Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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AltaRed
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Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by AltaRed »

It is inevitable we will have the annual 'how did you do in 2016' thread, so how about we put a bit more filler in that sandwich this year, and also talk about 5 and 10 year CAGR performance on an XIRR basis for the overall capital investment portfolio? After all, one year performance will be all over the map depending on asset allocation, sector mix and geographic distribution. Hopefully, this will generate some meaningful discussion.

I will post once when the December distributions are posted.

Added: I would suggest not bloating this thread with comments on the final phase of CRM2 Implelmentation. Let's post those observations here
Last edited by AltaRed on 31 Dec 2016 16:22, edited 2 times in total.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by ghariton »

My year end distributions are negligible, so I can start off the parade now.

CAGRs were

One year 7.7%

Two years 10,2%

Five years 10.8%

Nine years 7.8%

(I don't have reliable data before that, but the period does cover the bear market of 2008)

Fixed income was about 67% of the portfolio at the end of 2007, currently 36%. Basically, I left fixed income (RRBs) ride and reinvested into equities. As well, equities did better than fixed income. Hence the trend in asset allocation. This matches my changing risk profile. As I get older, and have to finance fewer years of retirement, the amount of fixed income assets I need is dropping.

I also eliminated all individual stocks by the end of 2009. except for some play money. Instead I migrated equities to broad-based ETFs, roughly in line with market capitalization of world equity markets. I simplified over time, to a mix of VTI, VEA and VWO (plus a few legacy ETFs like SPY and QQQ). Canadian equities are held to the degree VEA holds them, i.e. no home bias in equities.

No currency hedging. Over the years, this made very little difference to returns (essentially, saving the cost of the hedging). However, in my experience, it stabilized the portfolio, eliminating some of the wild swings that accompanied investing solely in Canadian dollars.

A word on play money. I set aside 5% to 10% to try out new ideas, catch falling knives make contrarian bets, and generally pick stocks and time the market. Every few years I have to replenish this play money because of the losses I suffer. The resulting drag brings down my total portfolio CAGR by 0.2% to 1% per year. My new year's resolution on financial matters is to no longer replenish the play money fund. When the present lot is gone, that will be that.

Over all, though, I am very pleased with performance. When I drew up my financial plan, back in 2004, I planned around a rate of return of inflation plus 4% (allowing margins for negative surprises). I have more than achieved that, with surprisingly little volatility.

George
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Spidey »

My returns (XIRR) were as follows:

1 year: 11.9%
3 years: 9.0%
5 years: 9.2%

I don't have very reliable data past that point. About half index funds and half stocks for equity portion. Currently sitting at 36% FI.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by ig17 »

Married couple, 49/49. Portfolio performance (XIRR) across 10+ family accounts, including cash HISAs:

1 year: 7.7%
3 years: 8.4%
5 years: 10.2%

10 year return is not available. I started using Quicken at the end of 2011; pre-Quicken records are incomplete.

Asset allocation at the end of 2016:

Cash: 17.9%
US stocks: 47.6%
Canadian stocks: 19.9%
International stocks: 14.6%
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by chufinora »

My returns (XIRR) were as follows:

1 year: 13.4%
3 years: 8.4%
5 years: 9.4%
10 years: 6.4%

Currently sitting at 34% FI + Cash, 66% equities. Into the 4th year of living off the portfolio in drawdown mode (With no pensions and pre CPP). Mostly dividend (growth) stocks 10% REIT allocation, equities are 75% CAD and 25% other (US or ADR's in $US)

Am quite happy in that I am beating my chosen benchmark (FPX Balanced) for all durations, and I came back from a poor 2015 (-0.4% and 5.1% worse than my benchmark). Overall key criteria is to maintain a longterm return >6% which I am doing... 'just' (Probably going to fall below that if the next big crash happens within next 2-3 years).
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by KFried »

ghariton wrote:My year end distributions are negligible, so I can start off the parade now.
Over all, though, I am very pleased with performance. When I drew up my financial plan, back in 2004, I planned around a rate of return of inflation plus 4% (allowing margins for negative surprises). I have more than achieved that, with surprisingly little volatility.
George
Google shows XIC with 90% CG from 2004 to date.

