Introduction
In June 2014, I built a low cost model ETF portfolio, using an imaginary $10,000, that could generate positive cash for long run with long-term growth. As mentioned, I will review the portfolio performance every month and re-balance it to meet the target asset allocations.
At inception, the portfolio’s projected annual income was $342.86, for a yield of 3.43% based on the initial value of $10 000.
Last month dividend/distribution
The portfolio has generated $76.86 dividend/distribution over the last one month period.
Current portfolio with dividend income
Here’s how the portfolio is now after the close of trading on July 17, 2014. Canadian and U.S. dollars are treated same as being at par for purposes of the calculations.
| ETF | # | Price | Total | Current % | Target % |
|---|---|---|---|---|---|
| XQB | 73 | $20.55 | $1,500.15 | 15.04% | 15.00% |
| CBO | 76 | $19.74 | $1,500.24 | 15.04% | 15.00% |
| ZPR | 15 | $14.34 | $215.10 | 2.16% | 2.00% |
| XPF | 16 | $19.90 | $318.40 | 3.19% | 3.00% |
| XRE | 13 | $16.41 | $213.33 | 2.14% | 2.00% |
| CGR | 13 | $23.48 | $305.24 | 3.06% | 3.00% |
| CDZ | 75 | $26.16 | $1,962.00 | 19.67% | 20.00% |
| SDY | 26 | $75.43 | $1,961.18 | 19.66% | 20.00% |
| IDV | 49 | $38.94 | $1,908.06 | 19.13% | 20.00% |
| Cash | $90.34 | 0.91% | 0.00% |
Rebalance
I will rebalance this portfolio every month with cash flow; therefore, I will simply add ETFs to meet the targeted assets allocation by reinvesting the cash generate by the portfolio.
From the table above, we could clearly see that ‘International Select Dividend ETF (IDV) has lost some value and little off from the target allocation. Thus, we will add two IDV ETFs using the cash we have.
Current portfolio
Here is what the current portfolio looks like as of July 17, 2014. Now the projected annual income is increased by 3.72 to $346.18.
| ETF | # | Price | Total | Current % | Target % |
|---|---|---|---|---|---|
| XQB | 73 | $20.55 | $1,500.15 | 15.04% | 15.00% |
| CBO | 76 | $19.74 | $1,500.24 | 15.04% | 15.00% |
| ZPR | 15 | $14.34 | $215.10 | 2.16% | 2.00% |
| XPF | 16 | $19.90 | $318.40 | 3.19% | 3.00% |
| XRE | 13 | $16.41 | $213.33 | 2.14% | 2.00% |
| CGR | 13 | $23.48 | $305.24 | 3.06% | 3.00% |
| CDZ | 75 | $26.16 | $1,962.00 | 19.67% | 20.00% |
| SDY | 26 | $75.43 | $1,961.18 | 19.66% | 20.00% |
| *IDV | *51 | $38.94 | $1,985.94 | 19.91% | 20.00% |
| Cash | $12.46 | 0.12% | 0.00% |
*Updated
Conclusion
The portfolio is in negative territory now, lost $25.96; however, it hard to conclude the results in one month as the model portfolio was designed for long-term.
Check the latest portfolio status update here.
Again, this is not a recommendation to buy or sell stocks; it is an experiment to see the performance of well diversified ETFs portfolio. Also, I assumed is no commission to purchase ETFs.
This looks like a well diversified portfolio of low-cost ETFs. I’m curious to know what is the total annual cost of the portfolio?
Thank you MRWF,
The total annual cost of the portfolio will be around 0.5%. I am thinking to let the portfolio run itself for long-run and compare then return with the index.
Cheers,
Cheers,
10% split among 4 funds seems a little inefficient…
Thank you Ben for stopping by,
I just split 5% to real-estate and 5% to preffered share to diversify the portfolio.
Best Regards,
I have a freedom fund that I’ve been agisersgvely building for the last two and a half years. My goal is to achieve financial independence by the time that I’m 45. Some back of the envelope math suggests that with my 50% savings rate and investment strategy I should be able to pull that off.I’m not interested in early retirement or anything. I really like my job right now. I just want the ability to walk off my job if things get bad in the future. Or if I am laid off, I would like to have the ability to casually look for a job that I want in a place I want to live instead of having to make a mad scramble for wherever will take me.