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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: My Question is on the Transalta preferred shares. I have the series C preferred shares that are paying me 6.8% and with reset this June expect the yield will be about 6.7%. I see that the company decided NOT to go ahead with the proposed exchange of the preferred shares last Friday. Is this a good or bad sign?

How risky do you view the Transalta preferred shares in terms of ability to pay dividends and viability long term of the company?

Please feel free to publish.

Tony
Read Answer Asked by Antoine on February 13, 2017
Q: I am looking for rate reset or floating rate individual preferred shares or ETF for US companies. Could you please provide me a list of ETFs listed in the US and Canada. Where can I find a list of preferred shares for US Companies?

Thanks
Read Answer Asked by Tabho on February 02, 2017
Q: I have 2 preferred share ETFs (CPD and HPR) that are both up about 6 percent over the last few months. I have noticed a slight outperformance with the actively managed ETF (6.01% vs. 5.59%). The fees are slightly higher with the actively managed ETF (0.64% vs 0.51%). Is it advisable to switch my holdings in CPD and put everything in the actively managed ETF? Is it worth it or is the outperformance a red herring because of the short time period?

Thank you,
Jason
Read Answer Asked by Jason on January 31, 2017
Q: I have a note from you wrt to CPD so am aware of its rate reset properties - which should be positive in the anticipated rising rate environment. However, I have not followed prefs before and wondered how they might perform should we get a significantly negative equity market, and - additionally - whether the managed version might do significantly better in those circumstances. Appreciate your opinion. Thanks.
Read Answer Asked by Mike on January 25, 2017
Q: I was looking to take a position in BB, but I noticed that they have a convertible debenture paying 3.5% and convertible until 2020 at a price of $ 10, I think that this might be a better way to play it, what do you think?.I notice that there is nothing on the ask side, why is that, is it that thinly traded.
Thanks
Read Answer Asked by auftar on January 16, 2017
Q: Income investments - preferred shares
On Jan 4, you posted an answer for an income investor, expressing approval of ZPR (BMO Laddered Preferred Share Index ETF). I am somewhat cynical about preferred shares, their being subject to the interest rate sensitivity of bonds, lacking the upside of common stock and generally lacking a fixed redemption date or any other assurance of capital preservation. I wonder whether, even on a reset date, they would necessarily trade at their face value. If I am right, I can't understand in what circumstances they would be suitable (without fixed redemption or as an interest-rate play with a high coupon). What am I missing?
Read Answer Asked by Carl on January 05, 2017
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