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Mutual Fund News

Some of the parts may be better than the whole


It's Day Three of our weeklong look at the stocks held by major TSX-listed exchange-traded funds.

We're zeroing in specifically on the wealth-creating power of the stocks in these ETFs. Our tool is EVA, or economic value added, which is a stringent measure of a company's profitability.

Here, we compare EVA scores for the Claymore Canadian Fundamental Index ETF (CRQ) with its constituent stocks.


Montreal-based Stockpointer, a specialist in EVA analysis, has alphabetically listed the stocks that account for the vast majority of the assets in CRQ.

You'll also find data on each stock's intrinsic value, which is what a stock should be trading at according to the economic value it creates for shareholders.

Price over intrinsic value puts a stock's actual trading price in perspective. Higher numbers suggest an over-valued stock, while a score under 1.0 suggests bargain pricing.

Finally, Stockpointer has provided an economic performance index score for each stock. The EPI offers a way of comparing EVA for companies across different sectors. A company needs an index score of at least 1.0 to be considered a wealth creator.


CRQ itself rates a 1.0 on the economic performance index, which suggests the solid wealth creators in the underlying FTSE RAFI Canada Index are pretty much in balance with the weaker names. Look for stocks with high EPI scores if you prefer holding individual stocks to owning the ETF.

Then, find the stocks trading below their intrinsic value as calculated by Stockpointer. Research In Motion stands out in this regard, as do Fairfax Financial Holdings, National Bank of Canada, Power Corp. of Canada and Rogers Communications.


Claymore Canadian Fundamental Index ETF (CRQ)
CompanySymbolSectorWeight in Portfolio % Price Jan. 6Intrinsic ValuePrice \ IVEconomic Perf. Index
Bank Of MontrealBMO-TFinancial5.154.59570.961.2
Bank Of Nova ScotiaBNS-TFinancial5.347.52451.062.1
Barrick Gold CorpABX-TMaterials1.443.18-26-1.66-2.3
BCE IncBCE-TTelecom1.028.54950.31.8
Bombardier Inc -cl BBBD.B-TIndustrial1.24.99140.351.6
Brookfield Asset ManagementBAM.A-TFinancial1.323.14201.130.8
Canadian Imperial BankCM-TFinancial3.166.99401.651
Canadian National Railway CoCNR-TIndustrial1.857.31750.761.5
Canadian Natural ResourcesCNQ-TEnergy2.976.20401.90.8
Canadian Pacific Railway LtdCP-TIndustrial1.156.14690.820.9
Celestica IncCLS-TInf. Tech.1.310.10-1-12.05-0.4
Enbridge IncENB-TEnergy1.147.40730.651.8
Encana CorpECA-TEnergy1.936.15920.390.9
Fairfax Financial HoldingsFFH-TFinancial0.8403.803,7280.113.9
Magna International -cl AMG.A-TCons. Discr.2.360.02183.3-0.8
Manulife Financial CorpMFC-TFinancial5.221.01121.71-0.4
National Bank CanadaNA-TFinancial1.160.00900.662.1
Potash Corp Sask IncPOT-TMaterials0.7127.231131.121.8
Power Corp CanadaPOW-TFinancial2.629.32700.422.3
Power Financial CorpPWF-TFinancial1.331.29470.671.8
Research In Motion LtdRIM-TInf. Tech.0.767.701090.623.2
Rogers Communications -cl BRCI.B-TTelecom0.731.10610.512.2
Royal Bank Of CanadaRY-TFinancial8.155.34600.931.8
Sun Life Financial IncSLF-TFinancial2.932.49211.55-0.1
Suncor Energy IncSU-TEnergy5.939.2557.350.3
Talisman Energy IncTLM-TEnergy1.820.23111.870.4
Teck Resources LtdTCK.B-TMaterials9.040.47391.040.7
Thomson-reuters CorpTRI-TCons. Discr.2.534.51870.41.6
Toronto Dominion BankTD-TFinancial6.064.37720.891.1
Transcanada CorpTRP-TEnergy1.835.62490.721.3
Weighted Average for the ETF:100.055.04831.241
Source: Stockpointer

© 2007 The Globe and Mail. All rights reserved.

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