Investment Q&A

Q: Thank you for your earlier answer to my question related to these types of funds! But it leaves me with one follow up! In a tax sheltered environment (RRSP/TSFA) is an ETF focused on preferred shares a good choice for fixed income. From my readings, preferred shares ETF seem to be better suited to an un sheltered portfolio because the 'interest' is treated as a dividend for taxation purposes.

Would I be better off in a tax sheltered environment to purchase bond traded funds such as PSB or XSB? It this is a better option which would you choose? With the prospects of rising interest rates in the USA, would I be wise to mix in some US Corporate bonds as well, such as USB? If this is a better option would a 60/40 split (USB/PSB) be a good split?

Thanks again!!

Q: Is now a good time to establish positions in a preferred share ETF? Is there a significant difference among the various funds available (ie: CPD, PPS, ZDV or the National Bank Preferred Equity Income Fund - sorry could not find the symbol)? With interest rates likely to increase, how stable are each of these funds and if it is a good investment (1 to 3 years) which would you recommend? Please indicate how you would rank these funds for performance.

Thanks

Q: Recently, you recommended enb.pr.u as a possible preferred investment. Could you please give me the details regarding the recommendation. i.e.
-what kind of preferred is it? reset?...
-what is the actual yield?
-how often does it pay?
-why do you think this is a good investment at this time?

Also, could you recommend 2-3 other investments in this area that would be as good as this one and explain why they might be good investments?

As always, thanks for your guidance.

Q: My question, as another recent subscriber asked, is will Sherritt survive? I noticed their 2018 bonds are trading at 62.25 for a 27% yield, and the 2020 bonds are trading at 60.25, for a 21% yield. First of all, shouldn't the 2018 bonds be paying less than the 2020 bonds, because the risks are increased with a longer duration? But my main question is, would these bonds be a reasonable investment? They are rated "B". All the company has to do is not go bankrupt, and one would get great yield for a few years, and capital appreciation if the company stays solvent and they reach maturity. Even if the company went bankrupt, I suspect the assets could cover a good part of their bond obligations. I would appreciate any thoughts you may have.

Q: Hi Peter and Team, if you had to choose between Enbridge common share (ENB)and Enbridge Inc. cumulative redeemable pref shares series H (ENB.PR.H), which one would you select for income, appreciation potential and safety? Thanks, Gervais

Q: Hi Guys,
I need a replacement for my Russel Metals debenture that was just called by the company.

What do you think of BTB REIT? If you think the REIT is solid enough, which of BTB.DB.D or BTB.DB.E would you select as a "Speculative" fixed income investment.

Thanks
John

Q: I am trying to understand Mandalay's US$50 million of senior exchangeable bonds on their balance sheet (see below).
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US$50 million of senior exchangeable bonds issued April 29, 2014.
The Bonds, which will have a maturity date of five years from the issue date, will be issued at par and carry a coupon of 5.875% per annum payable quarterly in arrears. The Bonds will be exchangeable into ordinary shares of the NYSE Arca listed SPDR GOLD exchange tradable fund (the "GLD Shares") at an initial exchange price of US$149.99 which is a premium of 20% above the VWAP of GLD Shares on April 29, 2014 (currently equivalent to a gold price of approximately $1,556 per oz). Further details regarding the terms of the Bonds and the Loan Agreements, subject to the revised terms described herein are set out in the Company's press release of April 23, 2014.
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Could you comment on whether this bond issue is still a good deal for Mandalay given the huge drops in the SPDR price and the Cdn dollar.
Any help simplifying and interpreting this deal for me would be much appreciated - it seems very complicated !!

Q: I bought $10,000 Canam Convertible Debenture in November, 2011. Since then I have been receiving interest payments interest payments of $312.50 on April 30 and October 31. In October, 2015 I received a call from my broker that the bonds were maturing on October 31, 2015 and I had to decide to receive shares or $10,000 face value by October 23, 2015. I chose shares and received 833 shares on October 28, 2015, with a payment for factional shares and $234.38 interest credited on October 30, 2015. Even though I chose shares I believe I should receive interest right to maturity which would be $312.50. Do you agree the company made a mistake when crediting my account? I phoned my broker and told them that I thought there was a mistake. They gave me Canam Group's investment relations number and said to phone them with my problem. Before I phone I wanted to get your opinion on whether you agree with my calculation.

Thank you.

Q: Hi,
Would the recent weakness in Boyd have anything to do with the convertible debentures that are now being converted into shares as per a press release today? What are your thoughts on the impact on the company and share price? Thanks.

Q: Hello Peter, can you tell me where can I find details of cumulative redeemable preference shares like, life, call price/date,etc. Which one of the above would you suggest, perhaps a better on or two.
Many thanks, J.P.Burlington

Q: 5I Team,

Any thoughts in particular on TRP.PR.C? The 8%+ yield looks attractive, especially for a Blue Chip preferred, but I do see that the share price is down about 40% yoy as both the preferred and the energy sectors have come under pressure over that period. Would you touch this pfd now?

Thanks

Q: I am a retired investor looking for income. Corporate reset preferds look interesting at discounted prices. At what measurements are they reset? Can you recommend any thanks Paul

Q: What is your opinion on cpd?
is it a buy now and what is your future outlook?
Would cpd rise with a rise in interest rates and with interest rates at the bottom this would be a good entry here?

Q: Hi Peter & team,
Quote from your answers to CPD
"We would be 'OK' with CPD for safe income. However for any strategy or fund that requires systematic withdrawals, such as an RRIF, we would not suggest it as a great ETF in which to initiate a position."

Please explain your position, thanks. In our case, the withdrawal will be equal to minimum

Q: What is causing the general spike in the prices of rate-reset preferred shares and is this a good time to buy? I was expecting selling pressure as we approach year-end to pick up good value (lock in spread vs GoC 5-yr in a 5 year ladder) but now I am fearful of both the potential for losses from currently elevated prices and of letting the opportunity slip away if they keep rising.

Q: What are your thoughts on this preferred share. Would you expect an increase in the price

Q: Would this be a good buy for income. The dividend is about 6%. Under what scenario could I lose money. I need to protect my capital. Thanks Cathleen

Q: What do you think of this as a bond substitute. Is the recent drop in price a concern or an opportunaty

Q: I notice there haven't been reports or comments on this company you cover for tha last year or so.

Has your opinion changed on it or is it basically the same as the 2014 report?

Do you think that the Dorel Convertible Debenture would be a sound addition to one's US fixed income portfolio?

Thanks

Q: I was looking at this preferred share innergex power 5.75% ser C perpetual price of $18.50 yield 7.77% and callable in jan18. Can you please explain the biggest risk with this type or security outside corporate risk ? Am i correct to assume that the yield of 7.7% is only until jan 2018 and the yield thereafter will be the terms of reset or is it a perpetual 7.7% ? Thank you