Q: In a question asked Jan 2025 whether it was a good time to buy CVD, you answered "Yes, with rates heading lower and corporate earnings moving higher, convertibles we think look good today". In a more recent post on your Income model portfolio, you speak of selling the CVD to buy equities you said "We liked the CVD ETF during the high interest rate environment from 2022 and on, but without factoring in its high yield, its unit price is mostly in a downtrend. While we feel we caught most of the upswing in unit price over the past couple of years, we are preferring to add to individual stocks at this point in time." So for someone who's not looking to raise cash, and likes the dividend is it just as well to keep it or are you suggesting time to take profits, and move to something else? What would you suggest?
Thanks!
Thanks!
5i Research Answer:
We continue to like CVD and feel that it can do well, but another part of our rationale is that equities have sold off significantly since January, and this creates an opportunity to switch from CVD (which has been stable) to a dividend-paying stock, which we feel has more long-term upside potential.
We feel that rates still have more downside potential, and this can benefit CVD, and so we continue to like it, but there are some redundancies with CPD and CVD, and we like the current opportunities in the equity markets.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in CPD.