Volume 15, Number 5
May, 2009
Single Issue $15.00

In this issue:

PDF version of this issue

What's New

♦ THE MONEY MARKET CRUNCH. Short-term interest rates are now so low that some money market funds (MMFs) showed zero return for the 30 days to May 1. The danger now is that, once fees and expenses are taken into account, a few of these funds could fall into negative territory.

That would be a disaster for the fund industry. MMFs are regarded as safe havens by investors, places where they can park their cash without risk while waiting out stock market downturns. Unit values are fixed at $10 and no Canadian money fund has ever broken that, to the best of my knowledge.

According to the Investment Funds Institute of Canada (IFIC), investors held almost $75 billion in these funds as of the end of March. That represents about 15% of the total amount invested in mutual funds offered by IFIC members.

However, new inflows have slowed dramatically this year as short-term rates keep dropping. In January, MMFs recorded almost $2.5 billion in new net sales and reinvested distributions. The February number dropped to about $1.7 billion and in March it was down to $520 million. It would not be a surprise if the April figure comes in showing net redemptions.

That would be bad enough but think of what would happen if money funds started to report negative returns. There would be a huge run on them, which could be highly disruptive to the industry. That explains why we're starting to see announcements about MMF fees being cut in an effort to keep returns in the black.

One of the first out of the gate was Fidelity Investments which has announced it is waiving a portion of the management fees it charges to MMFs and short-term fixed income funds so as "to maintain a positive yield for investors". The company has also served notice it will reduce the trailer fees paid to financial advisors on these funds if necessary.

No specifics were given for the amount of the fee reduction. The company simply says the cuts "will be implemented gradually as required". The affected funds include Fidelity Canadian Money Market Fund, Fidelity Canadian Short Term Income Class, Fidelity Premium Money Market Private Pool, and Fidelity U.S. Money Market Fund. However, not all classes of units will immediately benefit; the initial reductions will be made to units with the highest management expense ratios, which are the A and C units. Fidelity says it will not change the way in which it manages the funds in an effort to enhance yields.

In a Q&A accompanying the announcement, Fidelity says that its managers expect that "rates will continue to fall to levels that will be lower than the fees we assess on some series of our money market funds" and that the steps it is taking are required to maintain a positive return.

"We can state unequivocally that Fidelity's money market funds continue to provide security and safety for our customers' cash investments," the company said. "Our funds continue to invest in money market securities of high quality, and our customers continue to have full access to their investments any time they wish. Protecting the $10 net asset value has always been our #1 objective in managing these funds".

This is all fine and I expect we'll see other fund companies taking similar action going forward. However, don't lose sight of the fact that the only commitment being made is to maintain a positive return. That could conceivably be as little as 0.1% over the next 12 months. It's time to look at other alternatives.

♦ SURPRISE! Amidst the stock market carnage of the past six months, I was surprised to find a couple of funds that actually turned a profit in one of the industry's weakest categories: Retail Venture Capital, formerly known as Labour-Sponsored Venture Capital. These are the funds that became immensely popular in the 1990s because of the great tax breaks they offered. Then the tech bust knocked the stuffing out of them and the sector has been a wasteland ever since.

As a group, the track record of these funds is pathetic. They show a losing average for all time frames out to 15 years. However, it turns out that a few are making money for their investors, which gives these folks a double benefit: tax savings plus profits.

One of them is the B.E.S.T. Total Return Fund which invests in a diversified portfolio of small to mid-cap common and preferred stocks, bonds, and cash. It managed a small gain of 0.42% in the six months to March 31 while the average fund in the category was losing 10.1%. That was no fluke. Over the past three years, the fund has generated an average annual gain of 6.8% which is better than most equity funds have done in that time frame. The fund is available everywhere except Quebec, Nova Scotia, and the Territories.

The Covington organization has also produced some winners in recent years. The best result was turned in by the Covington Venture Fund IV – New Mile with a three-year average annual return of 16.5%. However, it is no longer sold. The Covington Strategic Capital Fund, which has averaged +11% over the past three years, can still be bought by Ontario residents, however.

