The Globe and Mail, Canada’s National business focused newspaper, wrapped up their strategy lab example portfolios on Saturday, after five years.

The portfolios were struck with $50,000 book value five years ago and nothing was added beyond interest, dividend and captial gains.  Each portfolio manger was bound to a specific style.

The Styles

Growth – focused on innovative and disruptive companies on the verge of rapid growth.

Value Investing – in this case the stock price is cheap relative to the companies net asset value, business prospects and overall market capet (it’s worth more than the market cap)

Dividend Investing – the focus is in income both the return at time of purchase as well as anticipated dividend growth.  Companies whose dividends roller coaster are to be avoided.

Index Investing – basically the holding of ETF’s or Mutual funds that mirror large indexs like the TSX 500.

And the Answer Is (drum roll please)

After five years the growth portfolio had a return of 407%, value was 95%, dividend was 75% with the index portfolio coming last at 48%.

For me though, more important than the style is the fact that all of the portfolio managers avoided market timing.  They made their initial selections and followed this with only minor buying and selling adjustments during the five years.

As well, the portfolios were also relatively contained at over holding of 10 to 15 stocks on average.

This combination of a focused number of well researched strong selections requiring little adjustment over the five years was probably as important a contributor to the success as the specific style.