Portfolio One is our longest lived portfolio. It began in 2001 right after the 9/11/01 incident and thus has a duration of 11 years. Total investment by the beneficiary is $5500, investment by the trustee is $12,500 for a total investment of $18,000. The current value of the portfolio is $27,145, for an increase of $9,145 or 51% on invested cash. The annual return is approximately 6.6% when the timing of cash flows is taken into account. See the spreadsheet with full details on the right side of the site updated through November 2012 or go here.
Recently we did a couple of sells in the portfolio. Canon (CAJ), which had performed well for years, did a nose dive along with most of the Japanese market. Many of the Japanese electronics companies are falling on hard times, given that the value is moving to software and the Korean companies like Samsung seem to be dominating. While Canon still has a strong position in cameras and imaging, it was time to sell.
Exelon, the US utility that is one of the largest nuclear operators in the United States and has been well run in recent years, has also fallen on hard times. The switch to natural gas overall in the US has changed the economics of power for years to come and the nuclear and coal fleet is having difficulty competing. Their dividend is under pressure which is critical to the valuation of any utility stock. We reluctantly sold.
Looking over time, the current holdings are doing pretty well. There are 16 stocks in the portfolio, making it relatively diversified, and recent purchases have been in Canada, South Africa and Norway to provide some US dollar diversification. The stocks are mostly about $1500 each, with some under $1000 and a couple over $2000. This is likely about the total amount of stocks to have in the portfolio, so future purchases could be consolidation of existing purchases or tied with sales.
Dividends make up $2704 of the total return, and the portfolio is full of strong dividend paying stocks going forward. Expenses (fees) have dropped almost to nothing the last few years because we have been getting free buys and sells on the account and no annual fee has been levied. On the other hand, interest income has drifted down to pennies and is almost not worth recording anymore.