Rate of Return: 9.4%
Initial Value $20002.30
March 26, 2012
Update Value $64496.84
March 24, 2025
SMALL GAIN FOR GLOBAL PORTFOLIO
By Gordon Pape, Editor and Publisher
I’ve always been a firm believer in the importance of geographic diversification. Yes, the US markets normally lead the way, but not always. This is one of those “not always” times.
Donald Trump won’t admit it, but his tariff wars are shredding what appeared to be a good year for the US economy and its stock indexes. And it may get worse.
As a result, the US-based investments in our Global Portfolio took a hit in the latest six-month period. Fortunately, positive results from the TSX and overseas markets allowed us to emerge with a small gain for the period.
This portfolio invests in passive ETFs that cover most of the world’s markets, with a heavy weighting to Canada and the US.
It was launched in March 2012. It is designed to provide an international model for growth-oriented investors, with the diversification and low costs that ETFs offer. The target annual rate of return is 8-10%.
The portfolio invests in eight domestic, American, and international ETFs, covering all parts of the globe. Investors should only track this portfolio if they are willing to accept stock market risk.
Here’s a look at how our ETFs have performed since the last update in September. Results are as of the afternoon of March 19.
iShares Core S&P/TSX Capped Composite Index ETF (TSX: XIC). This ETF tracks the performance of the S&P/TSX Composite Index. Like other North American indexes, the TSX is down this year, but it has held up better that its US counterparts. As a result, the units are up $2.04 from our last review. We received one quarterly distribution for a total of $0.24 per unit.
iShares S&P/TSX Small Cap Index ETF (TSX: XCS). This ETF tracks Canadian small cap stocks. Small caps continued to gain in the latest period, with these units up a modest $0.32. We received one quarterly distribution of about $0.05 per unit.
iShares US Small Cap Index ETF (CAD-Hedged) (TSX: XSU). US small cap stocks had been doing well but the threat of tariffs and the market retreat has knocked them back. The units are down $2.31 from the last review. We received a semi-annual distribution in December.
iShares Core S&P 500 Index ETF (CAD-Hedged) (TSX: XSP). This ETF tracks the performance of the S&P 500. It was doing very well until Mr. Trump’s tariffs came along. That turned a strong bull market into a correction, with the units losing $0.93 in the latest period. We received a year-end distribution of $0.39 in December.
BMO Nasdaq 100 Equity Hedged to CAD Index ETF (TSX: ZQQ). This fund provides exposure to the top 100 stocks on the Nasdaq exchange. The recent pull-back in the tech sector cost this ETF $2.78 per unit in the latest period. It could have been worse – and maybe it will be. We received a year-end distribution of $0.54 per unit.
iShares MSCI EAFE Index ETF (CAD-Hedged) (TSX: XIN). This ETF tracks markets in Europe, Australasia, and the Far East. Despite the on-going problems in China, the stock markets in those countries posted positive returns during the period and these units gained $2.16. We received a semi-annual distribution of $0.43 per unit in December.
iShares MSCI Frontier and Select EM ETF (NYSE: FM). BlackRock closed this ETF in January because of lack of liquidity. We received a final payout of $27.23 per unit. With retained earnings, we have a total of $1,188.08 to reinvest.
iShares MSCI Emerging Markets ETF (NYSE: EEM). After a long losing streak, emerging markets are on a run. After a gain of $3.07 per unit in the previous six-month period, these units added another $0.17 between September and March. We received a year-end distribution of $0.29 per unit.
We had cash and retained income of $1,954.24, which we moved to the EQ Financial 30 Day Notice Savings Account, which was paying 4.25%. We received interest of $41.53.
Here’s a look at how the portfolio stood at on March 19. The Canadian and US dollars are treated at par, and commissions are not considered. The percentage in the Gain/Loss column represents the cumulative return since the portfolio was launched or since the security was added. The initial book value was $20,002.30.