B.C. residents have done well with the GrowthWorks Working Opportunity Commercialization 05 shares which gained an amazing 21.8% in the latest 12-month period, according to Globefund.

Finally, if you live in Saskatchewan take a look at the SaskWorks Venture Fund, which focuses on small and medium-size businesses in that province. It has two components: SaskWorks Resources Fund and SaskWorks Diversified Fund. The Resources Fund showed a three-year average annual compound rate of return of 8.4% as of March 31 while the more broadly-based fund was ahead by 6.9% a year.

It is important to keep in mind that the funds I have mentioned are exceptions to the general rule that most entries in this category lose money. But if you hit the right one, you can do quite well for yourself.

♦ CORRECTION. In the April issue, we gave the wrong trading symbol for the iShares CDN Short Bond Index Fund. The correct symbol is XSB. My apologies for any inconvenience.

 

Return to the table of contents...

TD FUNDS: THE GOOD AND THE BAD

Canadians have invested more than $46 billion in funds offered by TD Asset Management. But have they made the right choices?

An e-mail arrived last week from a friend of mine. He wrote: "My mother has an estate account at TD Waterhouse and they want to invest the proceeds of the account in four funds. I’m rather skeptical about it and as such am doing background checking. These are the funds: TD North American Dividend, TD International Equity, TD Canadian Bond, and TD Global Bond. Would you be able to provide me with some information?"

I am always glad to help a friend but the e-mail also reminded me that I had not taken an in-depth look at the TD line-up in a while. Canadians have some $46 billion invested in the company's funds, making it the third-largest group in the country so I figured a lot of readers would be interested in my findings.

Let's start by looking at the four funds that were recommended to my friend's mother. Since she is probably over 60, her portfolio should be designed to protect her capital while providing decent cash flow. Based on that, only one of the funds selected is a good fit: TD Canadian Bond, which is on the MFU Recommended List. It's a well-managed no-load entry with a long record of above-average performance going back more than 20 years.

Over the 12 months to March 31, the fund almost exactly matched the category performance (+1.6%). However, that was actually a better result than it may appear because the portfolio was underweight government bonds, which were big winners in the fall of 2008. I expect the returns to be much stronger in 2009 because the fund is heavily tilted towards corporate issues (about 63% of the total), which have been looking better recently. We can see evidence of this in the first-quarter results which showed the fund with a 1.6% gain over the three months to March 31. That was 50 basis points better than the peer group average.

The TD Global Bond Fund isn't a bad choice if the idea is to add a small holding for diversification purposes. Like all foreign bond funds, it turned in strong results in the latter half of 2008, thanks to two factors: a sharp drop in the value of the loonie and a strong move to government bonds by investors as stock markets crashed around the world. This fund holds 65% of its assets in government issues so it was a major beneficiary of the twin trends, scoring a six-month gain of 17% over the period to March 31. But results like that are rare in the bond fund world and it is highly unlikely we'll see a repeat going forward. In fact, with the Canadian dollar moving higher and government bonds viewed as overpriced, the fund gave back 4.5% in the first four months of this year.

Moreover, it's a poor choice for anyone seeking cash flow. Distributions are paid quarterly and are very uneven, ranging from 1.7c (second quarter 2008) to 84.6c per unit (fourth quarter 2008) over the past 12 months. That combined with the volatility make it a questionable choice.

As for the two equity funds on the suggestion list, I give both a thumbs-down with a rating of only $. Despite its blue-chip line-up, TD North American Dividend Fund is a sub-par performer over all time periods with a shocking average annual loss of almost 7% over the past decade.

If anything, TD International Equity is an even worse choice. Its returns have been consistently below average for the category over all time periods, despite numerous managerial changes. As a result, I don't advise putting it on your buy list unless you think that an average annual return of 0.6% over 20 years looks good. To make matters worse, the fund offers no cash flow; there has not been a distribution paid since December 2007. Shockingly, this fund has $592 million in assets under management. Some investors are clearly not paying attention!

So if two of the four picks are unacceptable and one is dubious, what else is there in the TD line-up that might be suitable for a person in this position? Here are some suggestions.

TD Canadian Index Fund. There should be some equity exposure in every portfolio although the older you are the less it should be. This fund offers a low-cost way to achieve that with a management expense ratio of only 0.84% (even less it you choose the e-units). Since it tracks the S&P/TSX Composite Index, it is coming off a bad year, with a loss of 32.9% for the 12 months to March 31. However, that was better than the average for the Canadian Equity category and in fact this fund has outperformed the peer group over all time frames going back 20 years. As markets recover going forward, this fund will offer good capital gains potential. However, there is only one distribution per year so income investors will want to look elsewhere.

TD Monthly Income Fund. This fund offers a good blend of blue-chip dividend paying stocks (e.g. banks, Enbridge), quality bonds, and a few income trusts. No fund with any equity holdings (this one has 56% of its assets in stocks) escaped the ravages of the market collapse but that's hopefully behind us. Looking ahead, this fund is a good choice for a low-risk portfolio in which cash flow is important. The fund pays monthly distributions of 3c a unit, which was scaled back from 4c in January to preserve cash and protect the fund's NAV. At the current valuation of $13.22, that projects to a cash yield of 2.7% over the next year. It's not a lot but it beats GICs and the fund also offers capital gains potential; as of May 1 it was ahead 7.5% year-to-date.

TD Mortgage Fund. This is one of those funds that sits in a portfolio not doing much of anything for years and then all of a sudden makes you feel incredibly smart for not having sold it. Since 2003, the best calendar year return was a meagre 3.2% in 2005 – until last year, that is. That's when this wallflower turned into a rose, recording a gain of 7.4% in 2008 just at a time when most portfolios needed a boost.

In normal times, funds like this are just one step up on the risk scale from money market funds. They offer a safe haven for investors but the trade-off is minimal returns. But these days, conditions are anything but normal and in recent months investors have been enjoying both safety and profits. The fund pays monthly distributions which can vary considerably. Over the 12 months to April 30, investors received a total of $1.99 per unit for a yield of 3.3%.

A word of caution: don't expect another 7.4% return in the next 12 months. That's most unusual. Still, the fund is off to a good start this year, with a gain of 3.8% to May 1. That sure beats a money market fund.

TD Short Term Bond Fund. This fund will fit very nicely in an RRSP or RRIF and in normal years should provide a better return than you'd get from a money market fund or a GIC. The fund invests in short- to medium-term (up to three years) high-quality securities. Just over 30% of the portfolio is in government issues with the rest in good-quality corporates such as Scotiabank, Suncor, and Toyota Credit Canada.

The fund gained 5% in the year to March 31. All longer-term results are also above average, with the 10-year number coming in at 4.6% annually. The fund makes monthly distributions which vary in amount. Over the year to April 30 the total payout was 33c per unit. The minimum initial investment is only $100. Risk is about average for a fund of this type but very low compared to bond funds generally. The fund has not had a losing year since at least 1998. The rating is maintained at $$$$.

TD Dividend Growth Fund. Finally, let's consider a fund that has been through some rough times recently but could provide some strong upside potential going forward. This fund focuses on dividend-paying stocks with growth potential and is heavily weighted to the financial sector, which accounts for about half of the total assets. Bank and insurance companies were among the hardest hit in the stock market slide and this fund lost 28.4% in the year to March 31. But we're starting to see a bounce back and the fund was up 5.9% year-to-date as of May 1. Major holdings include all the big banks, Canadian Oil Sands Trust, Telus, Manulife Financial, and TransCanada Corp. The fund pays quarterly distributions which can vary considerably so it is not a good choice if dependable cash flow is needed. But if you're looking for a quality equity portfolio, growth potential, and an above-average long-term track record, this is a good candidate to consider.

