Title: Portfolio Manager, Scotia McLeod
In the business: 26 years: 18 institutional; 8 retail
Book size: $50 million and 35 households
What I own
For income, I own investment-grade, high-yield U.S. and Canadian corporate bonds and a mix of five-year-reset preferred shares, including Enbridge, Brookfield Office Properties, Sun Life, Fairfax Financial Holdings and Canadian banks.
Given low interest rates, I’m replacing bonds with five-year-reset preferred shares because their after-tax yields are much higher.
For growth, I own dividend-paying Canadian stocks with some cyclical exposure. Since our market is narrow, picking stocks can add value, but I use ETFs to access U.S. and international markets. The U.S. market is a significant percentage of my equities exposure due to reasonable valuations.
Within equities, I minimize risk by sticking with dividend-paying utilities like Enbridge and Inter Pipeline; companies with strong balance sheets and increasing dividends, such as Cineplex and CN Rail; plus bank stocks and insurance companies.
To further limit risk, no more than 5% of the whole portfolio is in any one stock. I also have a 3%-to-5% allocation to gold. Gold stocks have underperformed, so I’m adding a gold stock ETF.
I serve 35 families, and I’ll likely cap that at 60. Most my clients are in their mid-50s to early 70s, and have gained wealth through a business sale, inheritance or divorce settlement.
Big teams aren’t right for ultra-rich clients. If I gave an advisor millions, I would want to talk directly with the decision maker. So my team is just my assistant and me. I answer the phone and emails personally, and meet all clients, including in their homes. I bring in financial and estate planning experts only when I need them.
I’ve started offering seminars to women where I discuss issues such as the fact that women live longer, earn less than men and tend to be more risk-averse. I recently made two presentations at weekend spa getaways; they resulted in a client each. I have three seminars scheduled over the next couple of months.
Originally published in Advisor's Edge
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