IWB Global Portfolio (a/o March 19/25)
|
Security |
Weight |
Total |
Average |
Book |
Current |
Market |
Retained |
Gain/ |
|
XIC |
19.9 |
310 |
$23.04 |
$7,143.25 |
$40.06 |
$12,418.60 |
$318.46 |
+78.30 |
|
XCS |
5.8 |
170 |
$16.28 |
$2,767.20 |
$21.15 |
$3,595.50 |
$137.93 |
+34.9 |
|
XSU |
11.9 |
185 |
$17.96 |
$3,527.35 |
$40.00 |
$7,400.00 |
$228.06 |
+116.3 |
|
XSP |
21.7 |
230 |
$18.29 |
$4,206.10 |
$58.78 |
$13,519.40 |
$435.05 |
+231.8 |
|
ZQQ |
24.2 |
110 |
$21.44 |
$2,358.40 |
$137.10 |
$15,081.00 |
$381.26 |
+555.6 |
|
XIN |
10.5 |
170 |
$21.76 |
$3,698.75 |
$38.57 |
$6,556.90 |
$369.01 |
+87.3 |
|
FM |
1.8 |
40 |
$35.18 |
$1,407.25 |
$27.23 |
$1,089.20 |
$98.88 |
-15.6 |
|
EEM |
3.8 |
55 |
$43.29 |
$2,381.20 |
$45.22 |
$2,487.10 |
$159.29 |
+10.7 |
|
Cash |
0.4 |
$140.40 |
$221.20 |
|
||||
|
Total |
100.0 |
$27,629.90 |
$62,368.90 |
$2,127.94 |
+132.9 |
|||
|
Inception |
$20,002.30 |
+222.4 |
Comments: The stock market drop resulting from the Trump tariff war eroded most of the gains we made over the fall and winter. However, we did end up with a modest advance thanks to a good performance from the TSX and overseas markets
The total value as of March 19 was $64,496.84, up from $64,000.66 at the September review.
The gainers were XIC (TSX), XIN (EAFE), and EEM (emerging markets). ZQQ (Nasdaq).was the biggest loser.
As a result, our cumulative gain since inception improved to 222.4%. That works out to a compound average annual growth rate of 9.41%. That’s well within our original target range.
Changes: We have $1,188.08 from the closure of FM to reinvest. We will add that money to EEM by buying 30 units at $45.22, for a total cost of $1,356.60. We’ll make up the difference by using EEM’s retained earnings of $159.29 and taking $9.23 from cash.
We will keep our cash and retained income of $2,081.78 in the EQ Bank 30 Day Notice Savings Account, which is paying 3%.
Here is the revised portfolio. I’ll review it again in September.
IWB Global Portfolio (revised March 19/25)
|
Security |
Weight |
Total |
Average |
Book |
Current |
Market |
Retained |
|
XIC |
19.8 |
310 |
$23.04 |
$7,143.25 |
$40.06 |
$12,418.60 |
$318.46 |
|
XCS |
5.6 |
170 |
$16.28 |
$2,767.20 |
$21.15 |
$3,595.50 |
$137.93 |
|
XSU |
12.0 |
185 |
$17.96 |
$3,527.35 |
$40.00 |
$7,400.00 |
$228.06 |
|
XSP |
21.6 |
230 |
$18.29 |
$4,206.10 |
$58.78 |
$13,519.40 |
$435.05 |
|
ZQQ |
24.1 |
110 |
$21.44 |
$2,358.40 |
$137.10 |
$15,081.00 |
$381.26 |
|
XIN |
10.5 |
170 |
$21.76 |
$3,698.75 |
$38.57 |
$6,556.90 |
$369.01 |
|
EEM |
6.1 |
85 |
$43.97 |
$3,737.80 |
$45.22 |
$3,843.70 |
$0 |
|
Cash |
0.3 |
$211.97 |
$211.97 |
||||
|
Total |
100.0 |
$27,650.82 |
$62,627.07 |
$1,869.77 |
|||
|
Inception |
$20,002.30 |
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