I’ve posted by September 2018 quarterly portfolio review. We’re behind on our total return target so far this year. Find our more here.
I made pretty much all the trades I had discussed previously in my self-imposed quarterly trading window. One new addition to the portfolio (BIP) and two eliminations (EFV, EEM).
The Ottawa Share Club fantasy growth and income portfolio reports as of June 30, 2018 are now posted.
The fantasy growth portfolio has been doing very well year-to-date and overall:
- Up 7.3% year-to-date
- Up 38.0% since inception (January 1, 2016)
The fantasy income portfolio is in positive territory this year (and overall) but has lagged the growth portfolio (as one might expect):
- Up 1.1% year-to-date
- Up 16.7% since inception (January 1, 2016)
With the second quarter completed, I’ve updated my secular trends fantasy portfolio performance report.
It’s been a strong year so far for the overall performance, but some themes are doing much better than others.
The total portfolio has delivered a 5.89% total return so far this year. The leaders are Amplify Online Retail ETF (IBUY), up ~25% and ETFMG Prime Cyber Security ETF (HACK), up ~17%.
The laggards are Vanguard FTSE Emerging Markets ETF (VWO), down ~7% and iShares Global Clean Energy ETF (ICLN), down ~5%.
By contrast, my secular trends benchmark is up only ~1% year to date. Other major indexes have total returns year to date as follows:
- NASDAQ (QQQ) +10.6%
- S&P 500 (SPY) +2.52%
- TSX Composite (XIC) +1.14%
- Dow Jones Industrial Average (DIA) -0.91
So, secular investing this year so far has done fairly well even though performance varies widely by theme. See the full performance report here.
I’ve published my second quarter of 2018 portfolio review. In it I discuss my current take on managing our household portfolio, some of the trades I’ve recently made and my thoughts for the rest of the year.
See my review here.
I have a confession to make. I have broken my own asset allocation rules with my second quarter trades.
I bought more equities even though I was already a bit overweight in them.
Why did I do this?
My reasoning is as follows:
- I have a relatively low target equity weight to begin with (46% of our portfolio)
- I had a lot of cash on hand (way over 10% of our portfolio)
- I have more cash becoming available due to savings, bond maturities, dividends and interest in the next 12 months or less
- quite a bit of that cash was in our TFSAs and I wanted to get that money working at better than than bond returns since the returns are tax free
- bond yields are still not that attractive in spite of rising rates (~3.1% yield-to-maturity on a five-year investment grade corporate bond)
- there are a lot of relatively good deals in consumer staples, utilities and telecommunications right now – several companies are off their highs and are trading at reasonable multiples
- these three sectors are pretty defensive and could do OK in a recessionary environment
- I only bought high quality equities with relatively low risk and often decent dividends (with one or two exceptions)
- I did not add any new positions, just added to our existing holdings to increase their position size to something more in line with our average position size
- Next quarter is another opportunity to review our portfolio and decide if we should trim some of the big gainers, especially in technology, which are starting to become more dominant single positions in our holdings
What I bought (all in our TFSAs):
- Algonquin Power (AQN) – initially bought in my Canadian TFSA and journalled to my US TFSA to get the dividend that is paid in US dollars without conversion back to Canadian dollars
- Bell Canada Enterprises (BCE)
- Fortis (FTS)
- Loblaw (L) – has a relatively low dividend
- ONEX (ONEX) – this is an exception as it is a growth stock with a very small dividend in the multi-sector holdings industry
- North West Co (NWC)
- Telus (T)
I also bought some bonds:
- CALLOWAY-I 3.985% 30MY23
- FAIRFAX FINL 4.5% 22MR23
- CANADIAN WESTERN BANK Maturity Jun 16 2022 Coupon 2.737
So, after this investment “spree,” our weightings vs. targets are as follows:
|Total Cash/Near Cash||9.0%||9.4%||0.4%|
All in all, we’re still in a pretty conservative posture and continue to have flexibility with cash levels if needed.
More to come in early July when I publish my Q2 portfolio review.
I’ve launched a new fantasy portfolio on the money4retirement.ca website to track secular, or thematic trends for investors.
A secular trend is:
An investment trend associated with some characteristic or phenomenon that is not cyclical or seasonal but exists over a relatively long period.
The rationale for doing this and the initial portfolio structure is presented here.
The first secular trends fantasy portfolio tracking report (and its benchmark) is presented here.
I’ve also added a new menu option called “Secular trends and investing” on the site for quick access.