We will have amassed cca 1.2 mil investable in 4 yrs, when we plan to retire. At the moment we have 20% in stocks, 10% in HISA and the rest is cash-cash (not even MM). I think our plan is also inflation+4%, but we think the market is high and FI looks riskier than the norm. We estimate we'll get 1000 CPP + 1200 DB pension as a couple.

We're fine with a 3-4 ETFs portfolio and 50/50 FI/Eq ratio. Any suggestions for deployment timing/pitfalls ?

Thank you
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by big easy »

Approximate numbers holding 50-60% equities the rest in XSB and as interest rates fell over the past several years VSC/GIC ladder/2026 RRBs and some prefs.

1 yr 7.1%
3 yr 6.3%
5 yr 8.7%
10 yr 5.9%
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by ig17 »

KFried wrote:Any suggestions for deployment timing/pitfalls ?
I respectfully suggest that you start a new thread if you want to ask for advice. This thread is not the right place to do it. :D
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by KFried »

ghariton wrote:Over all, though, I am very pleased with performance. When I drew up my financial plan, back in 2004, I planned around a rate of return of inflation plus 4% (allowing margins for negative surprises). I have more than achieved that, with surprisingly little volatility.
George
ok, I'll rephrase:
Google shows XIC with a 90% CG 2004-2016. Any reflections on the fact ?
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by KFried »

At the moment we have 20% in stocks, 10% in HISA and the rest is cash-cash (not even MM).

1yr performance - cca 20%
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by SQRT »

IRR results all portfolios combined
1 year. 26.7%
3 year. 13.1%
5 year 15.5%
10 year 10.2%
100% equity. Overweight banks. Much better than benchmark. This was my best year since 2009. Divs grew 6% in 2016 and I expect them to grow about 7.5% in 2017.
Last edited by SQRT on 01 Jan 2017 10:09, edited 3 times in total.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Jungle »

Wow Altared, you're asking for a lot of work here! After doing all these CAGRs, I think I need a CIGAR... :rofl:

(Actually wasn't that bad I had the data)

2016 11.82%

44% CAD
24% US
22% INT
8% BOND

3 year CAGR 10.06%
5 year CAGR 12.48%
10 year CAGR 6.54
16 year CAGR 6.60%

Benchmark couch potato (25% bonds), 16 year CAGR 5.35%

Thanks Trump for the rally, and God Bless America!
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Quebec »

How to calculate the CAGR when you have each yearly investment return in Excel: see this gummy tutorial and scroll down to the grey box containing =GEOMEAN(1+A1:A25)-1
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by ig17 »

Quebec wrote:How to calculate the CAGR when you have each yearly investment return in Excel: see this gummy tutorial and scroll down to the grey box containing =GEOMEAN(1+A1:A25)-1
Just a note for the "anal retentive" types: :D

GEOMEAN of several individual annual XIRRs is not the same as a straight multi-year XIRR.

For example, in my case:

5 year XIRR (2012-2016): 10.2%
GEOMEAN of 5 annual XIRRs: 10.4%
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by StuBee »

OK! My turn!

65% allocated to equity the remainder to fixed income.

1 year IRR: 10%
3 year IRR: 8%
5 year IRR: 9%
10 year IRR: 6%
20 year IRR: 7%

Individual years have varied from as low as -17% (2008) and as high as +20% (2009). Over my 21 years of records, I have only had 3 negative years (2001, 2002 and 2008)

Income from dividends increased by around 5% this year.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by IdOp »

For 2016, my overall portfolio IRR was about 11.0 % (without Dec 30 HISA/MMF distributions).

