Portfolio Update – January 2017

Overall, I have been pretty happy with the January performance when observing paper (i.e. non-realized) gains, but passive income fell short when compared to the benchmark.

Total fund returns were 1.26%, vs. the benchmark of 0.52%, which represents a more than 2× gain over the benchmark! This is also evident when we look at the trailing twelve month performance:

Here, you can see that on a trailing twelve month basis, total fund is up 15.79% vs. the benchmark 9.99%, which represents a 58% differential!

In absolute terms, the biggest gainers were Brookfield, Philip Morris, and BMO, which accounted for 54% of the overall gains in the period. On a percentage gain basis, Sun Life, Bank of Nova Scotia, and Telus, topped the list in gaining 45.42%, 23.49%, and 17.30% respectively.

However, while the non-realized gains were impressive, as I mentioned above, passive income was lacking.

Overall, the benchmark passive income was $1,811.80, and my own passive income was less than half of that; in fact, my passive income came in at 60.50% under the benchmark. But, this was to be expected. Recall from my December 2016 update:

That said, I expect to see a huge spike in January 2017 in the benchmark, mainly due to timing. You’ll notice that December had a very low benchmark income number, and generally speaking, March, June, September, and December, should be roughly equal in benchmark passive income. Because my benchmark is composed of ETFs, those ETFs did not pay anything in December 2016, and instead paid many of their distributions in January 2017 — so any missed income from December should catch up to us in 2017.

So, the spike in January 2017 was to be expected, but I did not expect the spike to be so drastic. This huge upset also affected the TTM passive income numbers:

Not quite as bad as the monthly results, but on a trailing twelve month basis, we are still running at 1.97% less than the benchmark. As I have become more aggressive in investing idle cash in ETFs, I expect this trend to reverse in the coming months.

Finally, starting with this post I will be monitoring my asset mix compared to my target asset mix. As to be expected, I am very heavily weighted in pure equities. You’ll also notice that the majority of my funds are tied up in my RRSP and LIRA. As part of my 2017 goals I mentioned increasing TFSA contributions on the order of $20,000, and I’ll also use these contributions to pair down equity exposure, systematically increasing my fixed income and real estate exposure through ETFs.

Finally, in a previous entry I mentioned that I was running severely over budget for 2017, when comparing my projected spend to my actual income. In fact, I was projecting a deficit of $14,000. To that end, I have been rigorously monitoring my spending habits, and I’m happy to say that in January I came in at 3.51% under budget. This is not a significant amount, but anything under budget is a gain in my view.

Month Actual Spend to Budget Variance (lower is better)
January 2017 -3.51%

A big chunk of this decrease was due to not having to buy gas in January (hooray for public transit!), and cutting down on entertainment expenses (e.g. music, movies, and books). However, February is looking a little bleak, as some expenses that I avoided in January will definitely come up in the next month (e.g. I will need to buy gas in February!).

And there you have it: the first update for 2017. How did everyone else do?

Onwards and upwards!

Portfolio Update December 2016 – $620 realized returns

My discount brokerage, BMO InvestorLine, only released statements to its clients on January 23; so the update for December 2016 has been incredibly delayed. But was the delay worth it? Given the data we have at hand, I would say yes! Key highlights:

  • Passive income of $620, 350% over our benchmark
  • Total passive income for 2016 of $6,627, 29% over our benchmark
  • Total fund returns for December 2016 of 2.7% vs. benchmark of 1.2%
  • Total fund returns for 2016 of 11.0% vs the benchmark 7.8%

Some stellar numbers! Let’s see how this looks on the graphs.

Monthly Returns ending 2016-12

First up, you’ll notice that there is a new portfolio added, that of EPSP. I recently became a full-time employee of a major FI again, mainly to maintain stability of income, and now have access to their Stock Ownership program. This gives me a great way to receive commission free trades on a regular basis, directly debited from my pay, which results in regular, periodic investments into my tax deferred account. The EPSP portfolio is also responsible for the huge retroactive spike in November 2016. Overall, 4 out of 6 of my portfolios beat the benchmark, with only my LIRA and EPSP lagging behind. Overall however, the entire portfolio for December brought in a 2.7% return, whereas the benchmark returned only 1.2%: I effectively doubled the benchmark, and then some.

