The Canada Pension Plan is the basic federal pension plan for all Canadians, so it’s important to know how it works, what you’re entitled to, and when. I wrote about the CPP basics in my last article. But it’s even more important to know about changes that are being made and how they might affect your retirement planning. And recently, the government has been tweaking the CPP all over the place.

It’s a category that’s often overlooked these days, because inflation has been relatively low for many years – in the range of 2% to 3% annually. Nevertherless, Canadian Inflation-Protected Fixed-Income funds have generated some of the best returns on average of any category in the Fundata listings over the past five years. And of course, some individual funds, notably the IA Clarington Real Return Bond Fund, have handily exceeded those averages. Can they keep up the momentum?

* BlackRock straps on Claymore. Expands Canadian ETF market share.
* Bissett’s new balance. Aims for low volatility, steady income with veteran managers

In a recent column I mentioned how stocks may be in what’s sometimes called a “rangebound” market, where trading tends to stay within a band, rather than breaking out in a sustained upside trend. In this type of trading pattern, there will be periods where we see sharp upward or downward movements. So how could investors benefit from such a market pattern?

Maybe it’s the influence of those endless “duelling chef” reality television shows, but have you noticed how getting dinner at a restaurant is starting to resemble a trip to a gallery of modern art? In other words, it looks weird, and you’re unsatisfied when you leave. That ethos has crept into the mutual fund world, too, as the portfolio chefs at fund companies offer growing numbers of series and classes with a bewildering variety of fees and costs.

Market volatility in the past year has reminded investors of the importance of holding fixed-income assets in their portfolios. Not only will the fixed-income allocation lower the overall volatility of a portfolio, but in the past year, fixed-income mutual funds have on average generated higher returns than equity funds. With many economists calling for similar market volatility in the year to come, fixed-income funds might continue to perform well. The two Fundata  FundGrade® A-rated funds we’re looking at this month are both fixed-income funds, but their strategies are quite different.

At this time of year, many of us tend to make donations to our favorite charities, often in response to the flood of mail, e-mail or telephone solicitations. People support charities for a variety of reasons. Some donate to a hospital or health charity that has provided assistance to a close relative or friend. Or perhaps there are strong ties to a particular religious or cultural organization, or to a favorite school or university. Perhaps you’ve made charitable gifts during over the course of your lifetime and may want to incorporate gifts to charity in your estate plan. Whatever your situation, it’s a good idea to check into the tax implications of your gifts, especially if you’re contemplating a major donation as part of a larger estate plan.

* Vanguard’s low-cost ETFs now trading
* AGF terminates Japan fund due to lack of interest
* Korean asset manager completes takeover of Horizons ETFs

Small-cap equities tend to outperform in rising markets but underperform in falling markets. In other words, they tend to be more volatile than the market as a whole. So far in 2011, with both the S&P 500 Composite Index and S&P/TSX Composite Index in negative territory, we would expect small-cap funds to be performing quite poorly. This is certainly the case as the average Canadian Focused, U.S., and Global Small/Mid Cap Equity funds have lost 13.3%, 4.1%, and 9.5% year-to-date (YTD), respectively. At Invesco Trimark, however, one management team has been able to buck this trend with three small-cap funds that have received the Fundata FundGrade® “A” rating.

If you’re looking for an alternative investment to diversify your portfolio, then this might be the product for you. Launched in November 2009, the Horizons AlphaPro Seasonal Rotation ETF (TSX: HAC) is one of a kind. This actively managed exchange-traded fund (ETF) aims to produce superior returns by taking advantage of historical seasonal market trends. For example, research has shown that equity markets have traditionally performed well around the Christmas season and at the beginning of the New Year, as well as the summer months. Historically September and October have been the worst-performing months. These are some of the trends that HAC aims to capitalize on.