As part of a larger portfolio rationalization I have decided to sell my Canadian equities and move the funds to one or more Canadian Equity index funds. Accordingly, today I sold Power Corp (POW.TO) and moved the proceeds to my existing TSX Fund, the iShares S&P/TSX 60 Index Fund (XIU.TO). XIU is a four-star rated ETF with high liquidity that is indexed to the TSX 60 Index.
- Sell POW.TO @ $27.10
- Buy XIU.TO @ $18.40
The two trades described above are part of a broad portfolio rationalization that includes many trades. This postmortem will cover all of these trades.
Writing today, 30th March, the performance of the ETFs that I bought has been as follows:
|Ticker||Name||Buy Price||Today’s Price||% Gain|
|XIN.TO||iShares MSCI EAFE Index Fund CAD Hedged||$18.73||$19.42||3.68%|
|XEM||iSHARES MSCI EMERGING MKTS IDX FD||$24.74||$24.45||-1.17%|
|XDV.TO||iShares Dow Jns Cnd Slct Dvdnd Indx Fnd||$22.33||$22.30||-0.13%|
|XIU.TO||iShares S&P/TSX 60 Index Fund||$18.40||$18.34||-0.33%|
|Average Increase in assets bought||1.49%|
The performance of the stocks and ETF that I sold is:
|Ticker||Name||Sell Price||Today’s Price||% Gain|
|COS.TO||Canadian Oil Sands Ltd||$20.52||$20.94||2.05%|
|POW.TO||Power Corporation of Canada||$27.10||$27.30||0.74%|
|IVV||iShares S&P 500 Index (ETF)||$150.94||$157.33||4.23%|
|Average Increase in assets sold||2.06%|
So, the ETFs that I bought are up 1.49% in a month, which is good. But the stocks and ETF that I sold are up 2.06%, which is a missed profit of 0.56%. How do we assess this set of trades? Well, the purpose was to stabilize the portfolio and reduce its volatility, which I think we have achived. The gains in the stocks that I sold were primarily due to only one stock – Intel (INTC). To stay in those stocks would have been speculation, which is not something I want to do with the main portion of my portfolio. I will call this a “mixed call”; neither good nor bad.