Dirac Portfolio Review: 8 January 2025

Vigo, Spain

I have sadly neglected the Dirac Portfolio after taking money out of the account for other purposes with the intention of rebuilding once the money was returned to the account. My intention was to invest in beaten down Funds (based on Z-Score calculations) but this plan was somewhat thwarted by the stong bull market through 2024 that resulted in most Funds showing positive Z-Scores (i.e. “overbought” relative to their mean price.) However, with the recent decline I started to rebuild the portfolio by adding positions in FSCO, MPV and ARDC before realizing that this was a Canadian Tax-Free account (similar to a Roth IRA) but subject to 15% withholding taxes on US securities paying dividends – a kinda “tariff” on my investments 🙂 . Since then I have added a couple of Canadian Funds (that likely won’t be of interest to US residents/investors) and which make monitoring difficult due to exchange rate complications. I will probably end up separating US and Canadian investments in different portfolios when I decide which assets to hold in Tax-Free accounts and which are most suitable for taxable accounts. In the meantime I will just report occasionally on how these new “income” funds are behaving.

The following screenshot shows current holdings (with “values” converted to US Dollars even though holdings are in Canadian Dollars where applicable):

The portfolio is currently only ~30% invested in high yield Funds with the balance in BIL (T-Bills – also taxable to me).

In term of cash flow and timing, this is captured in the screenshot below that is used to calculate the Internal Rate of Return (IRR) on the investments. This is currently only at 1.62% due to the high percentage held in T-Bills and the poor performance of the ACRE Commercial Real Estate Fund over the past year.

Graphically, performance is low volatility and not too exciting:

As mentioned in earlier reviews, the “apparent” sharp drop at the beginning of the period is not “real” and represents the amount of dividends payed. From an initial portfolio with $100.000 invested, $5,247 has been paid in dividends (top screenshot) with current portfolio value at ~$102,000 (corresponding to the 1.62% annualized IRR).