The Bottom Line: Unless you have absolute confidence in your advisor, don't accept any recommendations without doing your own homework. As we have seen in this case, there were much better choices for my friend's mother than the funds that were selected for her by TD Waterhouse.

 

Return to the table of contents...

MODEST RECOVERY

Our equity and balanced funds are finally starting to turn around but it will take time to regain the losses.

The early spring stock market rally was good news for our equity and balanced funds which finally registered a couple of months of gains after the lenthy slide that began last June.

There is still a long way to go before we can think about recovering the ground lost in the market meltdown but, hopefully, the worst is behind us. There will be ups and downs going forward, of course, but we should see gradual improvement in our fund fortunes over the next couple of years.

In the meantime, our bond funds continue to do well so those of you with well-balanced portfolios have been able to offset some of the equity losses. Funds with an emphasis on government bonds have been especially strong, such as the RBC Canadian Bond Index Fund, which we now recommend selling. Those funds that are weighted towards corporate fixed-income securities are now starting to come into their own, as we expected would happen.

Apart from the stock market rally, the most important news since our last review was the decision of the Bank of Canada to cut its key overnight lending rate to 0.25%, the lowest in history, and the pledge to hold that rate for the next year. In practical terms, this means that retail investors should expect almost zero returns from money market funds for the foreseeable future. That's why we are advising the sale of the two MMFs on our Recommended List this month. Both are great funds but there is no point paying a fund company a fee to earn a return that will probably be well below 1%.

We also have a couple of other sell calls this month. Here's a rundown.

This month's sells

Phillips, Hager & North Canadian Money Market Fund. This is a great fund with a better than average track record over all time frames. So why do we advise selling it? Simple: with short-term interest rates near zero and likely to remain there for a while, your return over the next year will be minimal. Switch to the companion PH&H Short Term Bond and Mortgage Fund which should do somewhat better while carrying only slightly more risk.

RBC Canadian Money Market Fund. The same comments apply to this money fund. The RBC Canadian Short Term Income Fund is a better choice at this time.

RBC Canadian Bond Index Fund. We've done well with this fund, scoring an 8% profit in the year to March 31. But it's time to move on. The reason is that the fund tracks the performance of the RBC DS Government of Canada Bond Market Index, which means it invests exclusively in bonds issued or guaranteed by the federal government. These have become seriously overpriced in recent months and there are signs a correction is taking hold. Exit now and take profits. If you want to stay within RBC, look at the RBC Bond Fund which has 54% of its assets in corporate issues.

Mutual Discovery Fund. Deep value investing isn't working in these markets, mainly because of the repricing of value and risk that we have seen. There will be a time when a fund like this will outperform once again but hanging on to it now is counter-productive.

As mentioned earlier, bond funds have been doing well but it is important to remember that there are different types of fixed-income funds and some are better suited than others to the current situation. Make sure that you have the right type of funds in your mix. Here are comments on three of the bond funds on the Recommended List.

Scotia Global Bond Fund. When we recommended this fund in February, we noted it had been on a great run but that it was vulnerable to a rise in the value of the Canadian dollar. We've seen that recently, with a negative impact on returns. For now we are changing our guidance from buy to hold and we will continue to monitor the fund closely.

Phillips, Hager & North Total Return Bond Fund. We picked this fund last August because we believed that corporate bonds (which are the fund's heaviest weighting) were seriously undervalued. When they recovered, we felt this fund would outperform its peer group by a significant margin. It took a little while but now an investment here is paying off. The fund gained 2.2% in March and added another 1.4% in April, both good moves for a bond fund.

Phillips, Hager & North Short Term Bond and Mortgage Fund. Even with short-term interest rates near zero, the managers of this quality fund are still managing to generate profits for their clients. The fund gained 2.1% in the first quarter of 2008, a surprisingly strong gain for the category. This is a much better choice than any money market fund at present.

