Thursday, July 5, 2012

Low PE and Moderate Dividend Portfolio Update

Well, we’ve done it now for 6 months. In March our model portfolio was on a tear, projecting literally ‘blistering’ returns. Then the European crisis reared its ugly head. So how is our ‘Low PE and Moderate Dividend’ Portfolio doing?
Four (4) companies have increased their dividends (marked red on the table below). In absolute terms, total annual dividends have increased from $4426.14 to $4540.24 but due to the appreciation of the shareholdings by 8.6%, dividend yield has decreased from 4.44% in January to 4.29% today.
In March, unrealized capital gains were a whopping $16,907.51 but since then we had to give some back and today our capital gains are a much more modest $8,360.91. If the portfolio’s value would no further increase during the remainder of the year, our total return on investment would be 12.65%. The annualized compounded return to date is an impressive 22.4%. 
Assuming that our portfolio would increase by a further 10%, our year-end return would be 23.09% rather than our projected return of 31.62% as calculated in March, but still impressive. In fact, when compared with the TSX60 ETF (symbol XIU) which returned including dividends a compounded annual rate of 1.4% our model portfolio’s performance is outright sensational.  I wish my entire portfolio was like the ‘Low P/E and Moderate Dividend’ Portfolio. Alas! That is not the case.
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