Hoss Cents Free Financial Money Magazine

Excel Funds Launches BRIC Fund
BMO Introduces Nine New ETFs
PH&N Bond Fund Series D: A Best Bet Mutual Fund

Saturday, December 12, 2009

Meritas Financial Inc. And Qtrade Fund Management to Merge.

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Meritas Financial Inc. and Qtrade Fund Management Inc. have announced a plan to merge.

The merger will result in Meritas Mutual Funds becoming a separate division of QTrade Financial and they will maintain their philosophy of socially responsible investing(SRI). (No investments in tobacco, military or companies harmful to the environment).

It is expected the deal will close at the end of March. The Meritas team will continue to be headed by Gary Hawton and when the deal is finalized he will become the chief investment officer of the Qtrade fund management division.

"For us, it gives us a more national presence. Right now, while our funds are for sale right across Canada, all of our employees are in Ontario," Hawton said.
Hawton will report to Qtrade head Scott Gibner, who will become chief executive officer of Meritas's new parent company.

"Meritas' strong and unwavering commitment to SRI over the last 10 years has been the foundation for their success and, as SRI funds continue to grow in popularity in Canada and globally, we believe this dedication and historical track record will continue to serve Meritas very well into the future," Gibner said in a statement.

Gibner, also said the company wanted to broaden its wealth-management portfolio.

“One of our primary goals will be to build the status of Qtrade’s investment solutions nationally, including a large focus on Meritas industry-leading socially responsible investment funds.”

Together the two companies will have combined assets of more than $4.3 billion from individual and institutional investors.

Stay on Track,

Money Magazine Hoss

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Claymore Investments Inc.

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Saturday, November 21, 2009

Claymore Investments, Inc. Launches New Canadian Bond ETF

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Claymore Investments, Inc., on Nov. 19, 2009 announced the launching of the Claymore Advantaged Canadian Bond ETF (TSX: CAB.TO).

The fund is a fixed income exchange traded fund (ETF) which is designed to provide investors with a low cost, tax-efficient exposure to a diversified Canadian bond portfolio. The plan is for the fund to track the DLUX Capped Bond Index, a high-quality subset of the DEX Universe Bond Index.

In other words, the price and performance of the DEX DLUX Capped Bond Index ("the Index") will determine the return of the fund, net of fees and expenses.

To qualify for the DLUX indexes, securities must have a minimum issue size or amount outstanding of $300 million, credit ratings of A or higher, and annual trade-volume turnover of 25% or higher. The Index tracks Canadian investment grade Government and corporate bonds, with target exposure allocations of 60% and 40%, respectively. The fund will receive exposure to the bond securities underlying the Index through the use of a forward agreement with TD Global Finance.

"Bonds are a very important part of an investment portfolio for income and diversification purposes and CAB is a simple, low cost way to get exposure to bonds on a tax-efficient basis. The fund is structured to provide tax-efficient income, making it an optimal investment for non-registered or taxable accounts and we are excited to be partnering with DEX, the leader in Canadian fixed income indexes, to bring this product to the market" said Som Seif, President and CEO of Claymore.

Stay on Track,

Money Magazine Hoss

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Saturday, November 14, 2009

Excel Funds Launches BRIC Fund

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On Nov. 3, 2009 Excel Funds, a Mississauga Ontario-based fund company that focuses on investment opportunities in emerging markets launched a new fund named Excel BRIC Fund. The new fund is made up from four existing Excel funds: Excel Latin America, Excel China, Excel India and Excel Emerging Europe.

The four Excel Funds are sub-advised by: Baring Asset Management (Asia) Ltd. in Hong Kong, China managing the Excel China Fund; Birla Sun Life AMC Ltd. in Mumbai, India managing the Excel India Fund; Banco Itau – Unibanco in Sao Paulo, Brazil managing the Excel Latin America Fund; and Baring International Investment Ltd in London, England managing the Excel Emerging Europe Fund.

This combining of four existing funds with proven track records provides investors the opportunity to purchase one fund instead of four.

"The BRIC nations represent more than 40% of the world's population and are among the fastest growing economies," says company President and CEO, Bhim D. Asdhir. "Yet, on the whole, Canadian investors have less than 1% of their investment portfolios invested in these economies. These markets are too big to ignore, as the combined GDP of the BRIC nations now exceed the GDP of the United States of America."

