# ZPR Rate Reset Preferred Share ETF



## robfordlives (Sep 18, 2014)

Apologies if there is a thread on this ETF but could not find one by searching.

The behaviour of this ETF has perplexed me this year - we have rising rates, however it has lost value when you would expect the inverse.

Looking at 2013 to 2016 this nearly lost 50% of its value so it is certainly sensitive to interest rate moves. What gives? Would you classify something like this as fixed income or equity portion of portfolio?

Raymond James has a sample portfolio of pref's...maybe I should just hold a few of these?

https://www.raymondjames.ca/branches/premium/pdfs/preferredsharesreport.pdf


----------



## doctrine (Sep 30, 2011)

Interest rates haven't risen to the price that many of these preferreds were issued at, so rates have a while to go yet before these preferred issues see par value. These should be considered more equity than fixed income because of their higher risk profile.


----------



## gardner (Feb 13, 2014)

Preferreds are definitely equity. Canadian preferreds are a specialist item and are not well suited to the broad-based ETF approach. Folks who are successful with preferreds closely study the rates, reset dates and prices of specific shares and choose carefully the ones to hold. I own some ZPR and it has not been a winner for me. I anticipate taking a loss on it later on this year.


----------



## fireseeker (Jul 24, 2017)

Yes, interest rates are rising ... but only for the short term. Long-term rates are flat.
ZPR jumped 15% in 2017, and has averaged 10.5% return over the last three years. So it has recovered a good hunk of its loss.
I concur with doctrine: consider prefs conservative equity holdings.
Randomly picking a name from the Raymond James list is akin to betting black on the roulette wheel. It may pay off, but you're gambling, not investing. (Also the list's yield-to-call column is very misleading. You need to know yield-to-worst.) 
Before dipping into prefs, suggest spending some time with the gold standard for pref info: James Hymas.

http://prefblog.com/


----------

