# Thoughts on ZPR ETF



## dime (Jun 20, 2013)

With all this market volatility where to invest? ZPR catches my eye with a beta of only 0.4. It's looking a little oversold. Morningstar shows a 4.7% 12 month yield.
Keep in mind a 30 year bond only gives you less than 2.5% currently. It's diversified with 144 different preferred laddered at varying reset dates 5 years or less. Its a bit like a floating rate bond fund with a duration under 5 years. 

It seems like a good vehicle for fixed income yield with a future of potentially rising interest rates going forward. The yield will increase as the preferred portfolio rates reset with the higher rates going forward. It's has over billion in assets under management. 

What do you guys think?


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## Woz (Sep 5, 2013)

Preferred share ETFs are hard to evaluate as each individual holding’s fairly complex. However, the 4.7% yield is more akin to the coupon rate on bonds than the yield to maturity. The preferred shares that are resetting in the next 1-2 years are most likely going to be resetting to lower yields. For example, looking at the first preferred on their holdings list, BCE.PR.K, it yields 4.15% but will be resetting Dec 2016 at the Bank of Canada 5 Year (currently ~0.9%) plus 1.88%.

It’s hard to know how that ETF will do overall with rising rates. If rates rise, the holdings that reset right before rates rise will do very poorly and the holdings the reset right after rates rise will do well.

I’ve been purchasing individual preferred shares with rate-reset dates around 2018/2019 as I expect they’ll do well (or at least maintain their value while providing dividend income) if rates start increasing in 2016 and take 2-3 years to return to normal levels.


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## agent99 (Sep 11, 2013)

Interested to hear what others might say about ZPR. 

I have about $40k from recently matured corp bonds. Have been looking at buying one or two individual rate reset pfds. Only looked at one so far. BCE.PR.C trading at ~$17 and yielding 5.2%. Any others worth looking at? 

At present, I own two pfds - both splits with fixed retraction date. (PIC.PR.A and PVS.PR.B) Could possibly add another like DFN.PR.A ?

How would these alternatives compare with buying ZPR?


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## scorpion_ca (Nov 3, 2014)

I purchased 1,000 shares of ZPR in the middle of February, 2015 while it was trading around $13. I think it was trading around $15 last year. I thought I got a good deal. Now It's trading $11.90. I received $144 as a dividend whereas I lost $1,100 though I don't have any plan to sell it in the near future.

Some of the forum members suggested not to purchase preferred shares instead better to purchase XIC, VCN or ZCN. Now I feel that I should have purchased VCN rather than ZPR.

http://canadianmoneyforum.com/showthread.php/35226-BMO-Preferred-Share-ZPR-vs-GIC-HISA

Here is a great article - http://www.moneysense.ca/invest/the-income-illusion/


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## gardner (Feb 13, 2014)

ZPR has not been especially kind to me. I'm down from $13.50 or so ACB. I also have some PFF and it's more stable, but still not a very good performer.

The yield looks good, but there is no real support behind the asset value -- there's nothing to drive the up-side. I try to stick to very small % of preferred holdings.


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## al42 (Mar 5, 2011)

Hasn't been very kind to me as well. Down about 15% and going lower. If the BOC decides to cut interest rates again this will go 
down more. I've been holding on waiting for a rate increase which should get ZPR moving in the other direction.


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## james4beach (Nov 15, 2012)

Just brutal performance on this, both ZPR and CPD hitting new lows for the year. The trailing 1 year return of ZPR is -18%.

I never understood preferreds, they seem too complex to me. I'm listening to a call-in show on BNN and two people have called in this hour saying that the preferred market doesn't make sense / is wrong.


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## gardner (Feb 13, 2014)

Yup. ZPR's been a total dog since I've owned it. I believe I have learned my lesson regarding preferred ETFs and would not use anything similar again. I think preferreds are something you have to spend a lot of time at, understanding each individual issue -- it is not an asset class that can be indexed successfully.

What I understand least is what forces ever price any preferred at a value much above par+future interest. Yet historic values, even a few months ago, showed major preferred issues at 50% above par. If preferred are on sale, it might be a time to dump the ZPR and just pick up some TRP.PR.C or something.


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## gardner (Feb 13, 2014)

Yup. ZPR's been a total dog since I've owned it. I believe I have learned my lesson regarding preferred ETFs and would not use anything similar again. I think preferreds are something you have to spend a lot of time at, understanding each individual issue -- it is not an asset class that can be indexed successfully.

What I understand least is what forces ever price any preferred at a value much above par+future interest. Yet historic values, even a few months ago, showed major preferred issues at 50% above par. If preferred are on sale, it might be a time to dump the ZPR and just pick up some TRP.PR.C or something.


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## dubmac (Jan 9, 2011)

I did some research a year or so ago into preferred shares, and focused on the local preferred guru....Jamie Hymas, who has a blog that he regularly updates, with much information, 99% of which, I do not understand.
blog here: http://prefblog.com/ He refers explicitly to CPD and ZPR.
He also does some analysis on why pref shares and ETF's have fared poorly in the past year here http://prefblog.com/?p=37596.
Hymas did respond to my question on email. He may be a good resource. Definitely knows his craft!


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## james4beach (Nov 15, 2012)

Is Hymas able to manage a portfolio that demonstrates a good total return? I frequently hear his name, but is there any proof he actually knows what he's doing?


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## AltaRed (Jun 8, 2009)

Look for yourself. He publishes his fund's results each month relative to CPD, ZPR, etc.

For the most part, he outperforms but as an asset class, prefs have been brutal.


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## dubmac (Jan 9, 2011)

good question. 
you can dig through some of the monthly updates to find some evidence (or not) that he knows his stuff, but the fact that some of the financial talking heads (Heinzl) at the G&M turn to him for advice may be significant. He formed Hymas Investment Management, & he uses his fixed-income background to specialize in the preferred share marketplace to rigorous, quantitative examination. http://www.himivest.com/


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## john.cray (Dec 7, 2016)

I've been keeping an eye on Hymas' site for the last year or so and although most of the things are over my head I learned the following:
1. Canadian Preferred Shares market seems to be inefficient. My interpretation: this creates opportunities to buy them cheaply
2. When they fall his advise is: "Shut up and clip your coupons"

I hold ZPR. Indeed it has not been kind to me lately but it does act as I expect it.

My reasoning for holding ZPR (fixed resets) is to counteract the price movements of bonds (say VAB). Their market prices are negatively correlated: -0.18 if you click on the Assets tab
Not long ago when rates were going up ZPR's price performed nicely unlike that of VAB. Now it's exactly the opposite. The big difference it seems
though is the exaggeration of movements. ZPR swings up or down much more violently than VAB. This could probably be explained by the inefficiency.

The last point that we have discussed here and is controversial is if they should belong to equities of fixed income.
My fixed income income allocation is 30%. Composed of 23% bonds (ZDB + XQB) and 7% ZPR.


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## agent99 (Sep 11, 2013)

james4beach said:


> Is Hymas able to manage a portfolio that demonstrates a good total return? I frequently hear his name, but is there any proof he actually knows what he's doing?


You could compare him with an expert in , say, Energy stocks. You could be expert in pfds or energy, yet still lose money in current market. 

I have some ZPR. Just a little bit so I could tell a friend that I took his advice! I collect the dividends and maybe one day the unit price will recover:dispirited:


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## james4beach (Nov 15, 2012)

john.cray said:


> My reasoning for holding ZPR (fixed resets) is to counteract the price movements of bonds (say VAB). Their market prices are negatively correlated: -0.18 if you click on the Assets tab


Note however that if using that site, you enter XIC and ZPR as the two assets, the correlation is now substantially higher. One reason I haven't added preferred to my portfolio is that I always thought they acted too much like equities. Here's a chart of CPD versus XIU since 2008: http://schrts.co/gSmKKkJI

What I don't like about this relationship is that they align pretty closely on up & down segments. Preferreds fell when stocks fell, they both rally together, and reverse and fall together again.

I don't mean to say there is no place for them, but I just wanted to share my own thought process. Based on the correlations they've demonstrated, I feel that preferreds are very equity-like. I would say the same for junk bonds for example, which also also behave very equity-like. Given that similarity, I feel I would have to group them with equities in my asset allocation. So now I'd be asking the question, do I want to replace any of my existing US & Canadian stock *index* allocations with preferreds? I just can't bring myself to do that. There's a long history on the stock indexes, I have a good sense of how they behave historically, the markets are extremely liquid and easy to track with an ETF.

I can't consider preferreds in my fixed income allocation, both because of the equity correlation, plus the high volatility. ZPR had about a 36% drawdown a few years ago, which is quite intense. That's far more risky than what typical bonds (like XBB, VAB) ever can do... it's about 3X the risk of regular bonds. I just wouldn't be comfortable grouping them with bonds. I don't like grey areas in my asset allocation, but that's just my personal leaning.


