Investment Q&A

Q: You continue to hold XHY and CPD in the income portfolio. My understanding when purchasing these was that they would perform well in a low interest rate environment. That has not been the case. I am about breakeven on them over the past 3 years with dividends included. What is the investment thesis for holding them now that interest rates are already so low. Is it time to move on?

Q: Wondering what the future holds in the way of capital appreciation for CPD? What will increase the value of CPD, like sentiment or change in economic cycle or something else?....Thanks....Tom

Q: Hi. Am I right to think that the option of switching to the floating rate series 45 is not a good deal since with the current pref there is the minimum yield and the possibility of a higher yield if rates rise in 5 years? Is it likely to be forced to convert to series 45 in your opinion? Thank you.

Q: Hi

These prefs are priced quite low- do you have any thoughts??


Thanks

Q: Hello, looking for emerging markets, ETFs you recommend ex China and ex India (as I already hold INDY and FXI). Also looking for non-Canadian REIT ETF recommendations (I hold XRE). Finally what are your thoughts on preferred share ETFs and which would you recommend (Canadian or not) outside of CPD.
Thanks!

Q: I am always looking for the contrarian angle
Preferred shares are being talked about.
Can I purchase an etf? Or do I need to purchase individual shares?
A couple choices would be appreciated.

Q: Hi To All at 5-i:
On Oct 30 CEC asked a question about the above. Would you be kind enough to explain his question, more specifically the figures. 0.9025( 6.95 ) Negative spread. please explain. I think he means 80% of 5 yr rate is equal to or less than 100% of what? at least
.29% ----? Then please explain the reset figures for the next 5 years. What is the rate today? I am thinking of adding some preferreds and am reviewing all questions carefully.
Thanks,
BEN.

Q: I asked about the pros and cons of this investment and it caused an error message.
I'm 68 and have little fixed income.
In an effort to be more clear this is a preferred and pays about 8%.
I'm adding a paragraph from a Baron's article hoping to clear up any confusion.

Newly issued preferred stock from Qurate Retail, the top home-shopping business controlled by media mogul John Malone, offers investors a lofty yield of more than 8%.

The preferred (ticker: QRTEP) has an 8% annual dividend and a maturity in 2031, and it finished Friday at $94.12, up $2.37. The preferred trades at a discount to its face value of $100. This results in a current yield of around 8.5% and a yield to maturity of about 8.75%.

Q: Hello 5i Team
BCE Series R preferred share (BCE.PR.R) resets December 01, 2020.
BCE has issued a notice on their website (https://www.bce.ca/investors/preferred-shares/2020-conversion-notice-series-r.pdf) which states the dividend will be published on November 13, 2020 and
“will be based on a fixed rate equal to the product of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on November 10, 2020 by two investment dealers appointed by BCE Inc., that would be carried by a non-callable Government of Canada bond with a 5-year maturity, multiplied by (b) the “Selected Percentage Rate”. The “Selected Percentage Rate” determined by BCE Inc. is 600%.”
I have reviewed the prospectus available on-line and cannot determine how the “Selected Percentage Rate” is determined.
1 – Can you provide any more information on how the “Selected Percentage Rate” is determined?
2 – The five year GOC bond rate is 0.40 % as of October 30. Therefore the new reset yield would be (600 % x 0.40 % = 2.400%), which would make the reset yield equal to (2.400 % x $25.00 / $11.71 = 5.124 %) as of October 31 closing price. Is this calculation correct?
Thanks

Q: If I purchase today @12.99 I would receive 0.9025(6.95%) what happens on recall 2022Sep01 Negative Spread (>=805of 5yr rate<=100%at least 0.29%)
Is reset ONLY 00.57%(0.0736) for next 5years Assuming in 2022 rate is same as today.
Thanks
Cec

Q: Hi Team,
Report Husky is selling to Cenovous, do you know what would happen to the Husky's Prefer Shares?
Thanks as always,
Tak

Q: I am currently looking at taking a position in a preferred issue. I have identified BPO.PR.C and TRP.PR.C. as two that might fit my portfolio. The concern i have with TRP.PR.C is that of it resetting on a floating rate basis viz a vis BPO.PR.C which would be less desirable. Both companies are creditworthy to varying depgrees, so it comes down to the reset standard and reset dates. Could you please provide your comments and feel free to add any other similar preferred issues.
Thanks, David

Q: Is this a buy and hold for
iincome and capital gain
for 5 plus years?
ralph

Q: Is this pref. still paying a dividend? If not, is it cum. and they have to pay in the future. Is it worth holding? ...Cec

Q: Could i please have your thoughts on Brookfield Office Properties preferred shares. Are these worth investing in, ( safety of dividend, creditworthiness), and, if so which series would you consider.

Thanks,

David

Q: Hello Team, once I noticed that GIC's had come down.. I decided to purchase some of the Preferred shares which have lost in value considerably ( 20-45%). BCE PR. R
RY PR H, ENB PR D, TD PR A
did I make a mistake? Do I hold on? what do you recommend? I'm 78 Years old and looking for some safety.
Thank you ! Heidi

Q: I will appreciate any comments you may have about the preferred shares of Partners Value Split Corporation. What are the splitshare preferred shares?
Thanks

Q: Morning Team,
I have 900 RYL Bank RY.PR.W (suggested by you on Sept 2017 Thanks) cashed out yesterday. Can you suggest a replacement Please ? Thanks as always,
Tak

Q: I am interested in buying this for an income holding but don't find any info on this particular issue.
Is it trading at a fair price here and what happens when interest goes below 1%?
Where can I find out when the rate is reset and at what rate.
Is there a recall date?
Thank you for your tremendous service.

Q: The company announced a debenture financing at 6.5% today to pay out a convertible debenture that only cost 5.5% and does not mature until Dec/21. The proposed debenture does not mature until Dec/20025. Is it fair to surmise that the company was prepared to pay a higher interest rate to get a longer maturity and to remove the possibility that the current debentures might be converted to shares because it believes the share price may in fact increase above the $8.35 conversion price?