The management fee is scheduled to be 2.5% which is the same as each of the four current funds.

The fund may be purchased with a $500 minimum investment and has both-front end and deferred sales charge options. Speak to your financial advisor if you are interested in making an investment in this fund.

Stay on Track,

Money Magazine Hoss

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Sunday, November 8, 2009

GrowthWorks and Seamark Asset Management Agree to Merger Plans

GrowthWorks Capital Ltd. and Seamark Asset Management Ltd. announced plans to execute a share swap which will result in a new publicly traded company to be called Matrix Asset Management Inc. The new company will control about $3 billion in assets, $2 billion of which comes from Seamark.

The deal is subject to the approval by the shareholders of the two companies, regulatory authorities and the TSX.

David Levi, founder, president and CEO of GrowthWorks said “We already have support agreements from 53 per cent of the shareholders of Seamark, and 74 per cent of from the shareholders of GrowthWorks supporting it.”

Earlier this year GrowthWorks purchased Mavrix Funds Management for $2.2 million, not to be confused with the newly formed company Matrix Asset Management Inc.

There had been lots of speculation that Seamark was a takeover candidate due to a high number of redemptions and the loss lost of some clients earlier this year.

According to Mr. Levi, Seamark shareholders will end up with 25 per cent of Matrix, while GrowthWorks shareholders will wind up with 75 per cent.

Under Matrix, the Seamark unit will continue with the institutional fund management business and GrowthWorks will work on the venture capital side.

Current plans are for Mr. Levi to become president and CEO of the merged company while current Seamark CEO Brent Barrie will retain his position and Seamark founder, Peter Marshall will serve on the board with both Mr. Levi and Mr. Barrie.

It will be interesting to watch the progress of this new company in the upcoming year. It is not often two companies, on opposite ends of the continent, merge to form one. GrowthWorks is Vancouver-based and Seamark is Halifax-based.

Stay on track,

The Hoss
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Sunday, November 1, 2009

BMO Introduces Nine New ETFs

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Bank of Montreal (BMO) on Oct 26, 2009 added nine new funds to their stable of Exchange Traded Funds (ETFs). This brings the total of ETFs in the BMO barn to thirteen.

The new ETFs are comprised of an exacta of industry diversified funds:

BMO International Equity Hedged to CAD Index
BMO Emerging Markets Equity Index

A trifecta of "equal weight" industry sector funds:

BMO S&P/TSX Equal Weight Banks Index
BMO S&P/TSX Equal Weight Oil & Gas Index
BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index

The remaining four new ETFs are fixed income funds. Three of these fixed income funds invest in federal, provincial and corporate issues, and the fourth is hedged to the Canadian Dollar.

BMO Short Federal Bond Index
BMO Short Provincial Bond Index
BMO Short Corporate Bond Index
BMO High Yield U.S. Corporate Bond Hedged to CAD

The following document provides the investor with the names, symbols and current management expense ratio (MER) for these nine new BMO exchange traded funds.

Investors may find these new additions to the BMO stable of EFTs a worthwhile bet.

Stay on track,

The Hoss
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Sunday, October 11, 2009

PH&N Bond Fund Series D: A Best Bet Mutual Fund

Another Hoss's best bet mutual fund is The PH&N Series D bond fund. This is another fund that the Hoss and Mrs. Hoss hold in their portfolio.

The PH&N bond fund is a fixed income fund whose fundamental investment objectives are to provide relatively high yields and stability of capital by investing primarily in a well-diversified portfolio of fixed income securities issued by Canadian governments and corporations. This fund is suitable for investors with a low tolerance for risk.

According to the PH&N website, annualized compound rates of return As of September 30 2009, are as follows:

1 year 13.6%

3 years 5.3%

4 years 5%

5 years 5.7%

10 years 6.5%

As of September 30, 2009 the top ten holdings were:

Prov. of Ontario Return: 7.60% Matures: Jun 02/27 (Total % of fund 12.2%)

Prov. of Ontario Return: 4.30% Matures: Mar 08/17 (Total % of fund 4.7%)

Canada Housing Trust Return: 3.15% Matures: Jul 15/14 (Total % of fund 3.4%)

The Toronto-Dominion Bank Return: 5.38% Matures: Nov 01/12/17 (Total % of fund 3.3%)

