Values are as of Aug. 24, and some prices have fluctuated since then.
However, my strategy and comments remain unchanged.
MAXA Financial five-year GIC. Our original three-year GIC matured in February 2016. We reinvested the
$13,418.75 we received (principal and accrued interest) in a new five-year
GIC paying 2.5%, with annual payments, which are compounded. This GIC is
redeemable, so if rates rise significantly, we can cash in and trade up
(albeit with a penalty). The GIC will mature in February 2021.
iShares Floating Rate Index ETF (TSX: XFR). This ETF invests in a portfolio of floating-rate bonds, whose interest
payments are adjusted to reflect rate changes. It is trading at about the
same price we paid in February when we acquired it. We received $0.179 in
distributions, including the payment of Aug. 27.
CI Signature Dividend Fund A (CIG610).
This fund invests primarily in preferred shares and dividend-paying
large-cap stocks. The fund’s NAV is up $0.04 from the last review, and we
received distributions totalling $0.2511 per unit.
PIMCO Monthly Income ETF (TSX: PMIF). This ETF invests in investment-grade bonds from developed countries
around the world as well as some mortgage-backed securities. It pays
monthly distributions, which are currently running around $0.05 per unit.
The NAV was down $0.33 in the latest period, which was offset by
distributions of $0.3821.
Sentry U.S. Growth and Income Fund (CIG50237). This fund invests in a portfolio of U.S. dividend-paying stocks, both
common and preferred, with a large-cap bias. It is coming off another good
run with a six-month NAV gain of $1.18 and monthly distributions of $0.05
per unit, totaling $0.30.
BCE Inc. (TSX, NYSE: BCE).
BCE shares continued to decline, depressed in part by rising interest
rates. We lost $2.41 per share, which was only partially offset by two
quarterly dividends totaling $1.51.
Inter Pipeline (TSX: IPL, OTC: IPPLF).
The stock rallied in the latest six months, gaining $2.05 per share. We
received seven monthly dividends of $0.14 each (total $0.98), due to
Brookfield Infrastructure LP (TSX: BIP.UN, NYSE: BIP). This Bermuda-based limited partnership is trading at about the same level
as our last review. We received two distributions totaling US$0.96.
First Asset U.S. and Canada Lifeco Income ETF (TSX: FLI).
This ETF was added to the portfolio in February. It invests in a portfolio
of Canadian and U.S. life insurance companies. It’s been a disappointment
thus far, losing $0.96 in the six months since. Distributions totalled
$0.3481 per unit.
Cash. We kept the cash balance of $2,149.82 in a high-interest savings account
with EQ Bank paying 2.3%. Interest earned in the latest period was $24.72.
The following table shows the RRIF Portfolio as it stood at the close of
trading on Aug. 24. I have included the accrued interest for two years on
the GIC in the retained earnings column. Note that commissions are not
deducted, and that U.S. and Canadian currencies are treated at par.
Although this is a RRIF portfolio, withdrawals are not factored in, as this
would make it impossible to track performance accurately.
Comments: We recorded a gain of 2.6% in the latest period to Aug. 24, thanks mainly
to the contributions of the Sentry U.S. Growth and Income Fund and Inter
Since inception five and a half years ago, we have a cumulative total
return of 46.3%. That works out to an average annual compounded rate of
return of 7.16%. For a portfolio with a large weighting in GICs, preferred
shares, and bonds, that is a decent return. Our target is in the 5% to 6%
Changes: We will reinvest some of our accumulated earnings as follows:
– We will buy 40 units at a cost of $571.60. That will give us a new total
of 510 units and leaves us $10.37 in cash.
– We’ll add 10 units for a price of $228.90. That gives us 390 units and
leaves cash of $78.32.
– We have enough to buy 10 shares for $534.60. That brings our share count
to 140 and leaves cash of $120.41.
– Finally, we’ll add another 10 shares of Inter Pipeline, to bring the
total to 310. The cost will be $248.70, leaving cash of $143.83.
We have $679.32 of our cash in the compounding GIC. We will keep the
remaining cash of $1,272.96 in the EQ Bank account, which is still paying
The following table shows the revised portfolio at Aug. 24. I will review
it again in my Income Investor newsletter in February.
is one of Canada’s best-known personal finance commentators and
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Notes and Disclaimer
© 2018 by The Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned carry risk of loss, and no guarantee of
performance is made or implied. This information is not intended to provide
specific personalized advice including, without limitation, investment,
financial, legal, accounting, or tax advice. Always seek advice from your
own financial advisor before making investment decisions.
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