Since my previous update, the Sleepy Mini Portfolio has gained 3.75 percent due to a rally in the stock markets over the fall months. It is now just over five years since the Sleepy Mini Portfolio was launched in August 2007 with an initial investment of $1,000 with a target allocation of 20% bonds, 20% Canadian stocks, 30% US stocks and 30% International stocks. Another $1,000 was added to the portfolio every quarter since then for a total investment of $21,000. Here’s how the portfolio looks as of December 11, 2012:

TDB909 – Canadian Bonds – $4,629 (19.4%)
TDB900 – Canadian Equities – $4,738 (19.9%)
TDB902 – US Equities – $7,011 (29.4%)
TDB911 – International Equities – $7,457 (31.3%)
Total – $23,835
Total Invested – $21,000

The idea behind the Sleepy Mini Portfolio is to follow a mechanical investment strategy of committing savings to a long-term portfolio on a regular basis. Therefore, we will add another $1,000 to the portfolio and rebalance it to the original target allocation using this rebalancing spreadsheet. Here are the results:

Transactions

TDB909 – TD Canadian Bond Index (e-Series) – Buy units for $337.63.
TDB900 – TD Canadian Index (e-Series) – Buy units for $228.79.
TDB902 – TD US Index (e-Series) – Buy units for $433.58.

Inspite of the economic troubles in Europe, International markets have outperformed other markets over the past quarter. Therefore, we will skip making a contribution to the International stock portion of the portfolio.

Sleepy Mutual Fund Portfolio as of Dec. 11, 2012

Readers are often curious about the annualized returns of the Sleepy Mini Portfolio. It is easy to calculate using the XIRR function in Microsoft Excel. Plugging in the dates, contributions and the current portfolio value tells us that the Sleepy Mini Portfolio returned an annualized 5.3 percent over the past five years.

[NB: An earlier version reported the rate of return of this portfolio incorrectly as 7.2 percent.]

This article has 12 comments

  1. Thanks for the tip on the XIRR() function. I actually created my own version of this function because I had only found the IRR() function and didn’t realize that XIRR() existed.

  2. Any idea if such a function exists in Numbers, the OS X spreadsheet program? I’ve created my won version of this function, but it’s messy and quite inelegant :(

    Thanks for the interesting posts!

  3. Just download Calu @ openoffice.org,works better than excel

  4. Not sure if this is simply a typo, and whether this affects your calculated rate of return or not, but you’ve reported your total investment as $20,000, whereas I believe it should be $21,000. ($20,000 was reported as the total investment last quarter, +$1000 of addition investment added at that time).

  5. Here’s a useful site: http://www.weighhouse.com/resources/portfolio_return.aspx

    It calculates it for you but if it’s multi-year, you may have to calculate each year and it becomes cumbersome, but for one year, it may be useful.

  6. @jay: Thanks for the Open Office tip.

    @mike: Good catch. Yes, it is a typo. It should be reported as $21,000. It will not affect the rate of return calculations because the inflows are recorded every quarter and I did record the last inflow correctly and double checked my numbers. Actually, come to think of it, I’ll make my calculations public, so that just in case I make an error, someone will catch it :)

    @Gaby A.: Agree. One more resource is available from PWL Capital.

    https://www.pwlcapital.com/en/Advisor/Toronto/Kathleen-Clough-Justin-Bender/Justin-s-Blog/Blog-Justin-Bender/November-2012/PWL-2012-Rate-of-Return-Calculator

  7. I am trying to determine how sensitive TDB909 bond fund is to rising interest rates. Whether fundamentally a short bond fund (less sensitive), or long bond (more sensitive). Probably it contains the entire spectrum of government and corporate bonds, and is therefore neither (or both).

    Any insight on the topic, or a pointer where I might investigate the fund in more detail?

  8. Pingback: Sleepy Mini Portfolio Q1-2013 Update (and TurboTax Online Giveaway) | Canadian Capitalist

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