PepsiCo Inc.

IVY FOREIGN EQUITY FUND $26.03 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 8.0%, and that was better than the Morgan Stanley benchmark’s gain of 5.7%. Ivy Foreign Equity Fund made 5.1% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets. Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most perhaps 10% of the holdings of a conservative investor. The fund’s top 10 holdings are Reckitt Benckister plc (UK household & healthcare products), Brown & Brown (U.S. insurance), Danaher Corp. (U.S. control products and tools), Essilor International SA (corrective eyewear), Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), Omnicom (U.S. media services), Diageo plc (UK alcoholic drinks) and Ecolab Inc. (U.S. maintenance & cleaning products)....

IVY GROWTH AND INCOME FUND $23.18 (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 performed well, returning 8.3% annually for the 10 years. It made 4.4% over the last year. The fund’s MER is 2.17%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Omnicom Group (U.S. media services), Bank of Nova Scotia, Danaher Corp. (U.S. control products and tools), Reckitt Benckiser plc (UK household & healthcare products), Yellow Pages Income Fund, Manulife Financial and CN Railway. This $3.7 billion fund holds 19% 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.)...

TRIMARK CANADIAN FUND $22.18 (CWA Rating: Conservative) (AIM Funds Management, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.aimfunds.ca. Buy or sell through brokers.) uses a bottom-up stock-picking style, focusing on fundamentals like earnings, cash flow and low debt. The fund’s 10 largest holdings are TD Bank, Bank of Nova Scotia, Thomson Corp., Power Corp., Royal Bank, Molson Coors Canada, Toromont Industries, Loblaw, Molex Inc. and Petro-Canada. Trimark Canadian made 8.6% annually over the last 10 years, compared to the S&P/TSX’s gain of 10.9%. It made 15.6% in the past year. The fund’s MER is 1.64%. Trimark Canadian Fund is still a buy....

FIDELITY FOCUS CONSUMER INDUSTRIES FUND $15.82 (CWA Rating: Aggressive) (Fidelity Investments Canada, 483 Bay St., Suite 200, Toronto, Ont. M5G 2N7. 1-800-263-4077; Web site: www.fidelity.ca. Load fund — available from brokers) invests mainly in U.S. consumer goods and services companies. This includes appliances, cars, clothing, cosmetics, entertainment, food and beverages, homes, household products, leisure, personal computers, restaurants and travel. Consumer spending is a key part of the U.S. economy, accounting for approximately two-thirds of activity. The fund uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies....

Here are three Fidelity funds that hold much of their portfolios in one specific sector. We generally advise against investing in funds that concentrate in one economic sector. For example, a fund concentrating in financial services is particularly vulnerable to any setbacks in the sector or interest-rate rises. However, all of these Fidelity funds stick with high-quality stocks. 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 any one sector. FIDELITY FOCUS CONSUMER INDUSTRIES FUND $15.82 (CWA Rating: Aggressive) (Fidelity Investments Canada, 483 Bay St., Suite 200, Toronto, Ont. M5G 2N7. 1-800-263-4077; Web site: www.fidelity.ca. Load fund — available from brokers) invests mainly in U.S. consumer goods and services companies....