Monthly Returns TTM Returns ending 2016-12

On a trailing twelve month perspective (i.e. all of 2016), I am generally happy with the results. Because I am heavily weighted in Canadian stocks, I did not experience as much of an updraft as some US investors since Trump won the election in November 2016, but overall my portfolio has been on a positive uptrend all year, ending the year at +11.0%, whereas the benchmark is only up 7.8% for the year; my portfolio beat the benchmark by over 40% in 2016. One point of pride: each and every one of my portfolios beat my benchmark; since each portfolio has a slightly different mandate, this is a great feat, which I hope to continue in 2017.

Of course, I am a dividend investor, so passive income is one of my key measures of success. What follows are the passive income returns for December 2016, as well as for the year.

Passive Income ending 2016-12

Passive Income TTM ending 2016-12

These graphs look different from previous ones, but I believe they provide a simpler comparison of actual vs. benchmark income. For December we brought in over $600 in income, vs. the benchmark of $138. For all of 2016, we brought in $6,267, whereas the benchmark only brought in $4,859; a whopping 29.0% increase for the year.

That said, I expect to see a huge spike in January 2017 in the benchmark, mainly due to timing. You’ll notice that December had a very low benchmark income number, and generally speaking, March, June, September, and December, should be roughly equal in benchmark passive income. Because my benchmark is composed of ETFs, those ETFs did not pay anything in December 2016, and instead paid many of their distributions in January 2017 — so any missed income from December should catch up to us in 2017. A similar event happened in October 2016, where the benchmark returned zero passive income, but there was much higher passive income in November, when compared to July and August.

With the year at an end, I have also been able to calculate my forward income. In 2017, based on current holdings and current rates, I expect to generate $6,800 in dividend income, roughly 8.50% higher than all of 2016. As I mentioned in my investment goals post, I wish to increase my total income by 5.00%, which means I have to generate another $340 in passive income to make that goal. I feel this should be a realistic goal given the current environment, assuming I do not have to liquidate any holdings in the near term.

So there you have it: F2016 in a nutshell!

Onwards and upwards!

Portfolio Update – November 2016

Before I begin, there was a minor issue with the October update benchmark numbers. I had made an error in the benchmark passive income: Vanguard’s VAB declared an October dividend, but the actual payment date was in November 2016. This means that my actual income in October surpassed the benchmark income by an even wider margin.

I’ll jump straight to the chase and say that November was a disappointing month. Odd, because following the winning of president-elect Trump, US markets were on a tear. Unfortunately, my Canadian holdings did not do as well.

Portfolio Monthly Returns as of November 2016

The benchmark return was 0.912%, but my total fund was -0.413%, more than a 1% difference. My LIRA portfolio came in at a respectable 0.902%, and the 0.010% variance I can attribute to tracking error. The TFSA portfolio dominated at +2.522%, but my margin account was pummeled at -4.918%! Inspecting the margin account, this somewhat makes sense: it is 2/3 in Canadian equities, which came in at -8.898%, which was the primary source of the losses.

But, as a long-term buy and hold investor, you’ve got to take the bad months with the good months. My TTM is still exceeding the benchmark:

Portfolio TTM Returns as of November 2016

Total fund TTM is 7.989%, while the benchmark is 6.705%: so when you take into account all ups and downs over the past year, we are still doing pretty well.

Of course, let’s remember that I am a dividend investor, and that is where I count the majority of my returns. November was a good month: total income was practically double the benchmark income (97.514% more to be exact), and TTM income is also exceeding the benchmark, by 7.918%.

Portfolio Monthly Income as of November 2016

Portfolio TTM Monthly Income as of November 2016

As I have just started to aggressively focus on my portfolios again, I don’t expect to have stellar returns in the short-term. However, as I plan out my F2017 goals, I expect that to change.

Onwards and upwards!

Portfolio Update – October 2016

October was not a stellar month, but like a ship through a storm, slow and stead wins the race. Here are the graphs for October 2016.


On a monthly basis, I was trending below the my benchmark, The Canadian Couch Potato Assertive Portfolio. For October, that portfolio returned a gain of 0.02%, and the total fund return for my own experienced a loss of 0.70%. However, my certificated portfolio managed to beat the benchmark handily, clocking in at 1.74%, a clear winner.