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## Jimmy (May 19, 2017)

Posted this on prefblog. Will give an idea on how to model these but James Hymas recommended a modification ( see after the quote) I think there is a selling overreaction that is sending these lower than they should go. 




> I think I understand the recent price moves a little more based on a simple dividend pricing model. Let’s look back to when the GOV5yr was 2%.
> 
> So we have a 5 yr fixed reset PS = 25, Premium 3% GOC 5 yr 2%, yield = 5% div = $1.25.
> 
> ...


James Hymas felt it was more like 2/3 of the decline in the BOC 5 yr should go to yield and 1/3 price. So yields fall from 5% less 2/3 (1%) = 4.33% and price should fall to $23 ( 1/ .0433) or ~ 8%

Anyway, the prices don't reflect their value often. The key is if you are holding them for the LT , they still pay ~ 5% in div regardless of what the price is. What I may do is just buy these things only at near bottom conditions like now ( or maybe wait to see if there is one more rate cut)


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## john.cray (Dec 7, 2016)

My overall knowledge is superficial and I'm not trying to defend them - simply laying out my thinking and trying to understand other people's to reevaluate my decisions so feel free to poke holes in my theory.



james4beach said:


> Note however that if using that site, you enter XIC and ZPR as the two assets, the correlation is now substantially higher. One reason I haven't added preferred to my portfolio is that I always thought they acted too much like equities. Here's a chart of CPD versus XIU since 2008: http://schrts.co/gSmKKkJI


Ok here it is. According to this backtest the correlation is 0.42. This is weak correlation. Data is only since 2012.
I do agree with you that they are way way more volatile than bonds and somewhat move along with stocks (0.42)

I add them, in a relatively low proportion (7% of overall), so that I have a hedge against rising rates, during which the bonds' prices will drop.
It's hard to predict the future of where interest rates are going of course but we are already in negative yield to maturity for a lot of the
bonds out there and in 30 years bond market. So I'd like to have something for the time when/if we get to a point where central banks would start
normalizing. If we never get there -- I am being paid 5.5% [current] yield with tax efficiency to wait.
People don't seem to hold bonds for the income any more, but *only* as a counterweight to equities. How much lower can interests go
so that bond prices keep on going up? Is there no bottom? Where else do you get fixed income?

Cheers,
JC


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## fireseeker (Jul 24, 2017)

james4beach said:


> Note however that if using that site, you enter XIC and ZPR as the two assets, the correlation is now substantially higher. One reason I haven't added preferred to my portfolio is that I always thought they acted too much like equities. Here's a chart of CPD versus XIU since 2008: http://schrts.co/gSmKKkJI


James, is this chart price only, or total return?

Also, if you change the start date to 2007 some interesting patterns emerge.
1) Prefs appeared to anticipate the 2008 equity collapse
2) Prefs utterly failed to follow the equity surge in 2013-14
3) Despite their apparent correlation, prefs have dramatically diverged from XIU this year.

Also consider that during this period interest rates have consistently fallen. This should help equities and should either be neutral or bad for rate-reset prefs.
If interest rates stabilize or reverse course, then the future correlation between XIU and prefs may well look very different.


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## james4beach (Nov 15, 2012)

fireseeker said:


> James, is this chart price only, or total return?


It's total return



> Also, if you change the start date to 2007 some interesting patterns emerge.
> 1) Prefs appeared to anticipate the 2008 equity collapse
> 2) Prefs utterly failed to follow the equity surge in 2013-14
> 3) Despite their apparent correlation, prefs have dramatically diverged from XIU this year.


Yes, the prefs do seem to correlate with equities generally, but missed out on some of those equity rallies.



> Also consider that during this period interest rates have consistently fallen. This should help equities and should either be neutral or bad for rate-reset prefs.


Ah, good point. So interest rate direction factors into the performance relative to equities.

This is obviously very little historical data though.


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## john.cray (Dec 7, 2016)

James, for a better correlations picture and details take a look at this

Summary: ZPR-VAB: -0.18 | ZPR-XIU: 0.39 | VAB-XIU: 0.09
It's interesting to see the rolling correlations tab to see how it changes over time. There are times when
VAB-XIU jumps to 0.30


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## dubmac (Jan 9, 2011)

Rob Carrick in Sat (aug 24th) G&M, ROB p B10 looks at pref share ETF's in his article. quite an interesting read. None of the pref share ETF's have made $ over the past 5 yrs. Reason? interest rates. rate reset pref shares don't do well when rates drop - and rates are always dropping. Now that is something even I understand!


