One of the questions I get a lot is how does our rebalance process work in our North American Core equity portfolio. So I thought I would share a real world example of one that has been working out extremely well for us. Below you can see the trades we've made in Wheaton Precious Metals. We initiated our position back in January of 2022 as we had concerns around potential inflation and gold has historically been a great hedge on inflation. WPM is a global leader in the precious metals space and as such we believe was an is poised to take advantage of the historically high gold prices. Although the mandate is to rebalance on a quarterly basis, we do hold the right to make strategic decisions outside of those quarterly rebalances as we want to be able to make adjustments as necessary and not be constrained by a quarterly time frame. With that in mind as the war in Ukraine really took hold we decided to add to our WPM position at the end of Feb 2022. When completing our quarterly rebalance the first week of April  we took a small profit as the position was slightly trimmed down. As you can see below, by the time July rolled around the stock had fallen roughly $10 from our sell and we rebalanced again which bought back what we sold and more. In August because the share price had fallen even more dramatically we decided to once again increase the weighting in the portfolio to make it a larger position by adding another roughly 8% at $41. There was no rebalancing with the position during the October rebalancing. As we entered in January of this year our WPM position grew quite substantially so we wanted to start dialing down the position size, so not only did we do a rebalance on the 15th we also reduced our overall asset allocation as WPM was one of just three gold positions in the portfolio and we didn't want our gold exposure to get too large. At $56 we sold down roughly 25% of our position for significant gains. Three days later we did our quarterly rebalance which trimmed another small amount at $59.52. During the rebalancing in April we sold another tranche at $68 and then most recently in early July bought back what was wold in April at almost $10 cheaper per share or roughly 15% lower price.

As you can see from the above example, by having a disciplined rebalancing strategy and adding in some tactical decision making and overall portfolio construction decisions we have been able to maintain a core position in a company that we feel has solid long term potential while also adding extra alpha through our rebalancing process. In this particular example a standard buy and hold from our first purchase in January of 22 would have generated roughly a 10% cap gain on top of the dividends. By utilizing the rebalancing and tactical decisions we still have a roughly 10% unrealized capital and dividends on the position, but we have also realized a roughly 10% capital gain on the position as well. 

This is one reason why the NA Core portfolio outperformed it's benchmark 27.5% vs 26.5% in 2021 and -3.8% vs -9% in 2022. The last audited numbers we have for YTD are from March and we are slightly behind the market at 4.8% vs 6% however that is primarily due to the fact that this portfolio by virtue of being a dividend focused portfolio has essentially 0 exposure to the hot AI names driving the S&P 500 returns YTD. 

If you think you could benefit from a disciplined approach that is focused on achieving greater risk adjusted returns then we'd be happy to discuss our North American Core Equity portfolio with you.