stock exchange

Global stock market investing still remains riskier in many ways than investing in North America. That’s because many foreign countries, particularly China and other emerging markets, have language barriers and weaker investor-protection laws. They may also have less commitment to openness, fairness and so on. You can lower your risk by sticking with American Depositary Receipts (ADRs). An ADR is an investment unit for foreign companies that trade on U.S. stock markets. These units can represent fractions of shares, whole shares or multiple shares in the foreign company. They help investors simplify their international investing by letting them buy foreign shares on U.S. exchanges without the complications of foreign transactions....

Exchange-traded funds (ETFs) are one of the more benign financial innovations to come along in the past few years. ETFs are set up to mirror the performance of a stock-market index or sub-index. 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. Investors can buy them on margin or sell them short. The best ETFs offer well diversified, tax-efficient portfolios with exceptionally low management fees....

FPL GROUP INC. $47 has raised its quarterly dividend by 5.8%, to $0.50 a share from $0.4725. The new annual rate of $2.00 yields 4.3%. Florida power regulators recently rejected most of the rate hikes that the company requested for 2010. However, FPL gets just over half of its earnings from its non-regulated businesses, such as its NextEra Energy Resources subsidiary. NextEra is the largest operator of wind and solar-power projects in the U.S. Buy. CONAGRA FOODS INC. $25 will buy back $500 million of its stock. That’s equal to 5% of its $10.9-billion market cap. There is no deadline for these purchases. Best Buy. T. ROWE PRICE GROUP INC. $51 continues to benefit from rising stock markets. That’s because its fee income rises and falls with the value of the mutual funds it manages. Thanks to its improving outlook, the company has raised its dividend by 8.0%. The new annual rate of $1.08 a share yields 2.1%. Hold....

Medusa Mining, $2.85, symbol MLL on Toronto (Shares outstanding: 170.4 million; Market cap: $485.6 million), owns and operates the Co-O gold mine in the Philippines. Aside from trading on Toronto, Medusa has been listed on the Australian Stock Exchange since 2003. The Co-O mine produces around 65,000 ounces of gold per year. Medusa is expanding Co-O, and aims to raise its output to 100,000 ounces per year later this year. Medusa Mining faces political risk in the Philippines, especially in Mindanao, where its mine is located, and where Muslim rebels continue to battle the government for independence. The stock is okay to hold, but only for highly aggressive investors....

We think the long-term outlook for China — and Chinese stocks — is strong. That’s because the country’s huge population is generally younger than North Americans, and large numbers of Chinese have the potential to advance from poverty into the middle class. (One of the best ways for investors to tap into Chinese growth is through low-fee exchange-traded funds. The iShares FTSE/Xinhua China 25 Index Fund is one example of an exchange traded fund that focuses on China. You can get our very latest buy/sell/hold advice on this fund in the latest issue of Canadian Wealth Advisor. See below for further details. )

Political instability still a danger to foreign investors in China

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Atlantic Power Corp., $11.93, symbol ATP on Toronto (Shares outstanding: 60.4 million; Market cap: $720.6 million), owns interests in 12 power plants located near large U.S. cities in Florida, California, New Jersey, New Mexico, Maine, Texas and Washington State. These plants have a total generating capacity of 1,823 megawatts; Atlantic Power’s share is 807 megawatts. The company also owns an 84-mile (135 kilometre) power-transmission system in California. The Caisse de Dépôt et Placement du Québec owns 19% of the company. Atlantic Power originally set itself up as a type of income trust in 2004. But unlike most trusts, it issued Income Participating Securities instead of regular trust units. Each Income Participating Security consisted of one common share and one debt security. This structure made it easier for U.S.-based corporations like Atlantic Power to gain access to Canada’s income-trust market. Atlantic Power first sold Income Participating Securities to the public for $10.00 each, and began trading on November 18, 2004. In response to Ottawa’s plan to tax income trusts starting January 1, 2011, Atlantic Power converted to a regular corporation on November 27, 2009. Investors received one common share for each Income Participating Security they held....

ISHARES S&P INDIA NIFTY 50 INDEX FUND $25.51 (Nasdaq symbol INDY; buy or sell through brokers), is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities on the National Stock Exchange of India. The fund’s top holdings are: Reliance Industries (conglomerate), 13.0%; Infosys Technologies (software), 7.9%; ICICI Bank, 6.9%; Larsen & Toubro Ltd. (conglomerate), 6.7%; ITC Ltd. (conglomerate), 4.7%; HDFC Bank, 4.3%; State Bank of India, 4.1%, Oil & Natural Gas Corporation, 3.0%; and Tata Consulting Services (information technology), 2.4%. The fund’s industry breakdown is as follows: Banks, 17.1%; Refineries, 13.5%; Computers: Software, 12.1%; Engineering, 6.7%; Steel and Steel Products, 4.9%; Finance: Housing, 4.9%; Cigarettes, 4.7%; Power, 4.5%; Automobiles, 4.1%; and Electrical Equipment, 3.9%....

ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $51.79 (New York Exchange symbol ECH; buy or sell through brokers), is an ETF that aims to track the MSCI Chile Investable Market Index. This index consists of stocks that are mainly traded on the Santiago Stock Exchange. The fund’s top holdings are Empresas Copec SA (conglomerate), 12.9%; Empresa Nacional de Electricidad (electric power), 10.6%; Sociedad Quimiday Minera de Chile (mining), 7.3%; Empresas CMPC (pulp and paper), 7.2%; Cencosud SA (retailer), 5.2%; Banco Santander Chile (banking), 4.7%; CAP SA (iron-ore mining and steel), 4.3%; Lan Airlines SA (Chilean national airline), 4.2%; and Colbun SA (electric power), 3.9%. The fund’s industry breakdown is as follows: Utilities, 28.4%; Materials, 20.1%; Industrials, 19.3%; Consumer Staples, 9.9%; Financials, 8.9%; Consumer Discretionary, 7.8%; Telecommunication Services, 4.3%; Information Technology, 1.0%; and Health Care, 0.3%....

ETFs have added to their advantages over closed-end funds over the last few years. That’s because ETFs have evolved, and competition has increased. Still, there are a lot of ETFs that have been created to tap into popular, but risky, themes and fads, so you need to be very selective with your ETF holdings. But the best ETFs offer a great combination of low fees and top-quality stocks. Below are five foreign ETFs we like. All have recovered from their lows earlier this year, but we think they still have room to rise. ISHARES MSCI EMERGING MARKETS INDEX FUND $41.85 (New York Exchange symbol EEM; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Index....

Exchange-traded funds (ETFs) hold baskets of stocks that represent stock indexes. They trade on stock exchanges, just like stocks. Unlike many other innovations, including many mutual funds, ETFs don’t load you up with high management fees, or tie you down with heavy redemption charges if you decide to take your money out. Instead, they give you a low-cost and more flexible and convenient alternative. ETFs also have advantages over closed-end mutual funds. They are more liquid than most closed-end funds, and have lower management fees. Moreover, ETFs consistently trade at or very close to net asset value, unlike closed-end funds, which often go through wide swings in their discounts or premiums to the value of their assets....