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## james4beach (Nov 15, 2012)

dubmac said:


> Rob Carrick in Sat (aug 24th) G&M, ROB p B10 looks at pref share ETF's in his article. quite an interesting read. None of the pref share ETF's have made $ over the past 5 yrs. Reason? interest rates. rate reset pref shares don't do well when rates drop - and rates are always dropping. Now that is something even I understand!


Let's look at the period when interest rates were rising in Canada. The 10 year benchmark yield increased from July 2012 - October 2018 starting at 1.6% and ending at 2.5%. It varied along the way, but this was actually a pretty significant increase NET in interest rates over a 6 year period.

ZPR didn't exist at the start so I'll use CPD. The CPD total return was +11.1%, compared to XIC +68.5%, XBB +15.1%
http://schrts.co/FDaAkCnU

So I'm not buying the story that it's simply about interest rates dropping. Here's a period where interest rates were rising, and yet preferreds did worse than both stocks and general fixed income.


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## dubmac (Jan 9, 2011)

james4beach said:


> Let's look at the period when interest rates were rising in Canada. The 10 year benchmark yield increased from July 2012 - October 2018 starting at 1.6% and ending at 2.5%. It varied along the way, but this was actually a pretty significant increase NET in interest rates over a 6 year period.
> 
> ZPR didn't exist at the start so I'll use CPD. The CPD total return was +11.1%, compared to XIC +68.5%, XBB +15.1%
> http://schrts.co/FDaAkCnU
> ...


I'm not an expert on this, but, if you get a chance, read the article. The focus of the article is on the effect of interest rate drops on rate-reset prefs - which most ETF's have in them...and ofcourse the fact that many investors dumped/are dumping their shares now - to cause the price of ZPR to drop.


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## Jimmy (May 19, 2017)

james4beach said:


> Let's look at the period when interest rates were rising in Canada. The 10 year benchmark yield increased from July 2012 - October 2018 starting at 1.6% and ending at 2.5%. It varied along the way, but this was actually a pretty significant increase NET in interest rates over a 6 year period.
> 
> ZPR didn't exist at the start so I'll use CPD. The CPD total return was +11.1%, compared to XIC +68.5%, XBB +15.1%
> http://schrts.co/FDaAkCnU
> ...


Not sure why you picked that period as it had interest rates rising and falling. They fell from 1.6% to .5% in 2016 then rose back to 2.5% for the 5yr BOC.

In a purely rising int rate period, from Oct. 1 2016 to Oct. 1 2018, ZPR rose 27%, XIU 17.5%, XBB fell -2.5%.

https://stockcharts.com/h-sc/ui


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## james4beach (Nov 15, 2012)

Jimmy said:


> Not sure why you picked that period as it had interest rates rising and falling. They fell from 1.6% to .5% in 2016 then rose back to 2.5% for the 5yr BOC.


I picked it because it was a long period (6 years) and interest rates ultimately ended much higher than they started. So it was a long period of rising rates.



> In a purely rising int rate period, from Oct. 1 2016 to Oct. 1 2018, ZPR rose 27%, XIU 17.5%, XBB fell -2.5%.


Thanks, that's a good time period as well. And you're right, ZPR did far better than stocks & bonds over those two years.

Realistically though, interest rates hardly shoot straight in one direction. If we did enter a long period of rising interest rates, there's going to be an ebb & flow to it, so I think the 6 year period is still an important case study.


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## Jimmy (May 19, 2017)

james4beach said:


> I picked it because it was a long period (6 years) and interest rates ultimately ended much higher than they started. So it was a long period of rising rates.
> 
> 
> 
> ...


My feeling is they are volatile mainly due to irrational investor behavior in both time periods. In looking at the past year, if you were making a 5% return then the BOC falls 1% so now you are making a 4% return is that a huge deal? Especially compared to a bond ETF w a ytm of 2.5%? Or a 5 yr GIC at ~ 3%.

From my ex before, the change in the BOC should go mainly to the yield. Prices should have fallen ~ 8%. Instead they fell ~ 18% from people just jumping out. Same w the rise of 27% in 2 yrs in that period. 