Morgan Stanley Group Inc. Return: 4.50% Matures: Feb 23/12 (Total % of fund 2.6%)

Prov. of Ontario Return: 4.40% Matures: Jun 02/19 (Total % of fund 2.5%)

Canada Housing Trust Return: 4.10% Matures: Dec 15/18 (Total % of fund 2.3%)

The Bear Stearns Companies Inc. Return: 4.35% Matures Jul 20/12 (Total % of fund 2.1%)

Wells Fargo Financial Canada Corp Return: 5.20% Matures: Sep 13/12 (Total % of fund 2.0%)

Canadian Imperial Bank of Commerce Return: 5.00% Matures: Sep 10/12 (Total % of fund 2.0%)

The fund pays interest dividends quarterly and capital gains (if any) yearly.

For more information on this fund visit PH&N

Stay on track,

The Hoss
Next Hoss Cents Free Financial Money Magazine Post: Oct.18, 2009
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Sunday, October 4, 2009

Hoss's Best Bet Mutual Funds: Bond Funds

PH&N High Yield Bond Fund

Starting with today's edition, Money Magazine Hoss will begin a series of posts in which he reviews his best bet mutual funds.

Fixed income Bond Funds are the first category of mutual funds Money Magazine Hoss has selected for review.

The Hoss and Mrs. Hoss have included the PH&N High Yield Bond Fund, in their stable of mutual funds.

When the Government of Canada introduced the tax free savings account in 2009, The Hoss and Mrs. Hoss invested the maximum permissible amount in The PH&N High Yield Bond Fund. How has this fund performed? Since their initial investment on January 26, 2009, The Hoss and Mrs. Hoss have realized a return of over 14%.

The PH&N High Yield Bond Fund investment objectives are to provide a high level of income and the opportunity for capital appreciation by investing primarily in a well-diversified portfolio of fixed income securities issued by Canadian corporations.

To achieve the fund's investment objectives, the manager invests primarily in medium quality Canadian corporate bonds and preferred shares and government bonds issued or traded in Canadian and U.S. dollars. The average term to maturity of the portfolio is managed within strict guidelines, typically between three and ten years.

If you are an investor with low or moderate risk looking for a bond fund with high levels of current interest income, this fund may be of interest to you.

As with all Mutual Funds there is some risk with the purchase of this fund. The principal risks associated with an investment in this fund are market, interest rate, credit and liquidity risks.

For more information see PH&N High Yield Bond Fund.

Stay on track,

The Hoss
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Monday, September 21, 2009

We have stopped our economic freefall - President Obama

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In his weekly address to the nation, President Obama gave credit to all nations for taking measures which he believes have stopped the economic free-fall. However, there is still much work to be done and he believes the G20- Summit in Pittsburgh September 24-25 will provide an opportunity for "a five-month checkup to review the steps each nation has taken – separately and together – to break the back of this economic crisis."

President Obama pointed to the Recovery Act, which was enacted in February, as an example of action his administration has undertaken to spur economic growth. He also stated that they have worked hard to free up the credit market to put more money into the hands of the consumer.

At the G20 conference the United States is going to "discuss some of the steps that are required to safeguard our global financial system and close gaps in regulation around the world – gaps that permitted the kinds of reckless risk-taking and irresponsibility that led to the crisis".

To this end President Obama is pushing his Consumer Financial Protection Agency proposal (currently before Congress). This agency will have clearly defined rules aimed at preventing shady lending practices such as:

Loan contracts written to confuse

Hidden fees

Financial penalties issued without warning

President Obama gives his assurance that this agency will both establish clear rules and enforce those rules.

He recognizes that Wall Street banks would rather maintain the status quo and have hired lobbyist to work at stopping the bill currently before Congress, but this does not deter his determination to stop the business as usual mentality which this time could result in total financial collapse.

We have all seen how quickly many financial institutions have decided to pay back the government loans rather than abide by the strict rules applied to those loans.

Money Magazine Hoss agrees with the President's philosophy and sincerely hopes that he sticks to his guns and does not succumb to the pressure that will undoubtedly be put on him and his administration to withdraw their proposal for a new Consumer Financial Protection Agency.

Stay on Track,

Money Magazine Hoss

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Sunday, September 13, 2009

Half of Americans under 65 to lose their health care?

