The end of the quarter has just passed. That means its time for a quarterly update to the One-Minute Portfolio. Readers may recall it is a member of the lazy-investing school, consisting of just two exchange traded funds: the iShares S&P/TSX 60 Index ETF (XIU) and the iShares Canadian Bond Index ETF (XBB).
The main feature is an annual rebalancing, usually at the end of the year. The rebalancing takes into account whether the stock market is under or above its long-term historical average annual return. For more details, see the December 31, 2009 Canadian Business articleon the last rebalancing exercise.
The last update was in early July, when the One-Minute Portfolio was down -1% over the first 6 months of 2010. This quarter, the market surge in September turned things around nicely: the year-to-date gain is now close to 7%. Since inception, in early 2003, the portfolio has recorded an average annual gain of 8%.
The rebalancing rule outlined in the Dec. 31, 2009 article is working well, so far. It guided the equity allocation (i.e. XIU) up from 40% to 60% in late 2008, and then to 70% in late 2009.