With the end of the calendar year coming up it is time to review our model portfolio to see how it has performed against the index.
Our model portfolio is based on value investing; as such we look to buy undervalued companies, which meet a number of criteria:
1. Dividends paid from free cash flow
2. Low level of debt after adjustment for goodwill.
3. High dividend yields.
4. Trading below fair value.
This portfolio allows us to achieve solid long-term growth with high dividend yields.
The aim is to ensure that the income produced by the portfolio is sufficient to meet everyday needs. Therefore allowing us to ride out fluctuations in the capital value of the portfolio.
The portfolio was started on the 01/01/2012 with a balance of $1 million.
The current worth of the portfolio is $1,357,772, which is total gain of $357,772 over the past 3 years or a return of 12.7% per annum.
Overall the performance over the past 3 years is as follows:
1. Gross income of $239,700 or $80,000pa. Compared to the ASX 300 AI of $205,000 or $68,000 pa.
2. Total portfolio return 12.7% pa against the ASX 300 AI, which returned 13.48%.
The key is the income of the portfolio.
If the income matches your needs you do not have to sell assets to fund your living requirements.
This helps protect the long-term capital.
For more information about our Model Portfolio please contact us on 07 4771 4577.