22.6%
GROWTH PORTFOLIO POSTS GAIN
By Gordon Pape, Editor and Publisher
It’s been a rough year for the markets, as even the most casual observer knows. All the major indexes are down year to date. That’s why I’m pleased to report our Growth Portfolio registered a gain in the latest six-month period. Not a big one, but any profit these days is welcome.
We created the IWB Growth Portfolio 10 years ago this month, in August 2012. It had an initial value of $10,000 and a target annual growth rate of 12%. Readers should keep in mind this is a high-risk portfolio, with 100% exposure to the equity markets. It’s not a place for cautious investors.
Here are the securities that make up the current portfolio, with an update on how they have performed since our last review in March. Prices are as of the close on Aug. 24.
iShares US Aerospace and Defense ETF (BSX: ITA). As the name suggests, this ETF invests in the US defense and aerospace industry. We added it to the portfolio in March, based on its long-term record of profitability and the heightened tension in Europe. The units lost a little ground during the market turbulence of the past few months, dropping $1.61. We received two distributions for a total of $0.438 per unit.
Alimentation Couche-Tard (TSX: ATD, OTC: ANCUF). Alimentation operates convenience stores in Canada, the US, and Europe. The stock was one of the few to gain ground during the sell-off in the first half of the year and is up $8.77 since our last review. The company pays a quarterly dividend of $0.11 a share.
WSP Global Inc. (TSX: WSP, OTC: WSPOF). Montreal based WSP is an international engineering and design firm. The stock has been a big winner for us but slumped in the latest six-month period, losing $9.87 a share. We received two dividends totaling $0.75 per share.
iShares North American Natural Resources ETF (BSX: IGE). This fund invests in energy, mining, and forestry companies based in North America. The units are up $0.47 since we added it to the portfolio in March. Frankly, I was expecting more given the strong showing of the oil and gas sector, but we’ll hold on to it for a little longer. We received two distributions for a total of $0.453.
Amazon.com (NDQ: AMZN). Amazon shares split 20-1 in the latest period, but the stock still lost ground in the broad tech sell-off. The good news is that it’s well off its 52-week low of $101.26. Amazon does not pay a dividend.
Apple Inc. (NDQ: AAPL). While the tech sector was selling off, Apple shares actually gained $9.35 (5.9%) in our six-month period. We received two dividends of $0.23 each.
Costco (NDQ: COST). Costco shares gained $11.87 since March. We received two dividends totaling $1.80 per share.
United Parcel Service (NYSE: UPS). This is the world’s largest package delivery company and is on the leading edge of new delivery technologies, especially in the healthcare sector. The shares lost a little ground in the latest period, dropping $3.66. We received two dividends of $1.52 each.
Cash. We received interest of $14.78 on our cash holdings at EQ Bank.
Here is how the portfolio stood at the close on Aug. 24. Commissions are not considered. The US and Canadian dollars are treated as being at par but obviously gains (or losses) on the American securities are increased due to the exchange rate differential.
IWB Growth Portfolio (a/o Aug. 24/22)
| Symbol | Weight
% |
Total
Shares |
Average
Price |
Book
Value |
Current
Price |
Market
Value |
Retained
Distributions |
Gain/
Loss % |
| ITA | 7.1 | 50 | $107.42 | $5,371.00 | $105.81 | $5,290.50 | $21.90 | -0.1 |
| ATD | 10.9 | 140 | $8.32 | $1,164.10 | $58.02 | $8,122.80 | $261.19 | +620.2 |
| WSP | 19.0 | 90 | $27.00 | $2,430.29 | $157.54 | $14,178.60 | $331.61 | +497.1 |
| IGE | 8.7 | 160 | $40.05 | $6,408.00 | $40.52 | $6,483.20 | $72.48 | + 2.3 |
| AMZN | 7.2 | 40 | $102.14 | $4,085.52 | $133.80 | $5,352.00 | 0 | +31.0 |
| AAPL | 17.9 | 80 | $30.43 | $2,434.07 | $167.53 | $13,402.40 | $409.64 | +467.4 |
| COST | 14.6 | 20 | $344.27 | $6,885.40 | $543.22 | $10,864.40 | $327.20 | +62.5 |
| UPS | 13.6 | 50 | $118.45 | $5,922.50 | $203.04 | $10,152.00 | $631.00 | +82.1 |
| Cash | 1.0 | $727.81 | $742.59 | |||||
| Total | 100.0 | $35,428.69 | $74,588.49 | $2,055.02 | +116.3 | |||
| Inception | $10,000.00 | +666.4 |
Comments: Four of the securities in the portfolio were up during the period with the biggest gains coming from Alimentation Couche-Tard, Costco, and Apple. The major losers were WSP Global and Amazon.
The total value of the portfolio (market price plus retained distributions) now stands at $76,643.51. That’s a gain of 1.3% since the March review. Not a lot, but any profits are welcome at this time.
For the 10 years since this portfolio was launched, we have a cumulative return of 666.4%. That’s an average annual compound growth rate of 22.59%. That’s well ahead of our target.
Changes: We’ll stand pat for now. All our stocks are in sound companies with good growth potential. The two ETFs add diversification in sectors that should perform well in the current environment.
Our total cash is now $2,797.61. We will move the money to Duca Credit Union, which is offering a special promotion rate of 3.25% interest.
I will review the portfolio again in March.
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