[Lost in Space 2]

Got family visiting and they were complaining about how their investments have gone sideways for the past 2 years.

This is something I noticed as well, I sold a long term bond and put it into a balance portfolio (40 safe stuff 60 growth stuff) that your only growth is capital gains and with the markets going sideways at the moment it means the return such a portfolio is zero to negative.

So how have your ETF done in the past 2 years?

 

[Lost in Space 2]

To answer my own question, I sold a bond last year from my wife's LIRA and all the etfs have done nothing

VEF US market = down 10% or so
VUN world market = down 20%
XIE = down 15% = high dividend ETF
ZAG = break even = bond


I moved VEF and VUN (at a loss) into XEI so I could collect the dividends and ZAG I sold to buy BNS

Buying a bond fund saved me the carnage of the TSX bear market earlier this year and VEF and VEN was basicly a sideways move as XIE was way down too.

Question is with everything down so much how long will it take to break even much less make the vaunted 6% a year a balance portfolio is supposed to return?

 

[james4beach]

Here are the figures from the largest ETF portfolio that I've put together (for my parents), including BRK.B because it's such a large holding company that it's almost a fund too. I'm using stockcharts.com to get the 2 year performance back to June 27 and showing total return

BRK.B (Berkshire in USD) 8.97%
XIC (TSX Composite in CAD) -2.83%
CEF.A (Central Fund of Canada) 17.24%
XSP (S&P 500 hedge in CAD) 5.41%
XSB (short-term bonds) 4.32%

Not bad overall. In hindsight, I might change XSB --> XSH (more corp exposure and higher yield) ; and change XSP --> ZSP for non hedged exposure.

 

[james4beach]

VEF US market = down 10% or so
VUN world market = down 20%
XIE = down 15% = high dividend ETF
ZAG = break even = bond

You said two years, and I don't think your numbers are right. Take a look at stockcharts for that time range and plug in the symbols.

In the last 2 years,
VEF.TO -5.69% ... not as bad as you said
VUN.TO +26.72% ... way higher than you said
XEI.TO -6.48% (this is with dividends included; you must look at total return)
ZAG.TO +10.99% ... hardly break-even!

I think your figures have neglected to include dividends, but you can see that with them included the results are much better. The average of the above is +6.39% which is not bad.

 

[GizelleGizelle]

Can somebody break it down for me about hidden ETF fees? do they really snatch that much money from my investment returns?

 

[mordko]

There isn't much hidden with ETFs. There is the well publicized MER. There is the spread when you are buying and selling - depends on how popular the product is. There is your broker's commission.

Finally there is TER. This one, rather helpfully, means different things in different countries. Essentially, if you buy plain vanilla, index-type ETF then you don't need to bother about TERs - MER tells you all you need to know. If you buy something fancy that does a lot of trades and options then you may need to add trading costs to your product's MER.

 

[Spudd]

You said two years, and I don't think your numbers are right. Take a look at stockcharts for that time range and plug in the symbols.

In the last 2 years,
VEF.TO -5.69% ... not as bad as you said
VUN.TO +26.72% ... way higher than you said
XEI.TO -6.48% (this is with dividends included; you must look at total return)
ZAG.TO +10.99% ... hardly break-even!

I think your figures have neglected to include dividends, but you can see that with them included the results are much better. The average of the above is +6.39% which is not bad.

Also, VUN is not world market, it is US.

 

[BoringInvestor]

For the past 2 years: July 2014 to June 2016: 9.24%.
If we're looking at just the past year it has been pretty flat: July 2015 to June 2016: 0.69%

 

[dubmac]

FYI

 

[DollaWine]

Preeeeetty bad

 

[james4beach]

And suddenly we all remember why some fixed income allocation is good. Even short term bonds have outperformed the TSX in the last 2 years.