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A brand new report from the Treasury Department indicates that at some point over the next ten years approximately half of Americans under age 65 will lose their health care coverage.

In his weekly White House address, President Obama assured the American people that he would not let this happen. "In the United States of America, no one should have to worry that they’ll go without health insurance – not for one year, not for one month, not for one day. And once I sign my health reform plan into law – they won’t."

President Obama took this opportunity to tell those Americans already with health insurance that nothing in his plan would require them to change their doctor or the coverage they have. Rather, his plan would make sure their insurance would be improved. "We’ll make it illegal for insurance companies to deny you coverage because of a pre-existing condition, drop your coverage when you get sick, or water it down when you need it most. They’ll no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or over a lifetime, and we will place a limit on how much you can be charged for out-of-pocket expenses – because no one should go broke just because they get sick."

In addition, those currently without coverage will be able (under his plan) to get quality plans at affordable prices.

He reaffirmed his commitment that any plan he signs will not to add one dime to the United States deficits. He actually predicted a deficit reduction of $4 trillion over the long term. How? By successfully slowing the growth of health care cost by a mere one-tenth of one percent.

President Obama stated the time for action is now.

Money Magazine Hoss agrees with the President. Enough debating. What is currently in place is not working. It's time to try something new. In a country as abundant as America, it is a travesty, an international embarrassment, that so many are without the means to get health care.

Stay on Track,

Money Magazine Hoss

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Sunday, September 6, 2009

Unemployment Hits 26-Year High

From The Hoss's Mouth

The US jobless rate reached a 26-year high according to government reports. August had a net job loss of 216,000 jobs, bringing the total job loss since the beginning of 2008 to 6.9 million. The current unemployment rate is 9.7%.

The silver lining in this dark cloud is that fewer jobs were pruned in August than in July (216,000 vs 230,000). In addition it was the lowest job loss since August 2008.
Christina Romer, Chairwoman of the White House Council of Economic Advisers, kept a positive outlook by saying it (job losses) is still a terrible number but it is certainly showing those job losses moderating and that really is what is important. In her opinion this demonstrates that the stimulus package is working and they (government officials) will continue to monitor the situation.

The only sectors to show an increase in employment were health care and education. Construction, manufacturing, financial services, government and professional services all incurred job losses.

It is usual for teenagers to have difficulty in finding summer jobs and this may have an effect on the record high unemployment percentage. For example, the teenager unemployment figure for August was 25.5 % versus 10.1% for adult males and 7.6% for adult females.

It will be interesting to see what next months figures bring, but let’s hope that with students returning to school and perhaps a continued decline in job losses that we will see a meaningful drop in the unemployment rate.

Stay on Track,

Money Magazine Hoss

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Saturday, August 29, 2009

Health Care Public Vs Private

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From the Hoss's Mouth

Why does health care cost so much? Forget all you hear about the high cost of developing new equipment and drugs, over-utilization, increased salaries for health care professionals, and an aging population. Money Magazine Hoss can give you the answer for the high cost of health care in one word: GREED.

Greed by health insurance companies who are in the business for the sole purpose of generating a profit. They could care less about providing affordable health care insurance for companies and individuals.

How does Money Magazine Hoss come to this conclusion? He does so by reading private for profit insurance horror stories posted all over the Internet and by reading private insurance whistle blower testimony given before Congress.

Health insurance companies are notorious for denying valid claims, using excuses such as claimant had a pre-existing condition, claimant provided false information on their application form (even if it was an honest mistake). Testimony before Congress indicated for-profit insurance companies employ the following strategies:

Regular meetings to identify high cost areas and how to redesign benefits to control them.

Multiple exclusion clauses which are unknown to doctor or patient until used by the insurance company to deny a claim.

Pre-existing condition exclusions which enable the plan to take steps to link a patient’s current diagnosis with some prior diagnosis and thus deny the claim

Misleading advertising which only highlights the benefits of the plan with no mention of the plans restrictions.

Denials on the grounds the treatment is not medically necessary--this is the insurance companies' ultimate cost control tool.

The above examples are by no means a complete list of all the methods used by insurance companies to reduce their costs.

For more info, see the testimony of LINDA PEENO, M.D.

