royal bank

GENNUM CORP., $4.80, Toronto symbol GND, fell 9% on Friday after it increased its friendly takeover bid for Ottawa-based Tundra Semiconductor Corp. (Toronto symbol TUN). Like Gennum, Tundra makes chips and components for computer networking hardware, like modems and routers. Gennum’s products also let TV broadcasters store, edit and transfer video signals without losing picture quality. Gennum has increased its bid by 30%, and is now offering $112 million in cash and stock for Tundra. Two-thirds of Tundra’s shareholders must vote in favour of the deal at a special meeting on May 8. If they do, Gennum plans to close the purchase by June 1....

Claymore 1‐5 Yr Laddered Corporate Bond ETF, $20.31, symbol CBO on Toronto (Shares outstanding: 400,000; Market cap: $8.1 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF is a recent new issue which first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. It has a 0.75% annual management fee and pays a $0.0715 quarterly distribution, which yields 1.6% on a yearly basis. The fund’s 25 holdings are divided into five staggered, or “laddered,” equally weighted maturities that range from one to five years. Each maturity includes five or more bonds with a minimum credit rating of “A”. Each year, the longest-term bonds will reach maturity, and the shorter-term bonds will be a year older. The fund can use proceeds of the matured bonds to buy new bonds that restore the desired portfolio balance....

These five large funds — one from each of Canada’s big-five banks — have suffered over the last year. That’s because they were heavily weighted toward financial services and resource stocks. Financial services companies are still dealing with tight credit markets. As well, the recession has cut demand for resources. This, in turn, has driven down the prices of resource stocks. We still feel that the best way to profit in the stock market is to stick with high-quality, well-established companies and to spread your money out among the five sectors.You should also ensure your investments are diversified within each sector. These five funds continue to stick to high-quality investments. However, you still should adjust your portfolio to reflect the funds’ high weightings in certain sectors....

BMO EQUITY FUND $20.70 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ontario, M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) mostly invests in blue chip Canadian companies. The fund’s managers aim to identify stocks based on their analysis of the outlook for the industry the firms operate in, as well as their earnings records, management strength and growth potential. The $1.4-billion BMO Equity Fund’s 10 largest holdings are Bank of Nova Scotia, Royal Bank of Canada, Toronto-Dominion Bank, Canadian Natural Resources, Suncor Energy, EnCana Corporation, Barrick Gold, Manulife Financial, CIBC and Goldcorp. The fund currently holds 35.9% of its portfolio in the resource sector. Its next-largest segment is financial services, at 21.6%....

RBC CANADIAN EQUITY FUND $18.03 (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) mainly invests in larger-capitalization stocks, but may also buy small- and mid-cap stocks. The $3.1-billion fund’s largest holdings are Royal Bank, Manulife, EnCana, TD Bank, Potash Corp., Bank of Nova Scotia, Canadian Natural Resources, Suncor Energy, Research in Motion and BCE. The fund is heavily weighted (47.2%) toward the resource sector; 27% of its investments are in finance. Over the last 10 years, RBC Canadian Equity posted a 4.9% annual rate of return. That’s just over the S&P/TSX’s 4.6% gain. The fund lost 38.3% over the last year, compared to a loss of 38.2% for the S&P/TSX. The fund’s MER is 1.96%....

CIBC CANADIAN EQUITY FUND $16.61 (CWA Rating: Conservative) (CIBC Securities, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Web site: www.cibc.com. No load — deal directly with the bank) looks at fundamentals like earnings, cash flow and debt level to identify companies that it sees as having above-average growth potential. The $317.2-million fund’s top holdings are: TransCanada Corp., EnCana, Research in Motion, Bank of Nova Scotia, CN Railway, Potash Corp., BCE Inc., Canadian Natural Resources and Royal Bank of Canada. CIBC Canadian Equity holds 39.4% of its portfolio in resource stocks and 27.1% in finance stocks....

SCOTIA CANADIAN GROWTH FUND $41.09 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9269; Web site: www.scotiabank.com. No load — deal directly with the bank) attempts to use an investment’s fundamentals to determine whether it has the potential for above-average growth. The $315.8-million Scotia Canadian Growth Fund’s largest stock holdings include EnCana Corp., Royal Bank, TD Bank, BCE Inc., Potash Corp., Canadian Natural Resources, Suncor Energy, Bank of Nova Scotia and Barrick Gold. Scotia Canadian Growth holds 43.3% of its portfolio in the resource sector. Its next-largest segment is financial services, at 24.9%....

Brookfield Properties Corp., $7.14, symbol BPO on Toronto (Shares outstanding: 391.1 million; Market cap: $2.8 billion), owns, develops and manages office buildings in some of North America’s largest cities. Brookfield’s commercial portfolio consists of interests in 108 properties totalling 74 million square feet in the downtown cores of New York, Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa. Brookfield Asset Management (symbol BAM.A on Toronto), holds a 50% interest in Brookfield Properties. The other 50% trades on the Toronto exchange. Office buildings account for about 78% of Brookfield’s revenue, and residential housing accounts for about 22%. Brookfield’s residential land-development and homebuilding operations are mainly based in Alberta (42% of total acres), Texas (26%), Colorado (18%), Ontario (13%) and Missouri (1%)....

LOBLAW COMPANIES LTD. $31 (Toronto symbol L) wants to shift about 10% of its part-time workers to full-time status. Right now, part-timers account for 80% of Loblaw’s workforce. More full-time workers would increase Loblaw’s labour costs, particularly as most of them are unionized. But the company feels it will offset these extra costs by lowering the high turnover rate among part-time workers. Hold. ROYAL BANK OF CANADA $34 (Toronto symbol RY) has paid an undisclosed figure for the 50% of Commission Direct Inc. (CDI) that it does not already own. CDI sells independent research and brokerage services to institutional investors. Gaining full control of CDI should make it easier for Royal to sell more services to CDI’s high-quality clientele. Buy. THOMSON REUTERS INC. $30 (Toronto symbol TRI) plans to launch a new video-news service in June 2009. Unlike cable TV business news channels, this service will only be available to Thomson Reuters’ clients. Users will be able to search for news items on specific companies or topics and view them on a variety of devices, including cellphones. The service should help increase Thomson Reuters’ share of this highly competitive market. Buy.

FIDELITY GROWTH AMERICA FUND $11.98 (CWA Rating: Conservative) (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) uses a broad “bottom-up” approach to identify undervalued companies using fundamentals, such as earnings, dividend yield, book value, cash flow and debt level. The $160.2-million Fidelity Growth America Fund’s top holdings, among the 122 stocks it holds, include Exxon Mobil, Wal-Mart, Apple, Nuance Communications, Chevron Corp., Qualcomm, Bristol Myers Squibb, Coca-Cola, 3M and Phillip Morris International. Fidelity Growth America Fund is broken down by economic segment as follows: 13.9% in Information Technologies, 13.3% in Health Care, 11.9% in Energy, 10.3% in Consumer Staples, 9.1% in Financials, 8.7% in Industrials, 7% in Consumer Discretionary, 3.9% in Utilities, 3.5% in Telecommunication Services and 2.5% in Metals & Minerals....