PORTFOLIOMANAGER

Amove to Ontario from Alaska with an accompanying reduction in after-tax income makes it necessary to raise investment income and to make it more secure.

Nigel Roberts, a chartered financial analyst and portfolio manager who heads Bluenose Investment Management Inc. in Lake Country, suggests Marc and Isabel Wild rebuild their portfolio to 65% equity and 35% fixed income from its present level of almost equity. That would work out to about

equity and fixed income, with the expectation that the entire portfolio should provide a 7.5% nominal return made up of dividends and appreciating share prices before inflation adjustments. Should they choose to use professional management, fees of 1% to 1.5% could cut the pre-inflation return to 6%. Allowing for 3% inflation, the net return would be a conservative 3% a year.

Their domiciled accounts can be left in place, held in low-cost equity mutual funds or exchange-traded funds. About 60% of the money can be in large-cap stocks in the

or an index and 40% can be in mid-caps, Roberts recommends. In the near term, say within a year or two of settling in Canada, the couple’s investment move will be to put Canadian money — less any used to eliminate the Canadian mortgage — into a roster of large-cap stocks that have growth and dividends in the range of about 3% to 6%. On Roberts’ list of equities: Bank of Nova Scotia, Toronto-Dominion Bank, Telus Corp., Inc., Enbridge Inc., Inter Pipeline Ltd., Cenovus Energy Inc., Suncor Energy Inc.,

Real Estate Investment Trust, Unilever Johnson & Johnson, The Coca-Cola Co. and McDonalds Corp.

The fixed-income portfolio should hold 90% actual five-year provincial bonds. Provincials have yield spreads that are an average of 20 to 45 basis points higher than federal bonds, are readily traded and have precisely known yields to maturity. The last 10% of the fixed-income portfolio should be investment-grade corporate bonds due in five years or less to minimize both credit risk and the price erosion that will be caused by interest rates, which, one day, will substantially rise. The bond portfolio would generate perhaps

a year. That’s not much for but the bonds are insurance more than a money spinner. They will tend to rise in value when stocks fall.

These assets can be parked in a variety of accounts. Neither partner will be working and will not generate space. As Canadian tax filers, they will be able to build accounts, though the income from the accounts will not have exempt status in the Thus, whether to do this or not will require a review by an accountant with cross-border expertise.