Friday, 7 August 2015

Recent Sell! August 2015

    I do not sell very often, as I plan on buying and holding, pretty much indefinitely the stocks that I do purchase. However I have been putting quite a bit of thought into this one and decided to sell off my entire position in ZDV, the exchange traded fund offered by BMO.

    I sold all 45 shares for $16.05, which is unfortunately well below the $18.14 cost average that I have bought them for, a capital loss of $94.05. Slightly off setting that loss is the $28.04 in distributions that I have received from it so far, as well as the last distribution I will get from it this month of $2.7. Selling this position decreases my monthly income by $2.7 and annual dividend income by an estimated $32.4. However it frees up additional cash to be redeployed elsewhere.

    I decided to sell the position based on two main points:

1) Overall under-performance when compared to the market, ZDV is -8.78% this year compared to the S&P.TSX composite index's -2.13%.

2) Part of the reason ZDV has been under-performing the market is that it consists heavily of energy, financial which have not being doing so well. Many of its larger holdings are holdings that I already have, and so are creating overlap. The total number of positions held are also fairly thin at 53, and no longer represent what I would want the ETF to do for me regarding diversification.

    Going forward I will be taking a look at ETFs to see whether or not I will replace ZDVs ETF spot with an all-market product, or perhaps just stick with having pure stocks. One of the general purposes of having an ETF in my account was to soak up left over cash and dividends when I did not have enough cash to make a new purchase worth while due to commission fees. Since Questrade offers free ETF buys, they are a good place to put to work small amounts of capital.


  1. As you stated, you don't really read about 'sells' among the dividend blog community which just goes to show when a sell does occur it must be for a real good reason. I know many like to mix ETF's or mutual funds among their stock picks but I never saw the appeal. I'd rather create my own 'fund of stocks' by buying a well diversified portfolio of individual names. Thanks for sharing.

  2. I agree with DivHut. I like the concept of "funds" but my picks tend to outperform them all so I don't see the advantage. Looks like a good decision to me.