Sign in / Join
1759

Gordon Pape: My High-Yield Portfolio continues to exceed expectations

SecurityWeight %Total sharesAvg. priceBook valueCurrent priceMarket valueRetained incomeGain/Loss % KEG.UN-T8.5180$15.61 $2,809.30 $20.05 $3,609.00 $185.33 35.1 ALA-T7.3100$33.46 $3,346.00 $30.98 $3,098.00 $87.50 -4.8 VET-T8.170$53.84 $3,768.80 $49.41 $3,458.70 $361.20 1.4 EIF-T10.9120$27.25 $3,270.00 $38.90 $4,668.00 $243.90 50.2 PBH-T1370$19.49 $1,364.30 $79.46 $5,562.20 $406.53 337.5 MSI-T11.4250$12.54 $3,134.40 $19.43 $4,857.50 $203.55 61.5 PPL-T10100$29.09 $2,932.35 $42.70 $4,270.00 $432.08 60.4 SLF-T13.8120$25.53 $3,063.55 $49.27 $5,912.40 $276.73 102 CHE.UN-T8.6190$17.13 $3,253.90 $19.22 $3,651.80 $253.50 20 DR-T7.4170$21.85 $3,714.50 $18.50 $3,145.00 $95.63 -12.8 Cash1$439.60 $460.30 Total100$31,096.70 $42,692.90 $2,545.95 45.5 Inception$24,947.30 81.3

Comments: Although some interest-sensitive stocks lost ground in the latest quarter, this portfolio still managed a gain of 7.1 per cent during the period thanks to strong contributions from Premium Brands and Sun Life Financial. As of our fifth anniversary, we have a cumulative gain of 81.3 per cent, which works out to an average annual compound rate of return of 12.64 per cent. This is well in excess of our target.

Changes: Although AltaGas and Medical Facilities Corp. are off to poor starts, both companies offer very attractive yields, so we will keep them in the portfolio for now. All of the other securities are performing to expectations.

We will use some of our retained earnings to add to a few positions, as follows:

MSI – We will buy 10 more shares at $19.43, for a total cost of $194.30. That will bring our total to 260 shares and leave $9.25 in the cash reserve.

PPL – We have enough cash to buy another 10 shares, for a cost of $427. Our total position is now 110 shares, leaving us with cash of $5.08.

CHE.UN – We will buy 10 shares at $19.22, for a cost of $192.20. That will leave cash of $61.30 and bring our total unit count to 200.

Remember, do not do small trades like this unless you have a fee-based account. Otherwise, use dividend reinvestment plans if available.

We now have total cash of $2,192.75, which we will keep on deposit with EQ Bank earning 2 per cent.

Here’s a look at the revised portfolio. I will revisit it in September.

SecurityWeight %Total sharesAvg. priceBook valueCurrent priceMarket valueRetained income KEG.UN-T8.5180$15.61 $2,809.30 $20.05 $3,609.00 $185.33 ALA-T7.3100$33.46 $3,346.00 $30.98 $3,098.00 $87.50 VET-T8.170$53.84 $3,768.80 $49.41 $3,458.70 $361.20 EIF-T10.9120$27.25 $3,270.00 $38.90 $4,668.00 $243.90 PBH-T1370$19.49 $1,364.30 $79.46 $5,562.20 $406.53 MSI-T11.4260$12.80 $3,328.70 $19.43 $5,051.80 $9.25 PPL-T10110$30.54 $3,359.35 $42.70 $4,697.00 $5.08 SLF-T13.8120$25.53 $3,063.55 $49.27 $5,912.40 $276.73 CHE.UN-T8.6200$17.23 $3,253.90 $19.22 $3,844.00 $61.30 DR-T7.4170$21.85 $3,714.50 $18.50 $3,145.00 $95.63 Cash1$460.30 $460.30 Total100$31,096.70 $43,506.40 $1,732.45 Inception$24,947.30

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.