22.2%
BIG GAIN FOR GROWTH PORTFOLIO
By Gordon Pape, Editor and Publisher
“It was the best of times; it was the worst of times.” – Charles Dickens, “A Tale of Two Cities”.
If you’re a conservative investor with a portfolio full of bonds and interest-sensitive dividend stocks, these are indeed the worst of times. You probably want to run and hide when the monthly brokerage statement arrives.
But growth investors with well-selected, technology weighted portfolios can’t wait to open the envelope to see how much money they made last month. That includes anyone who modelled their investments on our IWB Growth Portfolio.
It has been a powerhouse performer ever since it was launched 11 years ago. The past six months were one of the best periods we have ever experienced, with all securities but one posting strong gains. We even had one stock double in value, a remarkable achievement in such a short time frame.
We created the IWB Growth Portfolio in August 2012. It had an initial value of $10,000 and a target annual growth rate of 12%. It’s 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 February. Prices are as of the close on Aug. 30.
iShares US Aerospace and Defense ETF (BSX: ITA). This ETF invests in the US defense and aerospace industry. We added it to the portfolio in 2021, based on its long-term record of profitability and the heightened tension in Europe. We posted a small gain of $0.67 per unit in the latest period and received two distributions for a total of $0.517 per unit.
Alimentation Couche-Tard (TSX: ATD, OTC: ANCUF). Alimentation operates convenience stores in Canada, the US, and Europe. This stock has been a huge winner for us and continues to generate handsome profits. It’s up $6.93 since our last review. The company pays a quarterly dividend of $0.14 a share. We received two payments during the period.
WSP Global Inc. (TSX: WSP, OTC: WSPOF). Montreal based WSP is an international engineering and design firm. Like Couche-Tard, this stock has been a big winner for us. It gained $15.67 in the latest six-month period, plus we received two dividends totaling $0.75 per share.
TFI International Inc. (TSX, NYSE: TFII). This Montreal-based trucking firm is a remarkable Canadian success story. We added it to the portfolio in February and since then the shares are up $15.15. We also received two dividends for a total of $0.939 a share.
Nvidia (NDQ: NVDA). Nvidia is the big beneficiary of the AI craze. The company makes computing chips for AI processors, and its sales have gone through the roof. We added the stock, which was recommended by contributing editor Adam Mayers, to the portfolio last February and it has more than doubled in the six months since. The dividend is a minuscule $0.04 per quarter but with gains like that, who cares?
Apple Inc. (NDQ: AAPL). Apple shares have recovered nicely since taking a hit early in the year. They are up $38.25 since our last review plus we received two dividends of $0.24 each.
Costco (NDQ: COST). After a big loss last winter, Costco shares rebounded strongly. They have gained $49.12 per share since February and we received two dividends totaling $2.04 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 ground in the latest period, dropping $7.33. That’s the second consecutive period the shares have been down. We received two dividends of $1.62 each.
Cash. We received interest of $65.86 on our cash holdings at Saven Financial.
Here is how the portfolio stood at the close on Aug. 30. 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. 30/23)
| Symbol | Weight
% |
Total
Shares |
Average
Price |
Book
Value |
Current
Price |
Market
Value |
Retained
Distributions |
Gain/
Loss % |
| ITA | 8.0 | 50 | $107.42 | $5,371.00 | $116.72 | $5,836.00 | $78.85 | +10.1 |
| ATD | 12.5 | 140 | $8.32 | $1,164.10 | $71.26 | $9,976.40 | $335.39 | +785.8 |
| WSP | 21.7 | 90 | $27.00 | $2,430.29 | $190.58 | $17,152.20 | $466.61 | +625.0 |
| TFII | 6.9 | 30 | $168.06 | $5,041.80 | $183.21 | $5,496.30 | $28.17 | +9.6 |
| NVDA | 13.0 | 40 | $236.64 | $9,465.60 | $492.64 | $19,485.60 | $3.20 | +109.1 |
| AAPL | 10.3 | 50 | $30.43 | $1,521.50 | $187.65 | $9,382.50 | $470.44 | +547.6 |
| COST | 13.6 | 20 | $344.27 | $6,885.40 | $542.26 | $10,845.20 | $404.00 | +63.4 |
| UPS | 12.4 | 50 | $118.45 | $5,922.50 | $172.01 | $8,600.50 | $950.00 | +61.3 |
| Cash | 1.6 | $727.81 | $1,232.67 | |||||
| Total | 100.0 | $35,428.69 | $88,007.37 | $2,736.66 | +156.1 | |||
| Inception | $10,000.00 | +807.4 |
Comments: All the securities but one were up during the latest six-month period. The biggest gain was posted by Nvidia, which more than doubled during that time. We also saw big contributions from Alimentation Couche-Tard, WSP Global, TFI International, Apple, and Costco. The only laggard was UPS, which has been on a downtrend for the past year.
The total value of the portfolio (market price plus retained distributions) now stands at $90,744.03. That’s a gain of 21.2% since the February review.
For the 11 years since this portfolio was launched, we have a cumulative return of 807.4%. That’s an average annual compound growth rate of 22.2%. That’s well ahead of our target.
Changes: You know what they say: “If it ain’t broke, don’t fix it”. But this is a momentum portfolio and UPS has lost that momentum. As a result, we’ll sell our position for a total of $9,550.50, including retained earnings.
We’ll replace it with CGI Group (TSX: GIB.A, NYSE: GIB). It’s a Montreal-based international consultancy company that has been on our recommended list since August 2012. The chart shows a long history of steady growth, and the shares are ahead 20.4% so far this year.
CGI is trading at $140.51. We’ll buy 70 shares for a cost of $9,835.70. We’ll take $285.20 from cash to make up the difference.
All else stays the same.
Our total cash plus retained earnings is now $2,734.15. We will move the money to Duca Credit Union, which is offering a high interest rate of 5.25% until Jan. 31, 2024, with no minimum requirement.
Here’s a look at the revised portfolio. I will review it again in February.
IWB Growth Portfolio (revised Aug. 30/23)
| Symbol | Weight
% |
Total
Shares |
Average
Price |
Book
Value |
Current
Price |
Market
Value |
Retained
Distributions |
| ITA | 8.0 | 50 | $107.42 | $5,371.00 | $116.72 | $5,836.00 | $78.85 |
| ATD | 12.5 | 140 | $8.32 | $1,164.10 | $71.26 | $9,976.40 | $335.39 |
| WSP | 21.7 | 90 | $27.00 | $2,430.29 | $190.58 | $17,152.20 | $466.61 |
| TFII | 6.9 | 30 | $168.06 | $5,041.80 | $183.21 | $5,496.30 | $28.17 |
| NVDA | 13.0 | 40 | $236.64 | $9,465.60 | $492.64 | $19,485.60 | $3.20 |
| AAPL | 10.3 | 50 | $30.43 | $1,521.50 | $187.65 | $9,382.50 | $470.44 |
| COST | 13.6 | 20 | $344.27 | $6,885.40 | $542.26 | $10,845.20 | $404.00 |
| GIB.A | 12.4 | 70 | $140.51 | $9,835.70 | $140.51 | $9,835.70 | $0 |
| Cash | 1.6 | $727.81 | $947.47 | ||||
| Total | 100.0 | $35,428.69 | $88,957.37 | $1,786.68 | |||
| Inception | $10,000.00 |
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