Getting out of Power Corp, Adding to TSX 60 Fund

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

PORTMORTEM

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%
n/a S&P Fund $129.79 $135.41 4.33%
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
AAPL Apple Inc. $445.00 $442.66 -0.53%
INTC Intel Corporation $20.25 $21.83 7.80%
T.TO TELUS Corporation $70.70 $70.16 -0.76%
COS.TO Canadian Oil Sands Ltd $20.52 $20.94 2.05%
POW.TO Power Corporation of Canada $27.10 $27.30 0.74%
n/a EAFE Fund $98.09 $99.79 1.73%
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.

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7 thoughts on “Getting out of Power Corp, Adding to TSX 60 Fund

  1. Hi. XIU.TO is an ETF with an MER of 0.18%, which is pretty low. I don’t plan to buy any mutual funds, with their 1.5-3% MERs. ETFs offer diversification (lots of holdings) with low MER.

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