On a trailing twelve month basis, overall I am still beating the benchmark. The Assertive Portfolio benchmark for the last twelve months returned a gain of 7.14%, whilst my total fund returned 10.20%, a handy 3+% increase over the benchmark. I expect this trend to stabilize over the coming months, as some of my large sales earlier this year to fund some major purchases start rolling off of the TTM calculations. But for now, my key Margin, Total Portfolio, and TFSA measures are beating the benchmark.

In September I set up automatic synthetic DRIPs in my LIRA account to automatically re-invest dividends as they become available. The synthetic drip allows me to constantly grow the portfolio whilst negating commission costs, reducing the overall amount of cash in the portfolio (which I consider a massive point of friction, since the cash sits there generating zero returns). October was the first full month of synthetic DRIP in the LIRA account, and as the months move forward, I expect the LIRA to exceed the benchmark, since the LIRA is investing monthly, but the benchmark is only designed to re-balance every six months (which is an accurate representation of what may happen in the real world).


Reviewing the passive income statistics, the benchmark portfolio returned $204.15 in passive income, and my own passive income exceeded that by 83.74%, which was a great accomplishment.


On a trailing twelve month perspective, I am still exceeding the benchmark in total passive income. Benchmark TTM passive income was $5961.89, and the TTM passive income of my own portfolio beat that by 4.40%. The makeup of my portfolio has changed since I started maintaining it on a regular basis again, however the weightings of major dividend players are still low relative to the portfolio as a whole. I expect TTM passive income to level off relative to the benchmark, but within the next twelve months I expect to be in a position to beat the benchmark on a monthly basis as I re-weight the portfolio for a more even income allocation.

I have set up a number of recurring OCPs to automatically invest in my certificated account on a monthly basis. Specifically, Telus, Emera, Fortis, and Bank of Nova Scotia are now receiving automatic contributions from my paycheque every month. While this is a drag on disposable income, because these are all strong dividend players, I expect the long term gains to far outweigh the short term pain of not having “play money”.

Onwards and upwards!

Portfolio Update – September 2016

An investment portfolio is like a garden: you have to constantly maintain it to watch it grow. Otherwise it becomes overrun with weeds, and ultimately turns into an utter mess. Such is the state of my own portfolio…I stopped monitoring/caring for it on a regular basis in 2015, and this is the first month I have sat down to really review it, and see where it sits. Reviewing the historical performance against some benchmarks, things are dreadful. But, with some tender loving care, I’m going to right the ship and get back on the road to successful returns.

Before I begin, a note on benchmarking. I consider the Canadian Couch Potato, specifically the “Assertive” portfolio, as my benchmark. The reason being, if I had zero time to look at my portfolio, this is the portfolio I would assemble, rebalancing twice annually. In building some comparison returns, I have built a parallel portfolio as follows, based on the Assertive portfolio:

  • Initial portfolio value is $100,000, with a seed period of May 2014.
  • Because the model portfolio uses VXC, which only came into existence in mid-2014, the first few months of the portfolio used 75% VCN and 25% VAB, and starting in July 2014, 50% VCN, 25% VAB, and 25% VXC. Realistically this no bearing on current analysis or future analysis, as July 2014 is more than twelve months back, and thus out of range for TTM calculations.
  • The portfolio is rebalanced every January and July.
  • Dividends are retained until the next rebalancing period.
  • Each period of rebalancing incurs $59.70 in commissions: at $9.95/trade, this is for three sells, and three buys. This is representative of what I would pay at my own discount brokerage. I know that I may not do three outright sells and/or three outright buys (i.e. I may only add to a position), but this simplifies compiling the benchmark.

Moreover, because I am a dividend investor, I track a separate portfolio which projects what I would receive in dividends if my entire portfolio was invested in the Assertive portfolio. E.g. if my portfolio value were $500,000 in a given month, what the dividend income would be from the Couch Potato’s Assertive portfolio if I had the $500,000 invested in the appropriate proportions of VAB, VXC, and VCN, based on dividends for each of those ETFs for that month.

