Couch Potato portfolio returns for 2013
Last year was one of stark contrasts: huge returns in stocks combined with dismal bond performance but overall balanced index investors saw double-digit returns.
- The long-predicted rise in interest rates finally came in the spring, leading to the first negative year for the DEX Universe Bond Index since 1999. It’s easy to say this wasn’t a surprise, but let’s remember commentators have been forecasting rising rates since early 2010 and were wrong for three-and-a-half years.
- Real-return bonds had their second-worst year since they were created by the Government of Canada 22 years ago. Only 1994 (–13.7%) was worse, and not by much. Rising rates on long-term bonds and lower-than-expected inflation was a double whammy that dragged their prices down.
- The extraordinary returns in US stocks (over 33%) coincided with a strengthening US dollar, which gained almost 7% against the loonie. The result was a once-in-a-generation return of almost 43% in the broad US market for Canadians. I have data for the Wilshire 5000 Index going back to 1975, and there has never been a year with higher returns when measured in Canadian dollars.
| Global Couch Potato (ETF Option) | ||
| BMO S&P/TSX Capped Composite (ZCN) | 12.8% | |
| iShares MSCI World (XWD) | 33.9% | |
| iShares DEX Universe Bond (XBB) | -1.5% | |
| 15.5% | ||
| Global Couch Potato (TD e-Series) | ||
| TD Canadian Index – e (TDB900) | 12.5% | |
| TD US Index – e (TDB902) | 38.6% | |
| TD International Index – e (TDB911) | 29.6% | |
| TD Canadian Bond Index – e (TDB909) | -1.6% | |
| 15.5% | ||
| Global Couch Potato (Mutual Funds) | ||
| RBC Canadian Index (RBF556) | 12.2% | |
| TD US Index – I (TDB661) | 38.4% | |
| Altamira International Index (NBC839) | 28.1% | |
| TD Canadian Bond Index – I (TDB966) | -2.0% | |
| 15.0% | ||
| Complete Couch Potato | ||
| BMO S&P/TSX Capped Composite (ZCN) | 12.8% | |
| Vanguard Total Stock Market (VTI) | 42.7% | |
| Vanguard Total International Stock (VXUS) | 23.1% | |
| BMO Equal Weight REITs (ZRE) | -4.6% | |
| iShares DEX Real Return Bond (XRB) | -13.4% | |
| iShares DEX Universe Bond (XBB) | -1.5% | |
| 10.2% | ||
| Uber-Tuber | ||
| iShares Canadian Fundamental (CRQ) | 15.6% | |
| iShares S&P/TSX SmallCap (XCS) | 7.2% | |
| Vanguard Total Stock Market (VTI) | 42.7% | |
| Vanguard Small Cap Value (VBR) | 46.0% | |
| iShares MSCI EAFE Value (EFV) | 31.1% | |
| iShares MSCI EAFE Small Cap (SCZ) | 38.1% | |
| Vanguard FTSE Emerging Markets (VWO) | 1.6% | |
| SPDR Dow Jones Global Real Estate (RWO) | 10.0% | |
| BMO Mid Federal Bond (ZFM) | -2.4% | |
| BMO Short Corporate Bond (ZCS) | 2.1% | |
| 15.0% | ||
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