Topic: How To Invest

Hi Pat: What is your recommendation on the iShares S&P/TSX Capped Information Technology Index Fund? Thanks.

Article Excerpt

iShares S&P/TSX Capped Information Technology Index Fund, $6.31, symbol XIT on Toronto (Shares outstanding: 4.9 million; Market cap: $30.9 million; ca.ishares.com), holds just six stocks in the information technology field. Its MER is 0.55%. The fund aims to mirror the performance of the S&P/TSX Capped Information Technology Index, which is made up of the largest information technology stocks in Canada. The weight of any one company is capped at 25% of the index’s market capitalization. Every three months, the fund’s managers look to see if the market cap of any given stock has risen above 25% (such as CGI Group, now at 27.0%—see below) of the total market cap of all the stocks in the index. If so, the fund will sell shares of that stock to bring its weight down to the 25% cap level. The fund then uses the proceeds of the sale to buy other stocks in the index on a proportional basis. The fund’s holdings are CGI Group at…