With a discussion on benchmarks out of the way, lets see the portfolio performance for September 2016, and the TTM (trailing twelve months) up to and including September 2016:

In total, I have five portfolios:

  • Margin. My regular trading account. This is a non-registered account where I do the majority of my trading once my RRSP and TFSA are maxed out. I also have some US companies in here for US dividends, which I use to pay for any US purchases.
  • RRSP. My RRSP account, which is the bulk of my portfolio. Locking in the majority of my dividend income in this portfolio is a smart move, since it prevents me from spending it or using dividends from those companies for day to day spending.
  • TFSA. My tax free savings account portfolio, which I typically contribute to once my RRSP is maxed out.
  • Certificated. This portfolio is relatively small, and is where I keep all of my certificated holdings. This portfolio is where I do all of my DRIP investing. All positions in this portfolio are registered directly in my name, and all companies hold fractional shares due to the nature of DRIP investing. Moreover, they are held directly at Computershare or CST Trust Company. Finally, I have regular monthly contributions to these positions via direct debit from my banking account; this is a great feature of DRIPs because I can purchase shares on a regular basis commission free, and take advantage of dollar cost averaging.
  • LIRA. I have a locked in retirement account for when I cashed out my pension at one of my previous employers.

Each portfolio has a varying mix of sectors, and I also track the total fund return which is the total return of all portfolios. This is my main measure of success. Reviewing the above, my total fund on a monthly basis has been near or above the benchmark portfolio, with a dip in the most recent periods. You’ll also notice a big drop in the certificated portfolio in December 2015, mainly driven to a drop in Telus during that period. On a trailing twelve months perspective, total fund has been relatively good, picking up post-March 2016 after I started selling things off to pay for our new house: I had sold a number of laggards during that period, which boosted overall returns on a go-forward basis. The above also includes liquidating a large percentage of my portfolio to buy a new house earlier this year, as well as paying off my student loans in late 2015.

With regards to dividend income, these two charts tell the story:

You’ll notice that the income from the benchmark portfolio is somewhat lumpy; this is because the equity ETFs (VXC, VCN) only pay a dividend quarterly, whereas the fixed income ETF—VAB—pays monthly. Because of this, every quarter my total fund passive income is relatively lower than the benchmark. However, you’ll notice that the trailing twelve month total passive income is consistently relatively higher – this shows that overall, even though on some quarters I am lagging behind my benchmark, on an annualized basis (i.e. TTM) I am still ahead. Ergo, to date my own dividend choices have been better than those of the benchmark. The drop in relative excess dividend income starting in December 2015 was due to the selloffs mentioned above for paying down student loans, and a new house purchase.

Reviewing the historical results, things aren’t as great as I would like them to be, but they aren’t horrible either. A big challenge was that I sat on a large pile of cash and didn’t even do something as simple as investing that cash in a broad market index fund to generate some returns; it sat there as cash, generating literally 0.00% return for 6+ months! But now that I am refocusing, I’m looking to right those previous errors.

Here’s hoping October shapes up to be a little better.

Onward and upwards!

Portfolio Update – September 2014

September was a brutal month for returns, but I did manage to fix the asset allocation a little by going long some CBO.TO in my TFSA. Reviewing the results, using traditional methods my returns are down -2.44%, however if we use the Modified Dietz method, I am actually up 2.00%. This just goes to illustrate how the timing of your trades in a given period can greatly affect your perceived returns (in this case, I gained 4.44% due to the purchase of CBO.TO, all things being equal).

2014-09 Monthly Performance

2014-09 TTM Performance

The benchmark was down as well at -1.25%, and this month has put a drag on my Sharpe ratio, which dropped from .45 to .38.

As I said, I also purchased some CBO.TO (250 shares to be exact), which has improved my weights a little. Last period my fixed income was 5.6% (target range 20.0%-30.0%), and this month it is up to 8.0%. Only a 2.4% bump, but more than I had before.

2014-09 Asset Mix Allocation by Asset Class

These short-term fluctuations in the market don’t worry me too much — I am still making good progress overall, at 19.82% for the last twelve months.

Portfolio Update – August 2014

Once again, we are up over the benchmark, clocking at at 1.65% for the month of August vs. the benchmark’s 1.30%, giving us a sharpe ratio of 0.45.

The biggest drag in this reporting period was High Liner Foods, which has a 5.78% weighting in the portfolio, and which suffered a 14.53% loss due to lower than expected earnings (see this link). The biggest gain was from Brookfield Asset Management at 6.81%, which has a weight of 7.31% in the portfolio. The gain in BAM-A.TO was likely due to improved confidence due to higher net profits in the quarter.

On to the graphs!

