Initial Value $14,954.00
February 24, 2014
Update Value $18,111.46
August 15, 2016
In February 2014 I created a U.S. dollar mini portfolio for low-risk investors with limited funds. The goal was to improve on the return from a certificate of deposit (CD, the American equivalent of a GIC) while keeping risk to a minimum.
The average rate for a five-year CD as of Aug. 11/16 was 0.8%, according to Bankrate.com, although you could find better returns by shopping around.
For this mini portfolio, I chose a U.S. telecom stock, a big American bank, and a fixed-income ETF. The value of the portfolio at inception was $14,954. In February 2015, I switched the ETF from the PIMCO Income Opportunity Fund to the iShares Core U.S. Aggregate Bond ETF because I felt it better represented the broad U.S. bond market.
Comments: Despite the Wells Fargo setback, the portfolio performed well over the past year, gaining 13.7%. Since inception, the return is 21.1%. That works out to an average annual compound rate of return of just under 8%, well in excess of our target.
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