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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: 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
Q: I own PWF.PR.L, RY.PR.O, BMO.PR.Z about equal amounts for a total of $150K which is about 5% of my holdings. They have been softening recently, is it time to sell and what would recommend? I have about 20% in bonds and balance heavily skewed to finance, utilities, infrastructure.
Read Answer Asked by Pierre on November 23, 2016
Q: Purchased several years ago at $25. plus, I am now looking at a pref. that trades around $14.
Current yield is just short of 10%.
In your opinion Is it time to double down and enjoy more of the juicy yield or bow out and lick my wounds?
The position makes up less than 5% of my portfolio and is my only preferred share holding.
Should you think it prudent to sell this security, would you please suggest an alternative.
I am 70 and comfortably retired.
Dave
Read Answer Asked by Dave on November 21, 2016
Q: Hello Peter, Manulife, Enbridge, Royal bank have been offering preferred-shares. Would appreciate your help selecting the best and their trading symbols. Should I also consider I-shares and or Horizons preferred shares? Your opinion of their vulnerability in view of future interest rate increases is greatly appreciated. Many thanks,
J.A.P. Burlington
Read Answer Asked by Joseph on November 18, 2016
Q: I wanted a quick opinion on the nature of these two ETF's, does ZPR hedge ZRE with interest rates? What I mean is that if interest rates rise ZPR should rise and ZRE should decline and vice versa? Looking long term the interest rate effect will balance out with growth of the companies within ZRE and ZPR should be higher with higher payouts as the preferreds reset?
Read Answer Asked by Nino on November 18, 2016
Q: Good morning,
Looking for your insights into the latest iteration of preferred shares issuances- fixed /resets with minimum floors. In the past number of years the broad market for various types of preferred shares have been negatively impacted by shocks( the perpetual market in 2013 "Taper Tantrum" / the most recent declines in fixed /resets with rates lower for longer) which for the most part, were wholly unforeseen. In terms of the newest preferred type, could you please offer your analysis on what factors could create the same problems( ie downside) for this share structure.

With thanks,
Brad
Read Answer Asked by Brad on November 18, 2016
Q: Hello team, I have an opportunity to purchase some Bam Cumulative Minimum Rate Reset Class A Preference Shares, Series 46. Has a coupon of 4.8%. Is this something to consider for a retiree. What are the pitfalls if any and what should I be aware of when considering purchase of a preferred share purchase? How will interest rates either US or cdn affect the share price? How long should one hold onto the shares?
Thanks for the great service
Read Answer Asked by pietro on November 15, 2016
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