In summary, we continue to advise caution and recommend that readers maintain a strong fixed-income component in their portfolios. A stock market pullback during the summer is possible but a good showing by corporate bonds will help to offset that. Make sure you are properly positioned.

Here is an update on all our active mutual fund recommendations. We will review our ETF picks in next month's issue. All results are to March 31.

(V denotes funds that use a value style; G signifies a growth style.)


Return to the table of contents...

JUNK BOND FUNDS SURGE

Big gains in April reverse some of the losses suffered during the fall and winter.

Junk bond funds (or high yield fixed income funds as they are more politely known) are inherently risky. In most cases, the managers invest in bonds that are rated below investment grade and therefore carry a greater risk of default.

The reward is high yields and the potential for capital gains down the road. The danger is that the bonds may become worthless, or close to it. You don't have to look far for examples: any fund that held bonds issued by General Motors, GMAC, Chrysler, or Abitibi-Bowater has taken a hit on those positions.

Last fall and winter, as investors went into panic mode over the possibility of a depression, people were pumping money into the safest securities they could find: government bonds. The junk bond market crashed as spreads widened to historic levels. (The spread is the difference in the yield on two bonds of comparable maturities.) Almost all high-yield bond funds posted losses over the six months to March 31, many of them in double-digit territory.

To cite a few examples, Altamira High Yield Bond Fund fell 19.7% during that six-month period and it was far from the worst performer. Trimark Global High Yield Bond Fund was down 21%, TD High Yield Income Fund gave back 29.7%, while the Chou Bond Fund lost an amazing 34% in a free-fall that was almost unprecedented in Canadian bond fund history (manager Francis Chou refunded his fee to unitholders because of the bad performance).

There weren't many bright spots. One of the few was the Fidelity American High Yield Fund which gained 4.3% during the period and managed to eke out a 3.9% profit over the full year compared to an average loss of 13.1% for the category. However, the main reason this fund looks good by comparison to the others is that unitholders benefited from the decline in the Canadian dollar against the U.S. greenback during the period. The fund invests almost exclusively in U.S. bonds. A currency-neutral version of the same fund lost more than 13%.

April brought a change in fortune to this fund category, however. As fears of a depression eased and early signs of a recovery began to emerge, the spreads between junk bonds and government issues started to narrow. This had the effect of pushing up the prices of bonds held in these portfolios, with the obvious exception of those issued by companies that were heading to bankruptcy court. For the most part, the biggest beneficiaries were the funds that had taken the largest hits in the previous six months. Altamira High Yield Bond was up 10.2% in the 30 days to May 1 while TD High Yield Income gained 12.4%. Not a single high-yield bond fund lost money during the period.

So what can we expect next? Let's start with some basics. The Canadian Investment Funds Standards Council (CIFSC) defines high yield fixed income funds as those that "invest primarily in fixed-income securities with a non-investment-grade credit rating, such that their average credit quality is below investment grade (Lower than BBB or equivalent)". However, the definition goes on to state that funds that have more than 25% of their portfolio in high yield securities also qualify for inclusion.

That creates the potential for huge differences in the risk/return profiles of the funds in this category, which investors have to sort through. A bond fund with a 30% high yield weighting is clearly a more conservative choice than one that invests exclusively in junk bonds.

As well as portfolio composition, you need to take a close look at the currency exposure in each fund under review. As we saw in the case of the Fidelity American High Yield Fund, the decline of the loonie against the U.S. dollar boosted the returns of funds which invest mainly in American bonds. With the loonie recently showing some strength, these are not the type of funds you want to be holding at this stage.

Most investors will probably feel more comfortable with a fund such as Phillips, Hager and North High Yield Bond Fund, for several reasons. For starters, 69.7% of the portfolio is in securities rated BBB or higher with another 8.4% in cash. So while there is some junk bond exposure, the risk factor is greatly reduced. Because most of the bonds in this fund are denominated in Canadian dollars, currency risk is eliminated from the equation. The fund's performance is above average over all time periods and the quarterly distributions provide steady cash flow for income-oriented investors. The fund has an above-average record over all time periods, with an average annual five-year rate of return of 4.5% (D units). The MER is a low 0.93% (1.19% for the B units, which are sold by advisors).