I think you limit these to maybe 10% of your portfolio max and buy them at the bottom and you hold them so long the price becomes irrelevant vs the dividend returns. They do hedge bonds well so you can have a FI portfolio w lowered interest rate risk ( HPR has a duration of ~ 4.5 yrs. )


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## james4beach (Nov 15, 2012)

Everything you write sounds sensible, Jimmy, especially some % weight within a broader asset allocation. And something you will stick with ... you shouldn't get scared out of it when ZPR is doing really badly (like now), because that's classic return-chasing behaviour. Good asset allocation requires commitment to the strategy and not giving up on your allocation choices.

For example if someone already has a 30% allocation target for ZPR, this would not be the time to abandon that. In fact, they should rebalance and buy more. Seems crazy right? This is why asset allocation isn't that easy. The same thing happens to people holding 50/50 stocks and bonds, during a stock crash.

Step 1 should be designing your portfolio or asset allocation, Step 2 is mentally committing to it, Step 3 is execution and stamina... the hard part.

I could never add preferreds to my portfolio because I don't have enough confidence / faith / understanding in them to make the allocation and stick with it no matter what.


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## john.cray (Dec 7, 2016)

James:

Here are the results of a quick test I ran. I picked a short period of rapidly rising rates and used GoC 5 year which is what ZPR is using for the reset.
I picked a trough to peak period of GoC5 year: 02/11/2016 (0.48%) - 10/02/2018 (2.48%) - it's pretty short but shows a dramatic rise nevertheless and I wanted to see how prefs and bonds have moved during this time.

Charts are here







Pure *price only* difference for this selected period is:

```
ZPR: +34.48%
CPD: +26.18%
VAB:  -6.05%
```


For the same period, total return can be seen here and the respective CAGRs are:


```
Feb 2016 - Oct 2018
ZPR: CAGR +13.18%
CPD: CAGR +11.17%
VAB: CAGR:  0.76%
```


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## john.cray (Dec 7, 2016)

dubmac said:


> I'm not an expert on this, but, if you get a chance, read the article. The focus of the article is on the effect of interest rate drops on rate-reset prefs - which most ETF's have in them...and ofcourse the fact that many investors dumped/are dumping their shares now - to cause the price of ZPR to drop.


Great article dubmac, thanks for pointing out. The link is behind a paywall is https://www.theglobeandmail.com/inv...eferred-share-etfs-a-mega-hit-with-investors/ for those interested.


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## Jimmy (May 19, 2017)

james4beach said:


> Everything you write sounds sensible, Jimmy, especially some % weight within a broader asset allocation. And something you will stick with ... you shouldn't get scared out of it when ZPR is doing really badly (like now), because that's classic return-chasing behaviour. Good asset allocation requires commitment to the strategy and not giving up on your allocation choices.
> 
> For example if someone already has a 30% allocation target for ZPR, this would not be the time to abandon that. In fact, they should rebalance and buy more. Seems crazy right? This is why asset allocation isn't that easy. The same thing happens to people holding 50/50 stocks and bonds, during a stock crash.
> 
> ...


I agree. It is a hard argument for them. It will be interesting to see how these do over longer periods like 20 yrs for CAGRs. They are more volatile than the market in the short time they have been available and it is hard to see investors treating them w more rationality. You wouldn't have wanted to invest in these like a year ago if you were just retiring and having to w draw them under conditions like now. 

I may just hold what I have now. May buy if they fall even further a little. They are the best value of most of the asset classes but not sure that is worth the volatility.


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## dubmac (Jan 9, 2011)

Jimmy said:


> You wouldn't have wanted to invest in these like a year ago if you were just retiring and having to w draw them under conditions like now.


If a retiree was looking at ZPR 5.5 yrs ago, I think it would make sense to add to one's pf. They would have felt then that it was a nice, easy way to get 5% on your money & tax-friendly in a non-reg account. But since they were issued, they have dropped 40%. Ouch. It's interesting to read what Hymas says at the end of article in the G&M: He thinks that ZPR is going to shone even if things stay the way they currently are (ie: low rates) - and that ZPR is totally oversold at this point. His words, not mine. and he has much more understanding on pref shares than I do.


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## Jimmy (May 19, 2017)

dubmac said:


> If a retiree was looking at ZPR 5.5 yrs ago, I think it would make sense to add to one's pf. They would have felt then that it was a nice, easy way to get 5% on your money & tax-friendly in a non-reg account. But since they were issued, they have dropped 40%. Ouch. It's interesting to read what Hymas says at the end of article in the G&M: He thinks that ZPR is going to shone even if things stay the way they currently are (ie: low rates) - and that ZPR is totally oversold at this point. His words, not mine. and he has much more understanding on pref shares than I do.


