Updated 12 Stock Portfolio - UBS

UBS has made a few changes to its 12-stock portfolio this week, taking a more defensive stance in anticipation of seasonal headwinds in the latter part of the summer.

George Vasic, UBS Canadian market strategist, first swapped Petro Canada (PCZ) with Suncor Energy (SU) ahead of their pending merger. He then replaced Toronto Dominion Bank (TD), rated Neutral by UBS, with Canadian Imperial Bank of Commerce (CM), rated a Buy by fellow analyst Peter Rozenberg.

Finally, Mr. Vasic switched out Bombardier Inc. (BDRAF.PK) and Research in Motion Ltd. (RIMM) with BCE Inc. (BCE) and Canadian Pacific Railway Ltd. (CP)

Mr. Vasic said in a note Friday:

Sector themes embedded in the list include the retention of a gold stock, as they perform well when when risk appetite decreases and to reflect seasonal strength in August and September. We believe the best risk/reward is in the non-resource, non-financial stocks, which are a 33% weighting in the list versus 25% in the TSX.

Since UBS began its portfolio in Sept. 2004 the list has seen a 51.7% capital return, versus a 39.3% return on the TSX 60.

Here's the updated list:

• Bank of Nova Scotia (BNS)
• BCE Inc.
• Canadian Imperial Bank of Commerce
• Canadian Pacific Railway
• EnCana Corp. (ECA)
• Goldcorp Inc. (GG)
• Potash Corp of Saskatchewan (POT)
• Royal Bank of Canada (RY)
• Shoppers Drug Mart (SHDMF.PK)
• Suncor Energy (SU)
• Tim Hortons Inc. (THI)
• TransCanada Corp. (TRP)

The list is based on buy-rated stocks from UBS, which makes up about 44% of all covered shares.