Investment Q&A

Q: Given the current economic situation, are preferred shares a good buy? They are all down in price and their dividends are up to 6 to 8%. I understand their upside is less than the common shares, but at the same time because they take priority over the common shares, the dividend and capital is safer than the common shares. I'm thinking of these as an alternative to a bond ETF, because the preferred prices have declined more. What are your thoughts? Is it better to buy individual shares or an ETF? Any ETF recommendations?

Q: I currently own a few reset preferreds in a registered account that mature from 2020 - 2023. I had planned to hold them to maturity. In the current conditions, should I continue to hold them? If not, what would you suggest in this space? Your expert advice is appreciated! Lloyd

Q: Do you like the Preffered space at this point. Would you be a buyer of any of CPD, ZPR or HPR? Thanks for your valuable advice. Rob

Q: Hi Everyone at 5i! I hope you and yours are all healthy and doing well! I am 38.17% down on my CPD holding. I now pays a hefty 7.11% and the share price is nice. Is now a good time to invest, collecting the dividend and waiting for the price to get better? This is for the conservative part of the Portfolio . Cheers, Tamara

Q: Both are tracking the last month in a similar downward trend. I understand why CPD is down with a predominance of reset preferreds and lower interest rates. Why is ZRE taking a hit with lower interest rates?

Q: What percentage of CPD is in resets these days? It sure has been getting hammered.

Q: Could you suggest six high quality preferred shares to buy. Thanks

Q: In my RRSP accounts I have built up a laddered GIC portfolio in addition to a variety of stocks and equity etfs, taking the income generated by the portfolio and adding to the ladder. Given the low rates for 5 yr GIC, under 2%, I’m thinking of taking this years income and purchasing CVD, which has a lower payout but more stability than the above mentioned Preferred share ETFs.
I may split my purchase between CVD and one of the above Preferred Share ETFs and am leaning towards ZPR as performance and MER of the 3 is similar but ZPR has a higher dividend payout.
In addition to better income, interest rates should be close to bottoming and if I stage my purchases over the next 3 months I will benefit from unit price appreciation when rates start going up and will have locked in a 5-6% return.
Your thoughts please.

Q: You are right when you say preferred shares are not bonds, they fall fast in a bad market.

Would it be wise to add a modest amount of ZPR or CPD during this period and take the dividend for a while? This would be in an RRSP

Q: I purchased XBB and am looking for another fixed income etf to compliment it. Thanks, Len

Q: CPD was a disaster and I sold it for loss. Now I'm looking at XPF - it held up better and the US exposure may add diversification. What do you think? Or should one give a miss to these pref ETFs altogether?
Thank you
jerry

Q: Hello,

I want to add fixed income to balance my portfolio and will hold it in a cash account. I'm targeting 15% fixed income with > 10 year hold.

1. Are the ETF's in the income portfolio appropriate? or should I have more concentration? Or a different selection?

2. If > one ETF do you have a weighting suggestion?

3. Will these be taxed as income or dividends?

Thanks!

Dave

Q: Good morning
I own CPD which has trended downwards in price over the last year and is now yielding 6.9%. I am considering selling CPD for tax losses and if so, what would be a more sensible strategy. Buy back into CPD after the appropriate delay or Buy something else like a blue chip equity. I know the legal difference between preferred and common but it seems that over an extended buy and hold, commons will prevail albeit with dips along the way. In reality how often are preferred rights called into play to the detriment of common with Canadian blue chips? To me, preferreds offer the worst of both worlds. At this point, my CPD shares are part of my fixed income side and a switch to equities will rebalance things, I know.

Q: I am wondering what is the reason CPD is at a lower level than the financial crisis of 2008. I am at a loss on it for a few years now and wondering if holding another year or two makes any sense.

Q: Looking to increase my fixed income exposure. Currently hold CBO, XBB, and CPD (preferreds). Thinking of adding XHY in addition to these, would you recommend additional ETF's in this space to help diversify?

Q: In an RRSP for the preferred shares ETF portion (5%) of a balanced portfolio, which do you prefer and why?
Thanx!

Q: If I was to invest $400,000.00 into an all bond portfolio, could you suggest what bond securities you would invest the money? Thanks, Bill

Q: I currently own CPD in a taxable account at a loss position. With interest rates looking like they are going downwards would it be positive for preferred resets? Would you be okay with a switch from CPD to XBB at this time? I have CPD as part of my fixed income portfolio even though it is kind of a hybrid between equity and bond. Thanks for your insight

Q: 5-I,

I own CPD plus 5 individual rate reset preferred shares with reset dates ranging from 2020 to 2022. . When I look at the gains / losses I see CPD has been hit much more than any of the individual items over the past year. My question relates to how the NAV is determined with CPD. Is it very similar to that of a mutual fund , ie if many sales orders are received the ETF needs to liquidate, thus causing a drop in NAV? Any other thoughts why such a large performance difference between CPD and individual preferred shares ?

Thank you,

Paul

Q: What are your thoughts on selling all common stocks in a non registered account to preferred shares for an 86 year old senior ( this move is for capital preservation concerns)? Apparently the preferred share asset class has been beaten up lately, according to this senior's advisor! what would be your top 5 preferreds that you could suggest? Please take as many credits as you wish. Thank you!