skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

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

Q: I'm trying to make decisions for my retired mother's taxable account.

In the current environment, do preferred shares make more sense than bonds or other fixed income strategies? If so, can you recommend a few of the best preferred share funds (or would an ETF like CPD or ZPR be a wiser option)?
Read Answer Asked by Kevin on May 12, 2020
Q: Can you comment on these ETF's I presently hold in a corporate unregistered acct. I have a large amount in DVY.US - not sure why (previously with a FI ) Looking to update this portfolio based on present times. In At least a 5 year hold. Please take as many credits as needed.
Thanks so much.
Read Answer Asked by Lorraine on May 05, 2020
Q: France is starting to see food inflation. In some cases, it's quite impressive numbers percentage wise. If we do get more wide-spread inflation, due to the massive stimulus, would that be a positive for preferred share resets, which I've read go up with higher interest rates? The ETF ZPR currently pays 7% annually, which is usually a sign of future cuts, but on the other hand, it's been going up for 3 weeks. This question is for an account that is 60% in bonds and needs more income.
Read Answer Asked by Matt on April 28, 2020
Q: I hold this in my Cash account (for income) and it is underwater (has been for a while). In your opinion, would I be better off to harvest the loss and purchase 2 or 3 individual top quality preferred shares? If so, can you provide some specific suggestions (I am overweight financials). I assume I would have to wait 30 days to purchase the individual shares to avoid the superficial loss?
Please deduct credits as appropriate.
Thank you.
Read Answer Asked by Carlos on April 22, 2020
Q: Good Evening
RATE RESET PREFERRED SHARES
The interest rate on rate reset preferred shares is set every five years by adding to the spread the interest rate of the 5 years Canadian government bond.
What happens if the the 5 years government bond is set at a negative rate?
For instance, the interest rate spread on BAM.PR.Z is 2.96%.
On December 31, 2022 a new interest rate will be set for BAM.PR.Z. Lets assume that the interest rate on the 5 years Government bond is negative on December 31, 2022 at -.5 %.

Will the new rate on BAM.PR.Z be 2.46% (2.96 minus .5) or will be set at 2.96% ??
Thank you for your help during these difficult times.
Read Answer Asked by Terry on April 20, 2020
Q: Given the current economic situation, are preferred shares a good buy? They are all down in price and their dividends are up to 6 to 8%. I understand their upside is less than the common shares, but at the same time because they take priority over the common shares, the dividend and capital is safer than the common shares. I'm thinking of these as an alternative to a bond ETF, because the preferred prices have declined more. What are your thoughts? Is it better to buy individual shares or an ETF? Any ETF recommendations?
Read Answer Asked by Jack on April 07, 2020
Q: In my RRSP accounts I have built up a laddered GIC portfolio in addition to a variety of stocks and equity etfs, taking the income generated by the portfolio and adding to the ladder. Given the low rates for 5 yr GIC, under 2%, I’m thinking of taking this years income and purchasing CVD, which has a lower payout but more stability than the above mentioned Preferred share ETFs.
I may split my purchase between CVD and one of the above Preferred Share ETFs and am leaning towards ZPR as performance and MER of the 3 is similar but ZPR has a higher dividend payout.
In addition to better income, interest rates should be close to bottoming and if I stage my purchases over the next 3 months I will benefit from unit price appreciation when rates start going up and will have locked in a 5-6% return.
Your thoughts please.
Read Answer Asked by Bruce on March 13, 2020
Q: I purchased XBB and am looking for another fixed income etf to compliment it. Thanks, Len
Read Answer Asked by Leonard on February 12, 2020