2014-08 Monthly Performance

2014-08 TTM Performance

2014-08 Asset Mix Allocation by Asset Class

2014-08 Asset Mix Allocaiton by Geogrpahic Region

No change from last week with respect to weightings, but I am at the point where I can sink some cash into fixed income. The fixed income component should be up by 2.00% by next reporting period, if all things go to plan.

Portfolio Update – July 2014

The year continues to be a good one, and July was no exception. Sharp Ratio was 0.44, which is better than the last reporting period. Month over Month was up 1.82%, beating the benchmark return of 0.43% by over four fold! TTM is still north of 20.00%, although it has dipped isnce last period, coming at 23.09% vs. 23.45% in June.

The biggest losers this period were Front Street Growth Fund, which last 8.36%, and the biggest gain was in Intel, up 12.04%.

On to the graphs!

Monthly Performance 2014-07

TTM Performance 2014-07

Asset Mix Allocation by Asset Class 2014-07

Asset Mix Allocation by Region 2014-07

Observing the above it is clear that my weightings are still an issue. I am not losing sleep over it, and I still haven’t reached my $5,000 minimum before pulling the trigger on a new investment. As I get closer to that target though, I am looking for some fixed income ETFs to round out the portfolio.

Portfolio Update – June 2014

Skipped the May update, but the results are baked into here.

Overall I am still happy with the way that things are going. Sharpe ratio for this period is just south of 0.40, and I am still consistently exceeding my benchmark portfolio. May and June were up 1.49% and 1.37% respectively, vs. the benchmark of 0.76% and 0.23% for the same months. The S&P/TSX (using XIC as a proxy) was down 0.09% and up 3.32% over the same periods.

I am still concerned about my asset allocation, since I am not making any of my targets. I will be re-balancing when I have a minimum of $5M to work with though..

On to the graphs.



201406_Asset Mix Allocation by Asset Class

201406_Asset Mix Allocation by Geographic Region

Portfolio Update April 2014

This is the first month of a real portfolio update since November 2012. I have effectively ignored my portfolio for the past 16 months. That said, how did we fare?

Monthly Performance 2014-04

Here we have the monthly performance for the past 12 months. Reviewing the results, for the past 12 months I have beat my benchmark for 9 out of 12; so 75% of the time. Not bad. More importantly, my Sharpe Ratio has been positive, which means that, on a risk adjusted basis, I am making gains, also important!

How about the trailing twelve months?

TTM Performance 2014-04

You’ll notice that there are no results for May 2013-November 2013; this is because I haven’t entered enough historical pricing information for the portfolio, so I don’t have any results for those periods. For my May 2014 update, I should have a full TTM graph available. However, for months where I have data, I have beat the benchmark handily.

Finally, the asset allocation..

Asset Mix Allocation 2014-04

As suspected, I am heavily weighted in equities, and my fixed income exposure is definitely below the acceptable range: equity is over by 28.5% and fixed income us under by 19.0%. I am making a concerted effort to fix that in the coming months by reallocating cash towards fixed income.

Some notes on all of this..

While I have effectively ignored my portfolio, I did make some calls based on research for my courses (Value Investing saw me purchasing Logsitec (Class B) and Rock-Tenn Paper Corp. Logistec is up 39.3% since I purchased it in the fall of 2013; Rock-Tenn hasn’t been doing so well but I am patient). I’ve also taken some money off the table to pay for my wedding and unwind some debt.

I’ve also revisited my benchmarking. Before I compared myself against five benchmarks: three Couch Potatoes, XIC, and XIU. This was silly, and it was merely a numbers game. The results going forward will be based off of a new benchmark composed of 20% Canadian Equity, 20% US Equity, 20% International Equity, and 40% Canadian Fixed Income. If I were a truly passive investor, this is what I would be investing in. If I come up on new portfolios that may interest me (e.g. Fundamental Indexing) then I’ll switch things up, but I am taking a more realistic approach: what would I invest in now if I was passive? This means that, if I switched later to Fundamental Indexing I would not retroactively compare my returns. This will give me a better snapshot of how my real performance ranks against what I might have done if I was purely an ETF investor.

Finally, I have been giving some thoughts to how to measure performance vis-a-vis making actual trades. I do some funky math right now to generate returns on a monthly basis when taking trades into consideration, but I am going to see if I can rework my workbooks to use a Modified Dietz approach, and then link those together for the TTM. Hopefully I can squeeze that in for the May or June update.