Perhaps the most disturbing tactic Money Magazine Hoss has come across is when a terminally ill patient’s health care claim is denied. The health insurance company knows full well that the claimant will die before s/he can process an appeal, and thus they avoid paying for any treatment prior to death. Of course they always claim they had legitimate reasons for denying the claim.

Money Magazine Hoss resides in Canada, and we have a public health care system which, although not perfect, does take the profit incentive out of health care. The premiums are minimal and provisions are made for those with no or very little income. We do experience some delays but emergency cases are given priority.

Money Magazine Hoss supports President Obama’s public health care option, in fact he would like to see health care totally removed from for-profit companies.

Stay on Track,

Money Magazine Hoss

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Sunday, August 23, 2009

Working Capital Per Dollar of Sales

From The Hoss's Mouth

Working Capital Per Dollar of Sales is another financial calculation investors use when analyzing the performance of a company. This calculation tells the potential investor the approximate working capital a company should have.

Simply put, working capital is Current Assets minus Current Liabilities. Working capital per dollar of sales is the Working Capital divided by Total Sales and is expressed as a percentage.

Working Capital Per Dollar of Sales = (Current assets - Current liabilities)/Total Sales.

Current assets and liabilities can be found on a company's Balance Sheet, and total sales is found on a company's Income Statement.

The trick for investors is recognizing the fact that working capital per dollar of sales varies across industry types.

For example, retailing businesses with substantial low cost sales require a working capital per dollar of sales of about 10 to 15 %, while industrial manufactures who produce high cost merchandise require 25 to 30%. Companies such as fast food chains, due to the cash nature of their business, often operate with a negative working capital per dollar of sales.

Smart investors, when analyzing prospective companies, are always cognizant of the fact that the character of the business plays a huge part in determining the amount of working capital per dollar of sales a business requires.

Money Magazine Hoss hopes you will find this information useful.

Stay on Track,

Money Magazine Hoss

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Sunday, August 16, 2009

Calculating Return on Assets (ROA)

From The Hoss's Mouth

Return on assets (ROA) is a tool investors use to determine how competent an organization is at using its assets to produce earnings. There are two primary formulas for calculating ROA.

Method One: Net Profit Margin x Asset Turnover

Method Two: Net Income / Average Assets for the Period

Both methods are acceptable but the investor must make sure that s/he uses the same method when performing these calculations, otherwise when comparing companies the results may be skewed. Just like when calculating the win percentage of two horses in a race, a handicapper would not use a formula which calculates win percentage by using total wins divided by total races for one horse and a formula that uses total wins at today's distance divided by total races at today's distance for another. This type of comparison would not produce meaningful results.

Generally speaking, the higher the ROA the better, however remember that widely different industries produce widely different ROA's. Industries such as railroads are asset heavy and will have lower ROA's than asset light companies. So always compare companies that are in the same industries; to use an old cliche: compare apples to apples.

There are many free online financial services which provide you with ROA numbers for all companies listed on the stock exchange, therefore Money Magazine Hoss is not going to bore you with sample calculations. Why perform all these mathematical calculations yourself when somebody is doing it for you and for free? For example, a quick look at Yahoo Financial shows that Amazon has a ROA of 6.93%.

Stay on Track,

Money Magazine Hoss

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Sunday, August 9, 2009

Calculating Asset Turnover Ratio

From The Hoss's Mouth

Asset turnover ratio is another financial tool investors use in their analysis of a company's efficiency. It calculates a business's effectiveness at using its assets in producing sales or revenue. The formula for this simple calculation is as follows:

Asset Turnover = Revenue/Assets (Assets in the example below are averaged for the period being calculated)

Let's take a look at Amazon for an example:

In 2005 Amazon had total assets of $3,696,000,000

In 2006 Amazon had total assets of $4,363,000,000

Average Assets = ($3,696,000,000 + $4,363,000,000) /2 = $4,029,500,000

Amazon's Total Revenue for 2006 was $19,166,000,000

Amazon's 2006 asset turnover ratio: $4,029,500,000 /$19,166,000,000 = .21

What this tells the investor is that for every dollar of assets Amazon had in 2006, they sold $.21 worth of product and services.

Money Magazine Hoss must point out that when comparing asset ratios it is important to compare companies that are in the same business industry. Generally, the company with the highest ratio is the most efficient.

Stay on Track,

Money Magazine Hoss

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