Full Breakdown
Performance Review of Canadian ETFs and Stocks
8/30/2025, 11:58:13 AM
Overview of the Portfolio Performance
As of August 21, 2023, the reviewed portfolio, which includes a mix of exchange-traded funds (ETFs) and individual stocks, has shown positive performance across all securities. The total return since the portfolio's inception is 225.3%, translating to an average annual growth rate of 9.16%, surpassing the target growth expectations. Notably, the portfolio's structure provides significant downside protection through its holdings in the iShares 0-5 Years TIPS Bond Index ETF (XSTP-T) and CI High Interest Savings ETF (CSAV-T).
Key Holdings and Their Performance
The portfolio features several notable ETFs and stocks:
- iShares 0-5 Years TIPS Bond Index ETF (XSTP-T): This ETF, which invests in short-term U.S. Government inflation-protected notes, has seen a slight decline of $0.35 since February, with distributions totaling $0.845 per unit.
- CI High Interest Savings ETF (CSAV-T): Added in August 2023, this ETF is designed to maintain a stable price, currently down $0.01 since its review, with monthly distributions of $0.648 per unit.
- BMO S&P/TSX Banks Equal Weight Index ETF (ZEB-T): This ETF, which invests in the Big Six Canadian banks, has gained $6.04 per unit, with monthly distributions of $0.855.
- BMO Low Volatility Canadian Equity ETF (ZLB-T): This fund has increased by $6.61 since the last review, with total distributions of $0.56.
- Individual Stocks:
- Fortis Inc. (FTS-T): Gained $8.17, with dividends totaling $0.615 per share.
- Enbridge (ENB-T): Increased by $6.44, providing a quarterly dividend of $0.9425.
- Brookfield Corporation (BN-T): Up $2.68, with dividends of $0.252.
Investment Strategy and Adjustments
The portfolio manager has opted to reinvest retained earnings into additional units of the iShares Edge MSCI Minimum Volatility USA Index ETF (XMS-T) and BMO Low Volatility Canadian Equity ETF (ZLB-T), enhancing the portfolio's stability and growth potential. The cash balance has been moved to Tangerine Bank, which offers a promotional interest rate of 4.5% for new accounts.
Criticism & Opposition
Despite the positive performance, some analysts caution against the current valuations of bank stocks, which are nearing the upper limits of their historical ranges. Concerns have been raised about the sustainability of the recent rally in bank stocks, particularly given the potential for economic headwinds and regulatory challenges.
Official Statements & Responses
Graeme Hepworth, Chief Risk Officer at Royal Bank of Canada, expressed confidence in the quality and resilience of bank portfolios despite macroeconomic uncertainties. He noted, “We remain confident in the overall quality, the diversification and the resilience of our portfolios.”
What's Next
The portfolio will undergo another review in February 2024, with potential adjustments based on market conditions and performance metrics. The ongoing monitoring of economic indicators and stock performance will guide future investment decisions.
Verbatim Quotes
- “My investment approach starts with data,” — Stan Wong, Portfolio Manager, Scotia Wealth Management
- “Despite persistent uncertainty in the macroeconomic and policy environment, we remain confident in the overall quality, the diversification and the resilience of our portfolios,” — Graeme Hepworth, Chief Risk Officer, Royal Bank of Canada
- “It’s disciplined, data-driven and adaptable,” — Stan Wong, Portfolio Manager, Scotia Wealth Management
- “The biggest gains were posted by Fortis, Enbridge, and the BMO Low Volatility Canadian Equity ETF.” — Portfolio Review Summary
This comprehensive review highlights the portfolio's strong performance and strategic adjustments while acknowledging the potential risks associated with current market conditions.
