Time again for the monthly Smith Manoeuvre Portfolio update, June 2008 edition.
For those of you just joining us, The Smith Manoeuvre is a Canadian wealth strategy that utilizes a home equity loan to invest in income producing assets. The result is a tax deductible loan and portfolio that increases as you pay down your mortgage.
The markets are currently in correction mode which means it may be a good time to add to my positions. All the financial yields are up. It seems that some economists are predicting a global market crash, however, don’t let that phase you. If the markets do correct, see it as a good time to jump in!
Onto the business at hand, the portfolio. In terms of trading, the Bank of Nova Scotia position was doubled in addition to a small new position in the fundamental index ETF for U.S small-mid caps. Along with that, we initiated small new positions in BMO and a mutual fund management company that I was eyeing last month, AGF Management.
|Stock||Symbol||Shares||Avg Buy Price||Total||Div/Share||Yield|
|FTSE RAFI US 1500 Small-Mid ETF||PRFZ.US||20||$51.50||$1,029.99||$0.42||0.82%|
|AGF Management Limited||AGF.B.T||50||$22.71||$1,135.49||$1.00||4.4%|
|Bank of Montreal||BMO.T||25||$44.17||$1,104.24||$2.80||6.34%|
Total Portfolio Cost Base: $20,042.46
Total Dividends / Year: $796.75
Portfolio Dividend Yield: 3.98%
As you can see, the portfolio is still heavily weighted in financials, but it’s starting to get diversified into utilities like TRP and FTS, along with a small position in the U.S small-mid cap index. I’m looking into more ways to diversify the portfolio, and still meet the CRA tax rules for a leveraged investment loan. One goal of the portfolio is to have a larger growth portion. Any ideas?
Stay tuned, the June net worth update will be posted later today.