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Gordon Pape: This RRSP portfolio has earned 10.8% annually Add to ...

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In February 2012, I created an RRSP portfolio for readers of my Internet Wealth Builder newsletter.

It had an initial value of $25,031.92 and was designed with two main goals. The first is capital preservation – as with any pension plan, you don’t want to lose money. The second is to earn a higher rate of return than you could get from a GIC.

Gordon Pape's RRSP portfolio (as of Feb. 3)

SecurityWeight per centSharesAvg. priceBook valueCurrent priceMarket valueRetained incomeGain/loss per cent
XSH16.2330$19.65 $6.685.90$19.58 $6,461.40 $96.79 -1.9
XBB6.685$32.42 $2,755.90 $30.99 $2,634.15 $123.93 0.007
FID23120.4200$31.83 $6,365.47 $40.81 $8,162 $341.31 33.6
BTG77421.4580$8.42 $5,099.83 $14.74 $8,549.20 $284.57 73.2
AIM17338.8400$8.85 $3,540.00 $8.80 $3,520 $0 -0.06
BEP.UN9.9100$27.86 $2,786.02 $39.47 $3,947 $421.50 56.8
BIP.UN15.5135$20.17 $2,723.40 $45.90 $6,196.50 $620.25 150.3
Cash1.2$484.11 $502.52 3.8
Totals 100$30,440.63 $39,972.77 $1,888.35 37.5
Inception$25,031.92 67.2

Comments: The portfolio turned in a small gain of 2.43 per cent in the latest six-month period, thanks to strong performances from the Beutel Goodman American Equity Fund and the Brookfield Infrastructure LP. The rest of our securities were more or less flat.

That brings the total return in the five years since this portfolio was launched to 67.2 per cent. That’s an average annual compound rate of return of 10.83 per cent, well in excess of our target.

Changes: The bond funds aren’t doing well at this point so we’re going to diversify our holdings. We will sell 130 units of XSH for $2,545.40 and invest the money in the TD High Yield Bond Fund (TDB626). It is priced at $6.80 per unit so we will buy 375 units. We’ll take $4.60 from cash to make up the difference.

We will buy another 20 units of Beutel Goodman American Equity Fund, to bring our total to 600. The cost is $294.80. We will use $284.57 from accumulated distributions and take the other $10.23 from cash.

We have enough retained income to buy another 10 units of Brookfield Energy Partners for $394.70. This will bring our total to 110 and reduce our retained income to $26.80.

Finally, we will buy 10 units of Brookfield Infrastructure LP for $459, leaving us with cash of $161.25.

We will reinvest our cash balance of $1,237.87 in the EQ Bank account, which now pays 2 per cent

Here is the revised portfolio. I’ll review it again in August.

Gordon Pape's RRSP portfolio (revised Feb. 3)

SecurityWeight per centSharesAvg. priceBook valueCurrent priceMarket valueRetained income
XSH9.5200$19.65 $3,930 $19.58 $3,916.00 $96.79
XBB6.485$32.42 $2,755.90 $30.99 $2,634.15 $123.93
TDB6266.2375$6.80 $2,550.00 $6.80 $2,550.00 $0.00
FID23119.9200$31.83 $6,365.47 $40.81 $8,162 $341.31
BTG77421.5600$8.99 $5,394.63 $14.74 $8,844.00 $0.00
AIM17338.6400$8.85 $3,540.00 $8.80 $3,520 $0
BEP.UN10.6110$28.92 $3,180.72 $39.47 $4,341 $26.80
BIP.UN16.2145 21/95$3,182.40 $45.90 $6,655.50 $161.25
Cash1.1$487.69 $487.69
Totals 100$31,366.91 $41,110.51 $750.08
Inception$25,031.92

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters. For more information and details on how to subscribe, go to buildingwealth.ca.

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