Investment Q&A

Q: TRP.PR.J is being redeemed at the end of this month. I own share in this security. I would like to reinvest in another minimum rate reset preferred share. Can you provide some suggestions please?

Q: I noticed in yesterday’s questions this stock is being redeemed. I also own it but was unaware of the redemption. How do I find out other than after the fact. What preferred would you recommend as a replacement?

Thanks

Paul

Q: am a senior looking to invest for income with preservation of capital, do preferred EFT fill this requirement? already own CPD, looking at PGX for US exposure. what other names might fill this requirement

Q: TRP.PR.J is being redeemed at the end of this month. Are there any signs or warnings that a company may be redeeming their preferred shares? I would prefer not to invest in a particular preferred share if it is being redeemed in near future unless redemption is at a premium to current market value.

Q: Interesting to see one of the preferred shares ETF gaining 'interest' (pun intended) over the past year.
What is your outlook for preferred shares generally and would you step into this area?

Q: Peter,

TD just redeemed preferred TD.PF.G. What is your opinion of investing in preferreds with where we are in the interest rate game { ie I am assuming a slight slow gradual increase - TD must think the same thing }. I realize they are for income only and do you think rate resets are the way to go? . Please give me few recommendations.

Thank you

Paul

Q: What are your thoughts on DXP ETF or do you prefer another ETF. Preferred shares perform better in which environment.

Thanks for the great service.

Q: Hi Peter & 5i,
What do you think is the probability that Rogers forces Shaw to redeem these Preferred shares come June as per the purchase agreement?
I'm thinking it's almost 100%. If Rogers doesn't force the redemption then it would be an indication that Rogers is not sufficiently certain the deal will go through. And it's so early in the whole purchase process that the preferred share redemption almost has to happen?
Your thoughts please.

Q: I have paid very little attention to preferred shares until fairly recently. I understand that in the event of bankruptcy the owners of these shares place higher than common shares and that they have higher dividends. That's about it. What I don't understand is why BAM.A would be up 8.5% ytd but BAM.PF.X would be up over 30%. and BAM.PF.B would be up 23%. Is this sort of outperformance likely to continue?

Q: On a previous question, TD announced Friday that these preferred will be redeemed. Likely for any preferred with high Minimum reset, so do not count too much on them if rates stay low. No mention of a possible conversion.

Q: I currently hold TD Bank series 12 preferred shares (TD.PF.G) and they are coming up to a five year anniversary upon which they can be voluntarily converted to series 13 preferreds. The series 12 have an initial 5.5% payout and their first reset is another 5 years down the road at the 5 year Government of Canada rate + 4.66%. The series 13 preferreds have a floating quarterly rate of the 90 day T-Bill + 4.66%. With interest rates likely to rise would you recommend exercising the conversion privilege? Also, would you happen to know the trading symbol for the series 13 preferreds?

Q: Hi guys
I have a small portion (under 2%) of my portfolio in preferred shares (CPD and PPL.PR.M ). I bought these for a safe steady eady type of return but as you know investing in Preferred shares the last few years has felt like a roller coaster. For example PPL.PR.M is still $1 below where I bought it about 5 years ago, and has dropped to as low as $14. So I am wondering why not sell my preferred holdings and just buy more of a nice dividend stock like BCE where I am actually getting 6.2% yield - more than I am getting from my preferred? I know I am further down the chain if the company defaulted but I also get more upside. Your thoughts on selling my preferred holdings and buying some nice safe dividend stocks instead?

Thanks

Stuart

Q: This is a comment to your answer to Steven regarding the mentioned preferred share.
Present dividends is 6.75% minimum of 5.25%
The portfolio has a NAV of $ 19.98 which means that it can withstand about 50% drop of the portfolio before it affects the value of the preferred shares.
You have the option of redeeming your shares at $ 10 on December 2025. that compared to most regular preferred that the option is with the company not the holder.
It has performed much better than many perpetual preferred, that some of them lost half of their value even with interest rates going down.

Could you please explain how this is riskier than the perpetual preferred,

Thanks

Q: your opinion please and buy, sell or hold?

Q: Can you please explain why the issuance of convertible senior notes has resulted in such a large drop in share price. Thanks

Q: How do you like Preferred's these days? I've recently replaced some of my bond ETF's with ZPR. I understand they carry equity/credit risk but do you see pref's as offering better protection against rising rates? Thanks.

Q: There are many rate reset preferred shares with conversion privileges. I hold RCG.PR.B which just reset at a yield of 3.7% (on $25 face value), which is 2.89% plus the 5 year Canada government bond yield on March 1. This gives a quarterly dividend of $0.231313 per share. The rate will not reset again until March 1 2026. RCG.PR.C reset at 3.00% per annum or $0.186799 per share for the quarter, being equal to the sum of the three-month Government of Canada Treasury Bill yield determined as of March 1, plus 2.89%. The rate on the C shares will reset per the formula every quarter. The option window to convert from one version of the security to the other will close on March 16.

Given your outlook for interest rates over the next five years, which version of this security would you prefer to hold for the next five years?

Q: I am finally up on these and would like to know if they are a good hold for appreciation and yield? Thanks James

Q: Hello Team Portfolio question for conservative income investor. In a longer term horizon can an argument be made for increasing the proportion of rate reset preferreds while decreasing bond holdings by a similar amount. Like many investors I have previously been burned by preferreds so I confess I am a bit gun-shy and with bond funds I ilke the income (meager) but fear the long term capital loss in a future rising interest rate environment. This strategy seems to make some sense. Thank you for your opinion. gary

Q: Preferred shares fit into the income part of a portfolio and also can be a fixed income substitute if one can tolerate the extra volatility (especially now given bond yields and potential for rising interest rates). In the past 5i has suggested CPD over DIVS for etf exposure citing the fee differential. Two questions (1) what is your medium term outlook for Canadian preferred shares and (2) given complexity of different preferred share issues and an inefficient market, is there an advantage to the active approach? (Please explain why or why not - thanks).