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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi 5i team, which of the above preferred ETF's would you recommend right now primarily for income and some price appreciation. Which one has the most to gain from increasing interest rates.
Thanks
Read Answer Asked by Nancy on January 17, 2017
Q: I was looking to take a position in BB, but I noticed that they have a convertible debenture paying 3.5% and convertible until 2020 at a price of $ 10, I think that this might be a better way to play it, what do you think?.I notice that there is nothing on the ask side, why is that, is it that thinly traded.
Thanks
Read Answer Asked by auftar on January 16, 2017
Q: To add to your response to Carl's question "why would anyone ever buy pref shares" - Hymas Investment Counsel specializes in Pref Shares and has a number of publications available on their website including "Why Invest in Preferred Shares" and "Security of Income versus Secrity of Principal". These might be helpful. www.himivest.com.
Read Answer Asked by Kirk on January 06, 2017
Q: Income investments - preferred shares
On Jan 4, you posted an answer for an income investor, expressing approval of ZPR (BMO Laddered Preferred Share Index ETF). I am somewhat cynical about preferred shares, their being subject to the interest rate sensitivity of bonds, lacking the upside of common stock and generally lacking a fixed redemption date or any other assurance of capital preservation. I wonder whether, even on a reset date, they would necessarily trade at their face value. If I am right, I can't understand in what circumstances they would be suitable (without fixed redemption or as an interest-rate play with a high coupon). What am I missing?
Read Answer Asked by Carl on January 05, 2017
Q: Regarding your answer provided to Carla today on CVD and CPD, I understand your comments on CVD, but I am still not clear on how rising interest rates can impact CPD. How do rising interest rates affect a preferred share ETF such as CPD? Should I be cautious about buying at this time? Thanks for all the awesome info you provide.
Read Answer Asked by Pamela on January 04, 2017
Q: Hello,

Are the distributions for CPD and CVD considered dividend or income? Which would be better in a TFSA and which would be better in a non-registered? My understanding is that both of these ETFs should do well in a rising interest rate environment.

Best,

Carla
Read Answer Asked by Carla on January 04, 2017
Q: I wish all 5i staff and they families Season's Greetings' I hope 2017 sees our portfolios grow ever healthier.

I want to gradually add some preferred shares to my portfolio, partly in lieu of some fixed income. In looking at potential candidates, I am attracted to the above three ETFs, particularly ZPR with its laddered feature. Do you have any thoughts? Are all distributions of such ETFs taxed as dividends? Thanks, Bill
Read Answer Asked by Bill on December 23, 2016
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