5-year IRR is 11.0 %

10-year IRR is 5.3 %

Since the last five years are better than the first five years, I'll attribute that to what I've learned from FWF. :thumbsup:

For context, the 2016 closing allocation was:

Code: Select all

  Cdn Cash  :    6.6 %
  US  Cash  :    5.4 %
  Cdn Bond  :    9.5 %
  Preferred :    2.8 %
  Cdn Eq Fnd:   15.3 %
  Cdn Stocks:   16.7 %
  US  Eq Fnd:   26.6 %
  Int Eq Fnd:   17.0 %

        Cash           :   12.0 %
        Fixed Income   :   12.3 %
        Canadian Equity:   32.1 %
        US Equity      :   26.6 %
        Intern'l Equity:   17.0 %
Canadian stocks had a good year up 21%, bonds and International stocks were almost flat, and US stocks were up about 9%, all in C$ terms and including distributions.

Overall a nice result I'm happy with, and would take again for next year.

ADDED:

The FPX benchmark returns for 2016 (according to my figgers):

Growth: 8.00 %

Balanced: 5.54 %

Income: 5.35 %
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by chufinora »

StuBee wrote:Income from dividends increased by around 5% this year.
That's a good one to track. Congrats 5% dividend growth (With a 10% return) is very good. I only got 2.5% dividend growth this year - in part because I sold some equity to rebalance back to 66% and I had two dividend cuts (Dream REIT D.UN and my dog stock European bank Banco Santander SAN that I really must sell - should have sold that at any time in past 3 years just waiting for it to break out :roll: ).
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by DenisD »

IdOp wrote:Since the last five years are better than the first five years, I'll attribute that to what I've learned from FWF. :thumbsup:
Plus the first five years includes 2008. :wink:
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by nile »

XIRR. 1 yr 2016. Up 25.8%
No other data for longer as Microsoft money doesn't seem all that accurate
120% all Canadian equity. No cash or FI.
50 yrs old Married 3 kids
Hope to retire when I'm finished paying for my youngest first degree.
Should be in 7 yrs.
then live off dividends with an annual dividend increase of 5%
Most decisions made from info from this site and the Connelly report
Hope the next 7 years are kind

Happy new year.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Flaccidsteele »

Unfortunately I do not calculate these metrics (ie. 5/10 CAGR XIRR). This is not to say that they don't have any value. Only that I don't see any value in them. In another thread, I mentioned that I only look at net worth and income so I'll stick with that.

Net worth rose above $4m CAD due to the spike in USDCAD at the end of 2015/beginning 2016, and promptly collapsed below $4m CAD as the USDCAD fell. Portfolio is very US dependent and carries currency risk. Also real estate dependent and carries real estate risk. Net worth was impacted by rising US real estate values, offset by the falling USD. No mortgages, no debt.

Passive income just shy of $200k/yr. Biggest contributors were increasing rental income and acquisition of additional US property.

Hopes and dreams for 2017: US rents go higher. FED hikes regularly, BoC cuts, Canadian economy deteriorates, and USDCAD increases. If USDCAD hits 1.45+ thinking to refi properties @50% LTV and convert USD proceeds to CAD.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Jungle »

StuBee wrote:OK! My turn!

65% allocated to equity the remainder to fixed income.

1 year IRR: 10%
3 year IRR: 8%
5 year IRR: 9%
10 year IRR: 6%
20 year IRR: 7%

Individual years have varied from as low as -17% (2008) and as high as +20% (2009). Over my 21 years of records, I have only had 3 negative years (2001, 2002 and 2008)

Income from dividends increased by around 5% this year.
What kind of portfolio did you have? Looks a lot like couch potato 20 year return, seems very balanced approach.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by StuBee »

Jungle wrote:What kind of portfolio did you have? Looks a lot like couch potato 20 year return, seems very balanced approach.
I have been investing since about 1993. I started keeping better track of my investments around 1996. Initially (and for about 15 years) I opted for a 75:25 Eq:FI allocation. More specifically a 50:25:15:10 ratio of Can eq:FI:Foreign eq:Us eq.

