From investment guru Brendan Boyd comes "Investor's Notebook," a digest of investment opinion from the country's leading financial advisers. From stock tips to trade advice, twice a week "Investor's Notebook" gives advice for the homeowner, investor and everyone interested in knowing how to manage their assets and investments to their fullest advantage.

(A digest of investment opinion from the world's leading financial advisers)

• Pilgrim International Smallcap Growth Fund has produced the highest average annual return among all international stock funds over the past three years, a lofty 54.6 percent annually. Pilgrim focuses on non-U.S. companies with average market capitalizations of $1.5 billion, particularly those that are growing faster than average due to some sustainable improvement the market hasn't yet recognized. Recent favorites: Trans Cosmos, Jafco, Fast Retailing, Metropole Television, Ricardo Group, Havas Advertising.

• Recent financial-service legislation has opened the floodgates to a potential merger boom. Banks, insurers and brokers are no longer barred from entering each other's markets, and acquisitions are the fastest way to gain entry. Dow Theory Forecasts newsletter (7412 Calumet Ave., Hammond, IN 46324) recently used its complicated Quadrix rating system to determine which bank stocks seem the most attractive takeover candidates based on four factors: value, quality, momentum and financial strength. The highest scorers: Columbia Banking, Dime Community Bancshares, Bank of the Ozarks, Texas Regional Bancshares, ISB Financial.
  
  
• Tax reform has killed the preferred dividend loophole for corporations. So issuing companies now tailor preferred stocks to individual investors in the form of "capital preferred securities." Whether you're an aggressive investor who wants growth with a yield, or a conservative yield seeker who values safety of principal, there's a capital preferred for you, says www.utilityforecaster.com. UF recently recommended three CPSs trading on the New York Stock Exchange and yielding more than 8 percent: Enron Capital 8 Percent MIPS, Mission Capital 8.5 Percent MIPS, and Texaco Capital ARPS.
  
  
• Long-term A-rated industrial bonds recently yielded a full percentage point more than 30-year Treasuries. But if you add up taxes and transaction costs, notes SG Capital Management in New York City, the corporate may end up yielding just one-third point more than the Treasury. "And even that advantage can vanish if the bond is called."
  

• All the gold that is aboveground now is worth $1.3 trillion, observes Marc Faber Ltd. (contrary@hk.super.net). "Compare that to the $1.6 trillion market value of the six largest U.S. technology companies: Microsoft, Intel, IBM, Cisco, Lucent and Dell. Or to the global bond market's $30 trillion value. There's a strong argument to be made that sooner or later this valuation discrepancy, and rising inflation, will spark a new bull market in gold."

• SITE OF THE WEEK: Most over-the-counter Web sites are short on hard information and long on advertising. Not the OTC News Network (www.otcnn.com). Focused exclusively on OTC Bulletin Board stocks (any equity not listed or traded on a national exchange), the site provides breaking news reports of OTC companies as well as company press releases. The easy-to-use site allows investors to point and click on the headline or links to complete articles. It also features a daily list of the day's five most-active OTC issues.
  
  
• (Investor's Notebook reflects the opinions of professionals. It does not recommend any specific investments, and no endorsement is implied or should be inferred. For more information, contact the individual firms cited.)