Introducing the Sleepy Portfolio

I wrote about the target asset allocation for my portfolio, a little while ago. To recap, it looks like this:

Cash: 5%
Bonds: 20%
Equities:
Canada: 20%
US: 22.5%
EAFE: 22.5%
Emerging Markets: 5%
Real-Estate Income Trusts: 5%

Inspired by several “lazy” portfolios, I want to call mine the sleepy portfolio. You can also check out earlier posts about the original couch potato portfolio and the Canadian version. My main aim for this portfolio is to benchmark performance and compare it to my actual results. Over the next few days, I will post the actual mutual funds, bonds and ETFs that make up the portfolio.

I am making the following assumptions about the portfolio:

1. The portfolio currency is the Canadian dollar. All foreign-currency denominated assets will be converted to C$ at the prevailing exchange rate for performance tracking.
2. The initial investment will be $100,000, invested in different asset classes on Jan 3, 2005.
3. The investments will be in actual mutual funds, index funds, ETFs etc. When purchasing ETFs, a commission of $10 will be assumed for each buy and sell.
4. The portfolio is assumed to be in a tax-deferred, self-directed account.
5. All currency conversions (CAD converted to USD prior to purchasing USD ETFs, USD converted to CAD prior to purchasing CAD ETFs, USD dividends) will be assumed to cost 1.5 percent.

Annual Sleepy Portfolio report cards

:

Updates

:
The other posts in the series: Portfolio Building Blocks — cash, bonds, stocks and REITs and summary.

The blended cost of the Sleepy Portfolio is just 0.22%!

A note of caution: the Sleepy Portfolio has a large allocation to equities and is a benchmark for a young, aggressive investor. Older investors may want to boost the allocation to fixed income.

This nifty spreadsheet simplifies the rebalancing process.

The Sleepy Mini Portfolio is more suitable for investors just starting out and adding a bit to the portfolio every now and then.

In 2007, some of the components of the Sleepy Portfolio were changed. The portfolio was simplified by adding VTI, VEA and VWO and the bond component was split between XSB and XRB.

In 2013, some of the Canadian components of the Sleepy Portfolio started to change to take advantage of lower-cost offerings flooding the market. The first change was replacing the iShares S&P/TSX Capped Composite ETF (XRE) with Vanguard FTSE Canada Capped REIT ETF (VRE).