Model ETF portfolio – status update – October 2016

In June 2014, I built a model ETF portfolio to do some experiments with few low cost ETFs. We will check its status as of today.

A quick recap,

I built a model ETF portfolio using imaginary $10 000 and nine ETFs to do an experiment and compare the results with S&P 500 and S&P/TSX index.

By the S&P 500 was at 1937.78 and S&P TSX was at 15 040.43.

I told readers that I will try to update the portfolio status every month, unfortunately, I didn’t post any update after two months because of it was really hard to see big changes in a short-period of time. And, I became busy in my personal life (kid, work, etc) and I completely ignored it.

But, so many readers asked me about the updates. So, I spent last few days to collect the details to give you status update of the portfolio.

Without further due, we will check details.

Here is the target assets allocation I set for the model ETF portfolio:

• Bonds – 30%
• Preferred Share – 5%
• Real estate investment – 5%
• U.S stocks – 20%
• Canadian stocks – 20%
• International stocks – 20%

At inception, the estimated annual income from dividend/distribution was $342.86, with yield of 3.43% based on the initial value of $10 000.

The information posted on this website is for entertainment purpose only and should not be considered professional financial advice. I am not a financial professional, and I can buy, sell, or hold any investment at anytime.

Any transactions I publish are not recommendations to buy or sell any securities or investments.

Please do you own research or consult with a qualified financial advisor before make any investment decision.

I own some of the ETFs in my personal in portfolio (SDY, IDV, ZPR, XRE and CBO). (Check my personal investment portoflio here)

Since my last update (on August 17, 2014), the portfolio has generated $856.51 cash dividends/distributions.

Please note for simplicity purposes, I use 1 USD = 1 CAD.

Here is the current portfolio looks like (after the market closing of October 28, 2016):

In order to meet our target asset allocation, we will make the following purchases (purchase prices are at market close of October 28, 2016):

• 19 units of IDV at $29.12
• 2 units of CBO at $19.1
• 7 units of CDZ at $25.04
• 5 units of ZPR at $10.24
• 2 units of XPR at $17.7

Here is the updated portfolio:

With reinvestment, the estimated portfolio income has grown to $423.93 (based on current dividend rate) from 342.86 at inception. The increment is $81.07.

It is not very impressive return compare to U.S market and blue-chip dividend growth stocks; however, the portfolio may handle any down-turn market pretty smoothly because of its diversification.

Actually, two years relatively short period to conclude the performance, but it shows how someone with very little money can build a decent income using ETFs.

Really benefit of these types of model portfolio is that we could learn about how to (or how not to) invest, so, we could adjust our investment strategy based on the results from this dummy portfolio performances.

I will check back its status again in late January 2017.