Investment Q&A

Q: I own the 5.5% Aecon 31 Dec 18 convertible debentures. They are trading at about $109, and I bought them in Dec 2014 at about par. Should I take my profit now? If I wait until maturity, I will lose the current premium. I suppose they are trading at a premium because of the embedded warrant value.

Q: I am a senior who needs dividends. Currently preferred shares are 20% of my taxable account(10% overall). I hold PPL.PR.M and ALA.PR.I. Could you recommend 2-3 other minimum rate resets?
I held and sold my Concordia shares the day before you took them out of the growth portfolio. Your advice has been great and very consistent. I wish 5i was around 50 years ago.

Thanks, Jim

Q: Can the terms of the recently announced debenture be seen to suggest good things are in store for this company? The deal has a conversion option that is 30% - 40% higher than the current stock price. Given that this stock has shown very little growth over the past five years and you have suggested previously that you feel it is primarily an income stock it seems like a high bar to reach to convert. Since this is a bought deal, I would assume that this means the underwriters think this conversion price is quite attractive. Why would the conversion have been set at such a price? Does this strongly suggest something is in the works from a growth/acquisition point of view? And is the interest rate being paid expensive/cheap?

On a secondary note, is the debt from the previous takeover declining at a reasonable rate?

As always, appreciate your insight. I would also like to add that the changes you instituted several months ago are really working well. I am a long time subscriber and I keep learning more and more every day, so thanks.

Paul F.

Q: Are dividends from XPF eligible for the dividend tax credit? Thanks. Joe

Q: Hi Peter What is your thinking on the DH coverts as a long term hold in my RIF.
Kind Regards
Stan

Q: I find this site not too bad for preferred share info
www.prefinfo.com this may be of interest to people asking questions on preferreds

Q: Hi Peter and team,
If US and Canadian stock market goes down say ~10%, how it may impact preferred etf such as ZPR, CPD, PGX (US) or split preferred (e.g. FFN.PR.A)?
Thanks

Q: I found a PREFERRED SHARE listing put out by CIBC Wood Gundy that shows the yield, the price, the reset dates, and reset yields. I have found this very helpful but I don't believe it is a complete listing. I contacted BMO Investorline but their searches weren't helpful. Do you know a site where I can find this information. Thank you for your help.

Q: Good morning,
I own BCE preferred shares BCI-INC-CUM RED 1ST PR-AA. The value has dropped in half since my purchase. I understand these can be redeemed in 2017 for $25.
If BCE decides not to redeem the shares and extends the security can they change(reduce!) the rate of return which is currently 3.5%?

Q: I currently hold BPY (up 50% over cost) and H&R in my portfolio 4% and 3% respectively.
I am considering swapping BPY for BEP for the additional income. Your thoughts?

I also plan to crystallize my capital losses and purchase the following ETFs:
Non registered:
ZPW – US Put Write
ZWE – Europe Covered Call hedged to CAD.
ZWH – US covered call
CPD – CAD preferred
XRE – Capped REIT

Registered (RRIF):
PGX:US – Preferred.

Each would constitute 2% - 3% of my portfolio. Diversification is my intention, but risk and surety of income is the primary consideration in all of the above noted.

Again, your thoughts.

Thank you for considering my questions

Gail

Q: I am looking for general advice on the fixed income side of a portfolio. Where should I go to find fixed income that has a decent return? Or should I not worry about that, and concentrate on dividends from stable companies.

I have about 10% cash, and 10% altogether in ZPR, CVD, CSU.DB (all three obviously not fixed income). BTW, retirement in ten years or so.

Q: Is ZPR primarily constructed of rate reset preferred shares and if yes would this ETF be a good investment right now for income and capital preservation?

Ken

Q: I am considering purchasing a preferred ETF. Perhaps, one of CPD, ZPR, PPS or HPR. I notice that HPR has the lowest yield and highest MER but over the past 5 years it has done appreciable better; i.e., lost quite a bit less, than the other three. Is this attributable to its 'active' management or is there something different about its diversity of preferred shares?

Q: HiPeter & CO.
I'm down 25% on this Fairfax Financial Holding Ltd.Cum PFD Series C Pref rate 4.578%. Is there a chance that the share price will recover in the next year or two, or should I sell and move on.
Thanks Ken

Q: Thank you for providing a great service. Your recent comments on the Canadian Preferred Share Market and iShares CPD are greatly appreciated.
Please comment on
1) Please comment on iShares US Pfd Stock ETF (PFF) which trades in US$.
2) Is there any merit in holding a portion of a fixed income portfolio. PFF is about 5% of my total portfolio. Considering the recent upswing I have done well with PFF and have enjoyed the distributions within a registered RRSP. Should I consider holding it?

Thanks

Stephen

Q: I recently added CPD for fixed income, how do you think it will perform going forward given a Sept/Dec US rate increase? Thanks.

Q: Preferred shares and fixed income

Hi 5i team : I own only common stocks in my portfolio and since I am a mature person that is near retirement, I have the feeling that my exposure to common stocks is very high. So far, to mitigate my risk, I keep daily of the market changes, so I do not get caught in a drastic downturn.
To get more protection, I have thought in buying some preferred shares , but I know nothing about them to start a position.
Are the P.S. a good way to go ?, if so, what should I learn about them and how (references, books, etc), also what would be a reasonable percentage of my portfolio to have in P.S.?
thanks for your help
Alex

Q: Hallo I5, can you tell me why has AD been selling off, the Q report didn't look so bad, is this a good time to add to my 300 shares(cost $28.00). Also please tell me if the above preferreds BCE.pr.k and BPO.pr.r are god time/price to buy and how would their price be effected if interest rates are increased.
many thanks, J.A.P, Burlington

Q: Greetings Peter and team:

I hold the BCE, Brookfield and Fairfax preferred shares referenced. Obviously they have not fared well over the last few years. I am wondering if there is any reason to hold them at this point? I did notice on Monday when the market was broadly down that they were among the few holdings that were up. Do you think holding them as insurance against a market decline has any merit, or should I just book the loss and move on? As always, your insight is appreciated. Thank-you,

Q: BNS.PR.G stock was issued at 25.00. Today it traded about 26.88. Computer says the dividend is 6.63%. This seems to be too good to be true. What am I missing here? I am retired and invest for income. What is your opinion of BNS.PR.G for income & What is you opinion of the reset. Many thanks.