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Fairfax Financial Holdings Limited Cumulative Floating Rate Preferred Shares Series D (FFH.PR.D)
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Hamilton U.S. T-Bill YIELD MAXIMIZER TM ETF (HBIL)
Q: I am interested on your view of these two types of investments in this period of volatile markets: one being preferred shares of FFH, the other relating to treasuries.
Would either be suitable at this time?
Would one be preferred over the other?
Would you have preferred suggestions?
Would either be suitable at this time?
Would one be preferred over the other?
Would you have preferred suggestions?
5i Research Answer:
We would be quite comfortable with FFH preferreds for income. But even so, there is company risk here, and we can't compare it with an ETF that owns guaranteed US treasuries. HBIL has an active covered call strategy which enhances income. It does have interest rate exposure but so does any (non floating-rate) preferred shares. We would prefer HBIL. There are dozens of covered call funds and hundreds of preferreds, so much depends on what an investor is seeking. But from a safety perspective we would be quite comfortable with HBIL.