The last time the Bank of Canada lowered its target interest rate was in March, but interest-sensitive stocks have been reacting as if they had never paused.<\/p>\n
Utilities, pipelines, banks, and telecoms have been edging higher all year. The result was a gain of 6.7 per cent for my Internet Wealth Builder RRSP Portfolio for the six months from Feb. 21 to Aug. 21.<\/p>\n
I know, no one is interested in RRSPs in August. But you should be. An RRSP is your personal pension plan, and it needs care and attention. That means reviewing it periodically to see if changes are needed. I revisit our model RRSP Portfolio twice annually.<\/p>\n
I launched this portfolio in February, 2012. It has two main objectives: to preserve capital and to earn a higher rate of return than is available from a GIC. The original value was $25,031.92.<\/p>\n
The portfolio contains a mix of ETFs and stocks, so readers who wish to replicate it must have a self-directed RRSP with a brokerage firm.<\/p>\n
These are the securities we currently hold, with comments on how they have performed since the last review in early September. Results are as of the afternoon of Aug. 21.<\/p>\n
iShares 0-5 Years TIPS Bond Index ETF (<\/b>XSTP-T<\/b><\/a>)<\/b>. This ETF invests in short-term U.S. Government inflation protected notes. They pay a low rate of return, but both the face value and the interest increase as inflation rises. This provides downside portfolio protection. The units are down $0.35 since the last review in February. We received distributions that totalled $0.845 per unit. Note that while distributions are monthly, they vary considerably in amount. <\/p>\n CI High Interest Savings ETF (<\/b>CSAV-T<\/b><\/a>)<\/b>. We added this high-interest ETF at the time of our review in August 2023. It was trading at $50 at that time, and it\u2019s designed not to vary too much from that level. This fund invests in high-interest deposit accounts at Canada\u2019s major banks. It earns a better rate of return than a retail customer can obtain because of its hefty purchasing power. The units are down $0.01 since the last review, and we received monthly distributions totalling $0.648 a unit. Note that as interest rates fall, the payout will decline.<\/p>\n BMO S&P\/TSX Banks Equal Weight Index ETF (<\/b>ZEB-T<\/b><\/a>). <\/b>This ETF invests in shares of the Big Six Canadian banks. Banking stocks have done well in recent months, and this ETF has benefited, with a gain of $6.04 a unit. Monthly distributions totalled $0.855. <\/p>\n iShares Edge MSCI Minimum Volatility USA Index ETF (CAD-Hedged) (<\/b>XMS-T<\/b><\/a>)<\/b>. XMS invests in low-beta US stocks. Low beta means they are less sensitive to broad market movements and, in theory, less risky. The fund posted a small gain of four cents in the latest period. Quarterly distributions totalled $0.208 a unit.<\/p>\n BMO Low Volatility Canadian Equity ETF (<\/b>ZLB-T<\/b><\/a>)<\/b>. This ETF invests in a portfolio of large-cap Canadian stocks that have a low beta history. It\u2019s up $6.61 since the last review. We received two quarterly distributions for a total of $0.56.<\/p>\n BMO Low Volatility International Equity Hedged to Canadian Dollar ETF (<\/b>ZLD-T<\/b><\/a>)<\/b>. This ETF focuses on international stocks and is hedged to Canadian dollars, so the currency risk is removed. It gained $1.20 in the latest period. Distributions totalled $0.34 a unit.<\/p>\n Brookfield Corporation (<\/b>BN-T<\/b><\/a>)<\/b>. Brookfield operates in a range of business areas, including real estate, asset management, renewable resources, infrastructure, and insurance. The stock continues to edge higher and is up $2.68 since the last review. We received two quarterly dividends for a total of $0.252. <\/p>\n Enbridge (<\/b>ENB-T<\/b><\/a>)<\/b>. Enbridge offers an attractive yield (currently 5.7 per cent) and modest capital gains potential. The stock is up $6.44 since the last review, and the quarterly dividend is $0.9425.<\/p>\n Fortis Inc. (<\/b>FTS-T<\/b><\/a>)<\/b>. Interest-sensitive stocks did very well in the latest period, with Fortis gaining $8.17. We received two dividends of $0.615 a share. <\/p>\n