If you prefer a global corporate bond fund with more currency diversification than the PH&N entry, take a look at the RBC Global Corporate Bond Fund. Just over half its assets are invested in U.S. dollar securities with 30.7% in Canadian dollar bonds and the rest scattered around. You may not like some of the names on the list of top 10 holdings such as Citigroup and General Electric Capital. But the offset is that 83% of the portfolio is held in investment grade corporate bonds. So the risk appears to be well controlled.

That shows up in the performance record. Over the year to March 31, the fund finished just below break-even, with a loss of 0.1% and it was a first-quartile performer in both 2007 and 2008. Distributions are paid quarterly.

If these funds are too conservative for your taste, you can try rolling the dice with the no-load Altamira High Yield Bond Fund which is a true junk bond fund (no holdings rated higher than BB). But be prepared for a lot of volatility. Our advice would be to try to grab some quick profits and then rotate into something else. This is definitely not a buy and hold fund.

The Bottom Line: High-yield bonds are on a roll right now but there is no way of knowing how long the winning streak will continue. Approach with caution.

 

Return to the table of contents...

YOUR QUESTIONS

 

What's wrong with bonds?

Q - I assumed that with the falling interest rates that bond funds would rise. Am I wrong with this assumption and, if not, why haven't bond funds performed better? – Josephine B.

A – You aren't wrong in the basic assumption. The problem is that we are not living in normal times. Government bonds have responded to the falling interest rate climate as you would expect, with prices rising. The evidence for this can be seen in the iShares CDN Government Bond Index Fund (TSX: XGB) which gained 7.1% in the six months to March 31. That's a significant move for a bond fund in a relatively short time.

Corporate bonds are a different story. The recession and accompanying credit crisis raised concern about default risk in these issues, resulting in the widest yield spreads we have ever seen compared to government bonds. In effect, corporate interest rates rose, driving their bond prices lower.

I have said on several occasions that this was overdone and we are now seeing evidence of that. Corporate bond prices have recovered to some extent recently and the iShares CDN Corporate Bond Index Fund (TSX: XCB) gained 3.4% in the first quarter of this year. I believe this trend will continue. As for government bonds, with interest rates at rock bottom I don't see a lot more upside for them going forward.

The bottom line is that if you want to invest in a bond fund at this stage, choose one that is weighted to high-quality corporate issues. – G.P.

Discouraged from switching

Q – My husband and I have all our money invested through CIBC portfolio management and have a range of different mutual funds through them. I wanted to use a different portfolio management company for my investments so we have a comparison and can see who is giving the better result. I’ve been told it’s best to keep our portfolio with one manager and switching now would result in even more losses. Is this correct? – A.G.

A – Of course they would tell you that. Why would they encourage you to take some of your business elsewhere? Ignore them and do what you think is best. I have never advised keeping all your money in one place for a number of reasons – one of which is the one you cite, the ability to compare results.

I fail to understand the suggestion that by switching you'll lose even more money. You should ask what their rationale is for that comment. It's true you will lock in capital losses if you sell the funds to make a switch (and can claim those on your 2009 tax return). But those losses have already been incurred. Once the switch is complete you will use the cash to buy new securities which hopefully will increase in value over time. – G.P.

BMO Monthly Income Fund

Q – I hope you can help me to understand a bit more about income funds. I own some BMO Monthly Income Fund which gives a distribution monthly in the form of capital return, interest, dividends, and capital gain. Now the market has not been great but BMO continues with the distribution. Can it be that the monthly distribution I am receiving is my own capital investment? If so, it can be exhausted down the road. I hate to sell the fund now as I don't want to accept the loss. Please explain how the bank manages this kind of fund. – Helen C.

