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While the recent downturn has hurt most stocks, it’s been particularly hard on manufacturing companies such as these five. That’s because they serve narrow markets or cyclical industries. However, all of them are doing a good job controlling costs, which will help them stay profitable until the economy improves. That should also let them keep paying above-average dividends. QUAKER CHEMICAL CORP. $17 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 million; Market cap: $180.2 million; WSSF Rating: Average) makes lubricants and specialty chemicals that protect industrial machinery from corrosion. The company recently raised its quarterly dividend for the first time since 2004, from $0.215 a share to $0.23. The new annual rate of $0.92 yields 5.4%....

IVY EUROPEAN FUND $12.72 (CWA Rating: Aggressive) holds mostly good quality stocks, although it has underperformed the longer-term benchmark Morgan Stanley indexes. We don’t see any reason to hold a mutual fund that concentrates in Europe. If you want European exposure, consider Ivy Foreign Equity Fund (see above), or the closed-end EUROPEAN EQUITY FUND $7.11 (New York symbol EEA; CWA Fund Rating: Conservative). European Equity Fund sells for an 18% discount from the current value of its assets. European Equity Fund is a buy. Ivy European Fund is a sell.

IVY FOREIGN EQUITY FUND $26.81 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 5.0%, and that was better than the Morgan Stanley benchmark’s gain of 1.7%. Ivy Foreign Equity Fund lost 2.2% 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 10% of the holdings of a conservative investor. The fund’s top holdings are PepsiCo (U.S. food & beverage), Reckitt Benckiser plc (UK household & healthcare products), McDonald’s Corp., Synthes Inc. (Swiss health care equipment), Walgreen Co. (U.S. pharmacies), Diageo plc (UK alcoholic beverages), Becton Dickinson (U.S. medical technology), Nestle SA, Henry Schein Inc., (U.S. healthcare) and Danaher Corp. (U.S. tools & controls)....

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 corporate mergers and takeovers in the mutual-funds industry, 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.)...

Today’s rebound in the market is reassuring, but I expect stocks to remain highly volatile for a month or more. After that, we could see a six-month rebound in prices. The U.S. bailout of major financial institutions raises inflation risk over the next few years, but it heads off panic. Nobody can predict market bottoms, but I suspect we are much closer to the bottom than the top. BANK OF AMERICA CORP. $37.48, New York symbol BAC, has agreed to acquire troubled brokerage firm Merrill Lynch & Co., Inc. (New York symbol MER). Based on current prices, Bank of America will pay about $49 billion in stock. That’s equal to 29% of its market cap of $170.9 billion. The addition of Merrill will greatly expand Bank of America’s retail brokerage and wealth management operations. Including Merrill’s 16,000 brokers, the merged company will be the world’s largest brokerage firm, with 20,000 brokers and $2.5 trillion in assets under management. Bank of America will probably keep the Merrill Lynch brand, and operate it as a separate division....

TEMPLETON GROWTH FUND $10.46 (CWA Rating: Conservative) (Franklin Templeton Management Limited, 1 Adelaide Street East, Suite 2101, Toronto, ON. M5C 3B8. 1-800-387-0830; Web site: www.templeton.ca. Buy or sell through brokers) follows the approach that paid off so well for so long under its founder and long-time manager, John Templeton. His successors look for bargains, avoiding fads and paying close attention to company fundamentals. Templeton Growth Fund is invested 26.7% in the U.S., 18.4% in the UK, 6.7% in the Netherlands, 6.3% in Japan, 5.2% in Singapore, 4.0% in Germany, 3.8% in Spain, 3.5% in Italy, 3.5% in South Korea and 3.5% in Switzerland. The $3.7 billion fund’s top holdings include Royal Dutch Shell plc (Netherlands oil & gas), DBS Group Holdings (Singapore-based banking), ING Groep NV (Dutch financial services), Eni SpA (Italian oil & gas), El Paso Corporation (U.S. oil & gas), Telefonica SA (Spanish telecommunications), GlaxoSmith- Kline plc (UK pharmaceutical), Lonza Group AG (Swiss chemicals and biotechnology), Deutsche Post AG (German postal and courier services) and Reed Elsevier NV (Netherlands publishing & data)....

TRIMARK FUND $28.55 (CWA Rating:Conservative) (AIM Funds Management Inc., 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.aimfunds.ca. Buy or sell through brokers) takes a value-seeking investment approach, and this cuts its risk. This fund sticks to the long-time Trimark Investments approach to stock-picking — buying high-quality investments and holding them for the long term. That Trimark Investments strategy eventually gives investors steady returns, with below-average risk. The $4.2 billion Trimark Fund’s top 10 holdings are Nestle SA (Swiss food & beverages), Nokia (Finnish mobile phones), Novartis AG (health care and pharmaceuticals), Reed Elsevier NV (Netherlands publishing & data), Grupo Televisa SA de CV (Mexican television & media), Anglo-Irish Bank Corp. (Irish banking), WPP Group plc (UK marketing & advertising), Adidas AG (German sporting goods & apparel), Willis Group Holdings (UK insurance) and Accor SA (French hotels & business services). Regionally, the fund’s portfolio is now distributed 28.9% in the U.S., 16.3% in the UK, 16.1% in Switzerland, 7.6% in Ireland, 7.0% in Germany, 5.3% in Finland and 3.9% in France. The MER for this fund from Trimark Investments is 1.62%....

KRAFT FOODS INC. $29.38, New York symbol KFT, has finalized its agreement to merge its Post cereals business with Ralcorp Holdings Inc (New York symbol RAH). Kraft is now giving its own investors an opportunity to exchange some or all of their shares for a holding in Ralcorp. The company designed the offer so that its investors get to acquire Ralcorp at a 10% discount. Kraft believes the swap will be tax-deferred, but the IRS has yet to make a final ruling. Kraft will limit the exchange ratio to 0.6613 of a Ralcorp share for each Kraft share tendered. Kraft will calculate the final exchange ratio before the offer expires on August 4, 2008. Following the exchange, Kraft investors will own roughly 54% of Ralcorp....

ISHARES MSCI JAPAN INDEX FUND $12.25 (American Exchange symbol EWJ; buy or sell through a broker) is an exchange-traded mutual fund that tries to match the return of the MSCI Japan Index (Morgan Stanley Capital International Japan Index). The MSCI Japan Index is a benchmark for Japanese equity performance. The iShares Japan Index Fund charges a fee of 0.59% of assets. The fund’s top holdings are: Toyota Motor at 5.0%; Mitsubishi UFJ Financial Group, 3.2%; Canon Inc., 2.1%; Nintendo Co., 2.0%; Sumitomo Mitsui Financial, 2.0%; Honda Motor, 1.9%; Mizuho Financial Group, 1.8%; Sony Corporation, 1.8%; Takeda Pharmaceutical, 1.7%; Matsushita Electric Industrial, 1.7%; and Mitsubishi Corp., 1.7%. Japanese stock markets remain volatile along with global markets. However, overall, we think that Japan’s economy will keep growing and push stock prices up....

ISHARES MCSI CANADA INDEX FUND $33 (American Exchange symbol EWC; buy or sell through brokers) is almost a market-cap based index fund, but it tinkers with the index fund formula to try and improve performance by using its proprietary Morgan Stanley Capital International Canada Index. The U.S.-based fund also has to work around foreign ownership restrictions. iShares MCSI Canada Index Fund is managed by Barclays Global Investors and has an MER of 0.54%. We think if you want to own a Canadian index fund then you should buy the iShares CDN LargeCap 60 units. You’ll pay about a third of the management fees....