial Alliance Insurance, Manulife Financial, Cognos Inc., Shoppers Drug Mart, EnCana Corporation, Martinrea International and Nova Chemicals. The fund’s breakdown by economic sector is as follows: 24.1% in Consumer discretionary, 15.3% in Financials, 11.9% in Industrials, 8.3% in Energy, 5.1% in Health Care, 4.9% in Telecommunications Services, 4.7% in Information technology and 4.6% in Consumer staples....