I started the Sleepy Portfolio in 2005 to benchmark my personal portfolio, the bulk of which was then invested in individual stocks. The portfolio started off with an initial cash infusion of $100,000 but no new money has been added since. The portfolio has a target allocation of 5% cash, 15% short bonds, 5% real return bonds, 20% Canadian stocks, 22.5% US stocks, 22.5% Europe and Pacific, 5% Emerging markets and 5% REITs. The entire portfolio (apart from the cash portion) is invested in broad-market, exchange-traded funds (ETFs) trading in the Canadian and US stock exchanges. The cash portion is invested in a savings account such as the Renaissance High-Interest Savings Account (Code: ATL5000) that is available through many discount brokers.
The Sleepy Portfolio made steady gains in the first quarter of 2011. Despite the market turmoil due to the devastating Japanese Earthquake and the political events in the Middle East, the portfolio eked out a 3.3% gain during the quarter. REITs were the biggest winners in the first quarter gaining close to 10%. Canadian stocks also had a good quarter gaining close to 6%. But return from foreign stocks was muted by the continuing strength of the Canadian dollar. US stocks gained about 3.5% and EAFE and Emerging Markets both gained about 1.5%.
Here’s how the portfolio looked as of April 4, 2011:
If the Sleepy Portfolio had a higher value, it would make sense to rebalance by selling some Canadian Equities and REITs and buying some US and EAFE stocks. But here it is not economical to trim Canadian stocks by 1.3%, which works out to just $390. Therefore, we won’t be making any transactions in the portfolio. The only activities in the portfolio during the quarter were the dividend payments from the component ETFs, which totalled $673.