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Mutual Fund News


Special to The Globe and Mail



Public relations officer

The portfolio

Includes shares in Canadian National Railway Co., Royal Bank of Canada, Keyera Corp., BCE Inc., and Emera Inc.

The investor

Jennifer Sydenham has spent most of her career in the banking industry, analyzing companies applying for loans. Currently, she works in public relations outside of the banking sector.

How she invests

Ms. Sydenham follows a modified version of Globe and Mail columnist Rob Carrick's Two-Minute Portfolio, which invests equal amounts at the beginning of the year in the two largest dividendpaying companies within each of the 10 sectors of the S&P/TSX composite index.

Ms. Sydenham's approach replaces the two largest dividendpaying companies in each industry with two or three "well-established," dividend-growing companies. The companies must also provide essential services to consumers and be able to defend their market share from competitors.

Her industries (and portfolio allocations) are different too, consisting of: financials (25 per cent), pipelines (25 per cent), industrials (20 per cent), utilities (15 per cent) and telecom (15 per cent). To further control for risk, no more than 10 per cent of capital is put into any one stock.

Like the Two-Minute Portfolio, an annual rebalancing shifts money from industries and stocks that have risen above their prescribed weights to those that have fallen below. Dividends are reinvested in what's below-weight. The result, once set up, is a diversified portfolio that seeks to deliver market (or better) returns with less volatility, while not requiring a great deal of time to manage.

Best move

"Borrowing money to buy bank stocks when the financial crisis was at its height ... the dividends were higher than the interest payments and I was comfortable that the banks wouldn't cut their dividends."

Worst move

"I inherited some shares in Barclays [PLC] precrisis. They fell off the cliff and never recovered to their former high. It was a classic case of using the purchase price as the benchmark ...."


"Warren Buffett says: 'Lethargy bordering on sloth remains the cornerstone of our investment style.' The same goes for me."

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