Increased Dividends by $2700!

If you’ve been following my monthly updates, you will remember that I was in the process of transferring over a work RRSP into my direct investing RRSP account.  A portion of the funds finally made it over, and I wasted no time and put the money to work. The funds were previously invested in a mutual fund with a 2.2% MER, that was performing slightly below it’s benchmark.  So what did I buy?

Ishares All Country EX Canada:XAW

The first thing I purchased was 1100 shares of XAW.  This fund is not new to me, I already owned about 2600 shares.  I use this fund for US & global diversification.  It was an extremely low MER (0.22%) and is extremely diverse (over 8000 stocks across the world).  The fund covers everything except Canada, which is perfect for me, because I use my TFSA for individual Canadian stocks AND I own one other fund that is purely Canadian equity (more on that later).  XAW is a fairly new ETF, it was started in 2015 so there isn’t too much long term data on the performance.  That said since the fund’s inception it has returned 8.31%.  The fund also pays a distribution twice per year (June & December) and based on the last 2 payments this purchase should add $624.40 to my annual dividend income.

RBC Canadian Equity Income Fund Series D

Mutual Fund Performance

The next thing I did was add to my position in the RBC Canadian Equity Income fund.  I purchased 1000 additional shares, bringing my total share count to 3294.  Typically I am not a fan of mutual funds as they carry a higher MER, however this fund has performed exceptionally well for me, it is diversified, and pays a monthly distribution.  The fund holds 86 Canadian companies (mostly blue chip dividend payers) and RBC allows the fund to DRIP shares each month.  The fact that this is a “series D” fund*, means the MER is lower than the normal series A fund.  It is still higher than most ETF’s, but it’s much more reasonable (at 1.04%).  Over the last 10 years this fund has beat the benchmark and returned over 11% annually!  This purchase will add $1218.00 to my annual income, thus allowing me to drip an additional 3-4 shares each month.

*Series D funds are available to direct investors.  They offer all the same holdings as the series A fund, however you must purchase them yourself.

NFI Group – New Position!

NFI

Lastly I initiated a position in NFI Group by purchasing 500 shares.  The timing may have been a bit of a gamble, as they are expected to announce earnings today.  Last month the management team had come out and said they expect to miss on earnings.  The stock plummeted and I am hoping the downside is already priced in.  I still think long term this will be a great hold.  I wrote a bit more about NFI Group HERE.  I also kept some cash leftover in case the price comes down further after the earnings are released. The purchase of 500 shares will add $850 to my annual dividend income.

So although these purchases weren’t from any new capital being injected into my portfolio, I believe they will perform better than the fund they were previously invested in, the fees will be lower, and they will add an extra $2672 to my passive income!