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 investors appeared to have been buying rate reset issues in anticipation that rising 5-year Canada bond yields would improve their dividend rates. However, when bond yields hit their lowest level of 2017 in April, that rationale lost support. The decline in bond yields reflected a risk-off shift in investor confidence which impacted preferred shares, as well as common equities. Also, index rebalancing later in the month saw more issues entering the index than being removed. In order to make room for the additions, indexed portfolio managers may have been forced to do more generalized selling of other issues, which led to further weakness in the market. In addition, the issuance of structured notes linked to preferred share ETFs declined, thereby reducing preferred share demand for hedging purposes. The S&P/TSX Preferred Share Total Return index had a flat return of 0% in the month.