Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
$1.99
per week
for 24 weeks
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Three years ago, in November 2012, I started a Canadian mini portfolio for people who don't have a lot of money to invest. The inspiration was e-mails from two readers. Their GICs had come up for renewal and they were dissatisfied with the rates being offered. My goal was to provide an alternative that would have the potential for better returns than those available from GICs, with limited risk.

Three years later, the rates being quoted for GICs are even lower than they were when the portfolio began. Royal Bank is offering only 1.5 per cent on a five-year term while the best five-year rate from a small institution is 2.5 per cent.

The mini portfolio that I created included three securities: the common stock of BCE Inc. and Scotiabank, plus preferred shares from Laurentian Bank of Canada. The original book value was $14,984.55.

The Laurentian Bank preferreds were subsequently redeemed. In their place, I substituted the 5.75 per cent convertible debentures from Firm Capital Mortgage Investment Corporation.

The portfolio was last reviewed in August, at which time it was showing an average annual compound rate of return of 8.4 per cent. Let's look at it again on its third anniversary, based on prices on the morning of Nov. 6.

BCE Inc. (BCE-T). BCE stock has bounced back after a tough summer and the share price is up $4.08 since our last review. We also received a dividend of $0.65 per share for a total return of 9 per cent in less than three months.

Bank of Nova Scotia (BNS-T). Scotiabank also recovered some lost ground during the period, gaining $3.07 per share. With a dividend of $0.70 added on, we're up 6.4 per cent for the latest period.

Firm Capital Mortgage 5.75 per cent Convertible Debentures (FC.DB.A-T). At the time of the last review these debentures were trading at$100.51 so they have lost a bit of ground. They pay interest at the rate of 5.75 per cent semi-annually, on April 30 and Oct. 31 so we received a semi-annual interest payment of $28.75 for each $1,000 debenture at the end of October. We have 55 shares for the equivalent of 5.5 debentures so that amounted to $158.13.

We also received interest of 42 cents from the cash invested in a high-interest savings account.

Here is how the Canadian Mini Portfolio stood on the morning of Nov. 6.

Desktop users click on image to enlarge

Comments: The total portfolio value, including retained income, is up 6.3 per cent from the last review, a nice move in a short time frame. Since inception, the portfolio has gained 32.7 per cent, which translates into an average annual compound rate of return of 9.9 per cent. That's a lot better than any GIC would have done over the same period.

We do not have enough cash to add to any of our positions at present so we will leave the portfolio intact for now and review it again in May. We'll keep our cash of $525.61 in a high-interest savings account paying 0.8 per cent.

Gordon Pape is Editor and Publisher of the Internet Wealth Builder and Income Investor newsletters.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

Latest Videos

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies