Going Through My Holdings One By One, Part 2
It looks like stocks are dropping rapidly. Now might not be a good time to sell. I should have done this a week or two ago. But let’s review what I own in my second stock trading account to see if it still makes sense.
PDI – PIMCO Dynamic Income Fund ETF (1.8% of Portfolio Value)
This is a closed-end fund run by the large investment firm PIMCO.
This fund currently has a 10.47% yield, paid monthly. The fund holds mortgages/bonds that pay an average of 5.5% and uses 45% leverage to increase that to 10.5%.
The total return of this fund is OK historically, considering bonds have been out of favor for a long time, around 5%. But I feel confident they’ll be able to maintain the distribution in the coming years. And when bonds become popular again, this fund will. It’s trading at a 10% premium to NAV.
I’ll hold this because I believe in the fund manager. Indeed, rising interest rates are not great for bonds, but I think the market has priced in most of the future increases.
- Status: MEDIUM RISK
PHK – PIMCO High Income ETF (2.7% of Portfolio Value)
Another bond fund that PIMCO runs.
This fund pays 10.9% annual distribution, paid monthly. The 5-year total return has been about breakeven. Again, bonds have been out of favor and I’m betting that they are coming back into favor with rising interest rates.
- Status: MEDIUM RISK
EIT – Canoe EIT Income Fund (2.7% of Portfolio Value)
This income-focused ETF pays 9.25%. Very reliable fund over five years, with the stock price not changing that much.
- Status: LONG-TERM HOLD
ZLB, ZLU – BMO Low Volatility ETFs (3.4% of Portfolio Value)
I bought these when I was looking for a place to park cash. Sometimes I sell it when I need funds to buy other things. These are both profitable, up 4% from where I bought them. So far, they do well as “low-vol” investments because they don’t go down as much on red days.
ZLB pays 2.55%, which is kinda low. The US fund ZLU pays even less – 1.84%. But safe place to park money.
- Status: SAFE
ZWB, ZWC, ZWU – BMO High Yield Covered Call ETFs (10.8% of Portfolio Value)
These are banks, utilities, and high dividend Canadian companies.
I like the BMO ETFs very much. They are solid, reliable, and have no risk of missing payments. These ETFs pay 5.5%-6.6%, which is not crazy high.
- Status: LONG-TERM HOLD
VTI – Vanguard Total Stock Index Fund ETF (3.6% of Portfolio Value)
This ETF holds every company listed on every US stock exchange, from large to small.
This should just be a long-term hold, for life even. It’s the total stock market. The US economy. In 10 years, it’ll be up. It doesn’t pay much of a dividend, but this is just capital in the US economy, which has outperformed every other large economy globally.
- Status: LONG-TERM HOLD
VVR – Invesco Senior Income Fund ETF
This is a closed-end fund run by Invesco, another big trustable investment name.
It pays an 8% annual return, paid monthly.
It’s a mixture of equity and fixed income. It uses around 31% of leverage to boost income. And trades at a decent 9% discount to the net asset value.
Since 8% is my target rate of return, I can see this being a long-term hold.
- Status: LONG-TERM HOLD
Summary
I don’t see anything in this portfolio that I need to change. I can see a lot of overlap with the other portfolio in that 25% of the holdings are identical in this portfolio as the other. So I need to keep an eye on that.