A – Your suspicions are correct – you are indeed being paid with your own money. Over the 12 months to April 16, investors received a total of 72c a unit in distributions. But during that time, the fund's net asset value fell from $9.26 to $7.49 per unit, a decline of $1.77. So the situation was worse than just getting back your own money – you actually lost 13.6% over that time.

Of course, as you note, this can't go on forever. The fund will be forced to reduce its payments if it cannot generate enough profit to sustain them. The good news is that things have been looking better recently and the fund was ahead by 2.3% for 2009 as of May 1. So don’t be too quick to sell just yet. – G.P.

 

Return to the table of contents.

RATINGS CHANGES

NEWCOMERS

iShares CDN Materials Sector Index Fund $$$
Many investors aren't quite sure what the term "materials" means when applied to investing. Stick the word "raw" in front of it and you'll understand. This fund does not invest in energy stocks but the rest of the resource sector is covered. Most of the stocks in the portfolio are in the gold and base metals sectors but you'll also find a couple of forestry companies and fund heavyweight (18.2% of assets) Potash Corporation of Saskatchewan. The fund produced terrific gains in 2006 and 2007 (48.4% and 29.5% respectively) but then dropped 26.8% in the crash of 2008. So far, it hasn't done much in 2009 but when stock markets rebound it will generate large profits again. The MER is only 0.55% making this a very inexpensive way to play this popular sector. But don't invest here if you can't handle volatility. This fund will have a lot of ups and downs along the way. The trading symbol on the TSX is XMA.

iShares CDN Dividend Index Fund $$
This ETF tracks the performance of the Dow Jones Canada Select Dividend Index which is comprised of 30 of the highest yielding, dividend-paying companies in the Dow Jones Canada Total Market Index. Normally, you'd expect a fund that specializes in dividend-paying stocks to be very low risk. However, that was not the case here when the financials sector was slammed by the credit crisis and the market sell-off of 2008. Two-thirds of this fund's portfolio is invested in financial stocks so it should not come as a shock that investors lost 30.5% in the year to March 31. What will be a surprise is if that happens again, in fact, we think this fund may do very well in the next 12 months as confidence returns. While you're waiting, you'll collect a decent quarterly distribution which totaled 79c a unit in 2008. We're giving this fund an initial rating of $$ but that should improve as the markets come back. The MER is only 0.5% and the units trade on the TSX under the symbol XDV.

 

Return to the table of contents...

Mutual Funds Update
Editor and Publisher: Gordon Pape
Circulation Director: Kim Pape-Green
Customer Service: Katya Schmied, Terri Hooper
 

Gordon Pape’s Mutual Funds Update is published monthly.

Copyright 2009 by Gordon Pape Enterprises Ltd.

All rights reserved. Reproduction in whole or in part without written permission is prohibited. All recommendations are based on information that is believed to be reliable. However, results are not guaranteed and the publishers and distributors of Mutual Funds Update assume no liability whatsoever for any material losses that may occur. Readers are advised to consult a professional financial advisor before making any investment decisions. Contributors to the MFU and/or their companies or members of their families may hold and trade positions in securities mentioned in this newsletter. No compensation for recommending particular securities or financial advisors is solicited or accepted.

Mail edition: $124.95 a year plus applicable taxes. Add $25.00 for delivery outside Canada.

Electronic edition: $69.95 a year plus applicable taxes.

Single copies: $15.00 plus applicable taxes.

Reprint permissions: Contact customer service (416) 693-8526 or 1-888-287-8229

Change of address: Please advise us at least four weeks in advance, enclosing the address label from a recent issue.
Send change of address notice to:
Gordon Pape’s Mutual Funds Update
16715-12 Yonge St. Suite 181, Newmarket, ON L3X 1X4

Customer service:
By mail to the address above.
By phone to Katya or Terri @ (416) 693-8526 or 1-888-287-8229
By email to customer.service@buildingwealth.ca