Preferred Share Market Enjoyed a Strong Month in September as Investors Focused on the Favourable Economic Conditions

The preferred share market enjoyed a strong month in September even as other fixed income instruments, such as bonds, struggled. Preferred share investors focussed on the favourable economic conditions and good corporate creditworthiness, and ignored geopolitical events and hurricanes. A somewhat surprising interest rate increase by the Bank of Canada (BOC) had positive ripple effects…

Preferred Share Market Declined in August as Risk-Off Sentiment Permeated Most Financial Markets

The preferred share market declined in August as risk-off sentiment permeated most financial markets. Geopolitical concerns arising from a nuclear shouting match between North Korea and the U.S. were the main cause of the more cautious investor attitude. Terror attacks in Europe and the threat of a U.S. government shutdown exacerbated the risk-off sentiment. In…

Preferred Shares Enjoy Another Good Month in July, Prompted by Rising Bond Yields and Interest Rates

The preferred share market enjoyed another good month in July. Rising bond yields and interest rates prompted higher prices for rate reset and floating rate issues, but lower prices for perpetual issues. Fixed rate reset issues gained 2.2% in the month, while perpetual issues declined 1.8%. On balance, the S&P/TSX Preferred Share index returned 1.11%…

Strong Performance by Rate Reset Issues Propelled Preferred Shares to a Robust Return in June

Strong performance by rate reset issues propelled the S&P/TSX Preferred Share index to a robust 2.84% return in June. Rising bond yields led to increased buying interest in rate reset shares, but growth in preferred share Exchange Traded Funds (ETFs) were also a factor. Approximately $260 million of new deposits flowed into the largest ETFs,…

Preferred Shares Rally into Early April, But Finish the Month Slightly Lower

The Canadian preferred share market initially extended its rally into early April, but prices declined over the balance of the month to finish slightly lower than where they began. In part, the pullback later in the month could have been market fatigue as preferred share prices have risen almost continuously since mid-November. As well, some…

Canadian Preferred Shares Continue Their Upward Pattern in March

Canadian preferred share prices continued to move upward in a seesaw pattern during March. An absence of new issues and occasional ETF flows were contributing factors behind the market strength. Interestingly, increased purchases of preferred share ETFs had a delayed reaction to underlying preferred share prices. As well, when ETF volumes declined, it led to…

Canadian Preferred Shares Continued to Move Upward in Price in February

Following their very strong gains in January, Canadian preferred shares continued to move upward in price in February, but at a more subdued pace. Reduced activity in preferred share Exchange Traded Funds (ETFs) probably accounted for the smaller preferred share gains. The Bank of Montreal Laddered Rate Reset ETF (ZPR) experienced a 45% drop in…

Preferred Shares Immune to the Volatility Arising From the Changeover in U.S. Administration

The Canadian preferred share market started 2017 with a bang, outperforming investment grade bonds, common stocks and even junk bonds by a significant margin. Unlike other securities, preferred shares were immune to the volatility arising from the changeover in the U.S. administration. In part, the strong performance of preferred shares reflected investors’ ongoing search for…

Canadian Preferred Share Market Moves Sharply Higher In December

The Canadian preferred share market moved sharply higher in December as large scale buying of preferred share Exchange Traded Funds (ETFs) pushed the prices of individual issues upward. A lack of new issues contributed to the market’s strength. As well, in contrast with recent years, there was relatively little tax-loss selling in December. Rate reset…