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moneysense.ca, 31/12/05
The 2005 Sleepy Portfolio Report Card
The Sleepy Portfolio had a stellar year returning 12.9% in total returns. The biggest winners were Canadian large-cap equities (up 25.3%), Canadian mid-cap equities (up 20%), EAFE (up 11.2%), Canadian REITs (up 16%), Emerging Markets (up 33%) and US mid-cap equities (up 12%). Surprisingly, none of the major asset classes in the portfolio had a negative year.
As noted in an earlier post, our personal portfolio returned a total of 13.2% over the year. The big winners were CAE Inc. (TSX: CAE), Canadian Natural Resources (TSX: CNQ), Sears Canada (TSX: SCC), E*Trade (ET), AGF Management (TSX: AGF.NV), Altria Group (MO) and TD Bank (TSX: TD), all of which posted better than 20% returns. The big losers were Pfizer (PFE) and Anheuser-Busch (BUD).
moneysense.ca, 31/12/05
What was your rationale for choosing XIC over XIU? XIC can protect you when the TSX is weighted by a particular stock (i.e. Nortel) that goes south. Currently, however, no stock exceeds 10% of the index, and therefore there should be no upside risk to XIU. It appears the only thing XIC will do is limit gains if a stock or two were to break the 10% barrier. Thoughts?
Karl: I chose XIC because it was a capped version of the XIU. But, now the XIC tracks the TSX Capped Composite (Barclays recently changed the investment objective of the fund), which is far more diversified and has some weighting in mid-caps (14%) and small-caps (9%). If I were investing now, I would consider just the XIC instead of the XIC and the XMD (which has a 0.55% MER).
Makes sense – thanks. I didn’t know about the change in purpose of XIC.
In the past, you mentioned you use Action Direct. Does it automatically reinvest dividends for Barclays iUnits and other ETF’s? Do you have to request anything specific to hvae this happen?
I’m curious as to why you chose XSP. I was recently looking for some US exposure and found that XSP primarily invested in iShares leaving a higher MER and lagged performance against IVE(iShares) and also VTV(Vanguard Value Vipers). Were you specifically looking for a protection from FX fluctuations?
Karl: Action Direct automatically reinvests dividends (I think ETFs are included, but I have to check). You have to call them to enroll. And they only reinvest in whole shares (and credit the rest of the cash dividends).
FC: When I came up with the Sleepy Portfolio, there were restrictions on the foreign content (I assumed the portfolio to be tax-deferred). If I were investing now, I’d go with the IVV and forego the forex hedging.
Thanks again for the info. Finally – if you’re building a sleepy portfolio – why not use it? Is it because you are trying to use it as a benchmark and beat it?
Karl: Great question. I already use the sleepy portfolio for my Group RRSP and my sons’ RESPs. I built the portfolio to benchmark my returns. I’ve been beating the Sleepy Portfolio by at least a few % points for a few years now. If I start to trail the Sleepy badly for a few years, I would just switch to a passive portfolio.
[...] The 2005 Sleepy Portfolio Report Card [...]
[...] Sleepy Portfolio report cards: In 2005, the Portfolio was up 12.9%. In 2006, the Portfolio had another stellar year and was up 14.7%. In 2007, the Portfolio returned [...]