In the last 10 years, as I anticipated financial independence, I progressively migrated towards a 65:35 allocation or 45:35:7.5:12.5 Can eq:FI:US eq:For eq. I stopped investing new money around 8 years ago. I have been financially independent for about 2 years now.

Between 2006 and 2009, I cleaned up my Canadian equity by removing all non dividend payers and moving the overall yield of this part of my portfolio to around 120% of the TSX yield. This is entirely composed of about 15 individual stocks.

The remainder of the equity (the other than Canada portion) is mostly ETF's though most of the US allocation is divided between General Dynamics. GE, PG, and JNJ.

FI for most of my investing career has been 100% Quebec strips and GIC ladders. In the last decade I have diversified to include a 20% allocation to XCB, Pimco and Altamira High yield bond.

I consider my investing to be no better than average. I attribute most of my success to a more than 20 year investment in ENB, RY and BCE and the Quebec strips. More recently, my US allocation accompanied by a falling CAN$ has contributed handsomely.

My very long term rolling IRR's have been hovering around 6 to 7 % for close to a decade. I mean that my 15 year IRR of 2008 and of 2016 (and in between) are quite similar.

Upon review of this thread, I note that so far 7 posters have posted a 10 year (or more) IRR. These yields have varied between 6% and 10.2%. If I take the liberty of removing SQRT's 10.2% 10 year IRR*, the six remaining posters have 10 year yields varying between 6% and 9.2%. ISTM that they are in the "same ballpark". Perhaps this is to be expected...

StuBee

* I took this liberty since SQRT has admitted that his portfolio (much against his will :lol: ) is highly concentrated in the financial sector. More specifically: Banks (or maybe even Bank :lol: ). Happy new year SQRT.
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by SQRT »

StuBee wrote:I attribute most of my success to a more than 20 year investment in ENB, RY and BCE

Upon review of this thread, I note that so far 7 posters have posted a 10 year (or more) IRR. These yields have varied between 6% and 10.2%. If I take the liberty of removing SQRT's 10.2% 10 year IRR*, the six remaining posters have 10 year yields varying between 6% and 9.2%. ISTM that they are in the "same ballpark". Perhaps this is to be expected...

StuBee

* I took this liberty since SQRT has admitted that his portfolio (much against his will :lol: ) is highly concentrated in the financial sector. More specifically: Banks (or maybe even Bank :lol: ). Happy new year SQRT.
And a Happy New Year to you as well. ENB,RY,BCE are my number 3/2/4 biggest positions. You should exclude me. I'm just lucky I ended up at a big bank rather than say Nortel. Better to be lucky than smart any day. I've pretty well gotten to the point where I don't mind the concentration too much. I'm so far ahead of any reasonable benchmark that I could lose half of it and still be fine. Certainly wouldn't recommend this though.

For those who have posted the returns relating to their TFSA, any reason you haven't posted the total returns here?
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by cannew »

Maybe I'm lazy, but I've stopped looking at performance against various benchmarks or index's. I don't consider myself a successful investor, just one who's found a way to generate sufficient income from our investments to exceed our expenses. We've achieved it by limiting our stock selections to large, stable companies which .... as I've mentioned may times before. No secret which ones they are as there are only about two dozen Cdn stocks which are available, and we only own 18 in total (no etf's, bonds, preferreds or gic's). I get increased income each year and probably average capital growth, certainly not the best returns. That's evident by the "TFSA Returns To Date" post, where we got good returns while some others got great returns.

Hope everyone has a great 2017 and you achieve your own investment goals!!
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Re: Portfolio Returns 2016, along with 5, 10 year CAGR Performance

Post by Thegipper »

My stock holdings represent about 40% of my investments. The balance is in laddered corporate bonds and GICs. My stock returns averaged 15% .. My USA stocks didn't have a banner year. Health and tech stocks were holding me back. My Canadian stocks were very good. Overall including dividends and interest payments my total return was close to 8.5%. This is is a bit below my 10 year average which is right around 9%.
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