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,…

Following Strong Gains Earlier in the Year, Investors Pull Back from Preferred Share Market in May

In last month’s commentary, we noted the potential for the preferred share market to consolidate during May, and that is what transpired, as the S&P/TSX Preferred Share index returned -1.67%. Following strong gains earlier in the year, investors appeared to pull back from the market leading to declines in prices of most issues. The weakness…

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…

Canadian Preferred Share Market Unaffected By U.S. Presidential Election

In contrast with most global financial markets during November, the Canadian preferred share market was mostly oblivious to the surprise victory of Donald Trump in the U.S. presidential election. While equity markets reacted favourably to the more optimistic outlook, bond markets were dismayed by the potential for substantially higher U.S. budget deficits and increased inflation,…

Preferred Share Market Enjoys Robust Returns In October

The preferred share market enjoyed robust returns in October, powered by growing institutional participation and buying of preferred share Exchange Traded Funds (ETF). Rate reset issues had particularly strong returns, but still trail perpetual issues by a wide margin on a year-to-date basis. The S&P/TSX Preferred Share Index returned 2.32% in the month. There was…

Subdued Volatility for Preferred Shares in September

September featured less volatility for many financial markets than in recent months, not just for preferred shares, but also for bonds and equities. The S&P/TSX Preferred Share Index returned -0.10%, the FTSE TMX Canada Bond Universe Index earned 0.25% and the S&P/TSX Composite Index gained 1.22%. Even U.S. stocks, as measured by the S&P 500…