That is where I was finding my limited knowledge on these. That is why I was saying the declines are due to investor irrationality . He thinks a lot of it is just investor panic. Problem is either way these things are volatile. These are more volatile than the TSX where you can get a 7% return for less risk so why even bother. But I may grab some if the BOC falls to say 1%. It may fall further but that is a pretty good buy low pt. Then sell them when there is a good 1-1.5% rise in rates.


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## fireseeker (Jul 24, 2017)

Jimmy said:


> My feeling is they are volatile mainly due to irrational investor behavior in both time periods. In looking at the past year, if you were making a 5% return then the BOC falls 1% so now you are making a 4% return is that a huge deal? Especially compared to a bond ETF w a ytm of 2.5%? Or a 5 yr GIC at ~ 3%.
> 
> From my ex before, the change in the BOC should go mainly to the yield. Prices should have fallen ~ 8%. Instead they fell ~ 18% from people just jumping out. Same w the rise of 27% in 2 yrs in that period.


There are two other significant factors that aren't being captured here:
1) Investors aren't just considering _current_ yield, they are also anticipating _future_ yield. If GOC rates are expected to trend down or stay down for a long period, investors will discount future cash flows even more heavily than your current yield model.
2) Many rate reset prefs have become leveraged, amplifying movements dramatically. In the example above, the pref price was cited at $25 (par). But there are loads of prefs now at prices below $15 (and very, very few above par). In the example given, a drop of one percentage point of yield -- from 5% to 4% -- equates to a 25-cent drop on the yield paid on par ($25). But a 25-cent drop in yield on a $15 pref equates to a drop of 1.6 percentage points --a haircut that is 60% bigger!

Of course, the reverse is also true. Prefs trading far below par are also leveraged to increases in yield. This is one reason why we saw that big surge in pref returns during the 2016-18 period mentioned.


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## pacman (Sep 6, 2009)

fireseeker said:


> But there are loads of prefs now at prices below $15 (*and very, very few above par*).


I think I've mentioned the PVS preferred shares in the past - 4 different series, all currently trading above par I believe. They really are more like a bond than a share, as they have a set maturity date when the par value ($25) will be redeemed. I've been heavily invested for 5+ years in various series. Dividends are taxed favourably, so work well in a non-registered account.

https://www.partnersvaluesplit.com/investor-centre/preferred-share-and-dividend-information


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## Jimmy (May 19, 2017)

fireseeker said:


> There are two other significant factors that aren't being captured here:
> 1) Investors aren't just considering _current_ yield, they are also anticipating _future_ yield. If GOC rates are expected to trend down or stay down for a long period, investors will discount future cash flows even more heavily than your current yield model.
> 2) Many rate reset prefs have become leveraged, amplifying movements dramatically. In the example above, the pref price was cited at $25 (par). But there are loads of prefs now at prices below $15 (and very, very few above par). In the example given, a drop of one percentage point of yield -- from 5% to 4% -- equates to a 25-cent drop on the yield paid on par ($25). But a 25-cent drop in yield on a $15 pref equates to a drop of 1.6 percentage points --a haircut that is 60% bigger!
> 
> Of course, the reverse is also true. Prefs trading far below par are also leveraged to increases in yield. This is one reason why we saw that big surge in pref returns during the 2016-18 period mentioned.


Good pts. 

1) If investors were expecting another drop in the BOC 5 yr then yes they would likely dump even more shares sending the price further lower. If they are right and the BOC falls, the reset div $ will fall and yields fall too.


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## john.cray (Dec 7, 2016)

Some might find today's article from Garth useful: https://www.greaterfool.ca/2019/08/27/the-unloved-3/


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## agent99 (Sep 11, 2013)

A risk in holding preferreds or other securities within a fund. The manager can independently choose to close the fund if they are not making money managing it. Over the years, I have had this happen on two funds when their unit values had dropped. Much better to decide for yourself whether or not to bail, rather than have someone else decide.




> FIERA CAPITAL CORPORATION ANNOUNCES TERMINATION OF NORTH AMERICAN PREFERRED SHARE FUND
> 
> Fiera Capital Corp., the manager of North American Preferred Share Fund, will terminate the fund on or about Sept. 26, 2019.
> 
> ...


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