Wednesday, June 27, 2012

The shine is off the WisdonTree DRW ETF


I dumped all of my DRW and most of my wife's. I kept 100 shares. It was more of an oversight than a plan. Yesterday I learned that the WisdomTree Global ex-U.S. Real Estate Fund had declared a dividend of .30398  (US) to be paid at the end of the month.

DRW is $25.90 at the moment. It has only paid two dividends in the past 12 months for a total dividend yield of about 61.4-cents or a percentage yield of about 2.4. Last June, DRW paid something in the order of 98-cents. Now, that is more in line with why I originally bought DRW.

If DRW recovers a little more of it value, say climbs to $30, I will probably dump the last 100 shares. I need dividend money and DRW is not delivering. I can put this money to better use.

A quick look at my recent purchases:

Cathedral Energy Services Ltd. (CET) has lost almost 14 percent since I first became interested. Ouch. When it entered personal bear market territory, I bought another block. This second investment is now down about 3 percent. If it drops another full 10 percent, I'm buying more. I've kept, as they say, some powder dry. Oh well, as the cost of a share has declined the dividend has climbed. It is now in the six percent range. I can live with that.

Sun Life Financial Inc. (SLF) is up 3.57 percent since my purchase. Nice. Not great but still nice.

The Royal Bank of Canada (RY) added to my position a few months ago at about $45 is up more than 14 percent, plus it has paid one dividend. With all the unrest in Europe, RY may yet get tangled in the turmoil, and if it does my smile may get wiped from my face.

iShares Tr FTSE NAReit Mtg Plus Capped Index (REM) was a bold move when I made it after following REM literally for years. It just looked too good to pass up. It is now up 8.67 percent plus it has been paying a fantastic dividend --- 11.32 percent. This is an example of a risky buy, I would have bought more if I'd have had more confidence. Now, it has climbed to the point that I can handle a rather large pullback without losing any sleep.

My BMO Equal Weight Utilities Index ETF (ZUT) is up 5.8 percent plus it is yielding 5.35 percent .

I am disappointed by my WisdomTree Trust Australia Dividend Fund (AUSE). It has lost 7.15 percent of it value since its purchase. Another ouch! The yield of 5.13 percent today helps to sooth the pain (this was the yield the last time I checked --- this may change if the June dividend is not as expected.)

So, what am I watching today. First, I'm watching the price of oil drop. I've heard some analysts claim that if Europe goes into a financial meltdown, oil could hit $65 a barrel. If that happens, I'd look at Crescent Point (CPG) and PennWest (PWT) and Inter Pipeline (IPL.UN). I like both CPG and IPL.UN and can see as much as 2 percent of my portfolio in each of these investments.

With PWT it is a different story. I'm averaging down my share cost. I paid too much for this stock; I'd like out; I don't want to take a big loss. I'm averaging down and enjoying the yield. Even if the dividend gets cut, I'll survive nicely. I'm not too worried. I've got a few years before I simply must dump this investment.

One other company that I am watching closely is ARC Resources Ltd. (ARX) This one made the ScotiaBanks's Canadian Core Portfolio list. It it going for about $22 today and yielding about 5.4 percent.

With the price having been under attack for months, I might buy some iShares Inc MSCI Hong Kong Index Fund (EWH) if the price drops to $15.50 or lower. This one meets my need to diversify and my need for yield. Based on the present unit price, the yield is very good. (Do your own research on this and see what you think.) I'd also research the Asian economy in total and make my decision based on what I discovered.

It's funny. My Hong Kong ETF is down about ten percent while my Singapore one is up almost 21 percent and my China ETF is in the black but barely. Oh well, the world is still in balance. In fact, it is still weighted in my favour. I'm happy.

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