Archive for the ‘Indices and ETFs’ Category

HIMI Releases Research Into ZPR

Friday, March 1st, 2024

James Hymas, president of preferred share specialist firm Hymas Investment Management Inc. (“HIMI”), stated today that his investigation of discrepancies between Bank of Montreal’s (“BMO”) regulatory and advertising material for BMO Laddered Preferred Share Index ETF (TSX: ZPR) and the actual portfolio held by the fund has led to the conclusion that BMO has not been straightforward with its investors regarding the portfolio composition of the fund.

“Like many funds, ZPR relies on a gimmick to attract customers: in this case, the fund’s advertising emphasizes the idea that the fund is ‘laddered’”, Hymas explained. “The word ‘laddered’ is even included in the name of the fund! Certainly, the index on which ZPR purports to be based is laddered – the proportion of the portfolio that will reset in each of the next five years is very close to 20% for all reset years – even when measured between the monthly index rebalancing dates. However, BMO’s own report for ZPR dated October 31, 2023, shows a range of 11.38% to 27.69%.”

Hymas also stated “Problematical laddering is not the only issue. Aggregate weights by issuer for the portfolio are wildly different from the index on the dates I sampled, as are weights by individual issue – to the extent that over 12% of the fund’s portfolio is held in issues not included in the index. This does not support the prospectus claim that ‘The investment strategy of BMO Laddered Preferred Share Index ETF is currently to invest in and hold the constituent securities of the Solactive Laddered Canadian Preferred Share Index in the same proportion as they are reflected in the Index.’”

BMO claims that the quoted sentence “cannot be read in isolation and is qualified by other statements in the prospectus”, but this is not well-supported by the evidence – a discussion is embodied in the supporting commentary linked below. Hymas remarked that he will leave it to investors to determine for themselves whether they accept BMO’s claim, noting that the ‘same proportion’ assertion is repeated on the fund’s web page without any qualifying statement; the fund’s “Factsheet” – which may be obtained from the fund’s web page – repeats the web page’s unequivocal yet false statement of strategy.

“As it stands, BMO Laddered Preferred Share Index ETF is neither laddered nor an Index fund – BMO must make immediate full and frank disclosure of their shortcomings in the management of the fund and make restitution to clients for the risks that they have borne that they had been seeking to avoid”, Hymas concluded.

Further information has been published by HIMI on a dedicated web page at https://himivest.com/ZPR/ .

PPS: PowerShares Canadian Preferred Share Index Class Terminated

Saturday, May 13th, 2023

Invesco has announced [on 2023-1-23] (although not on their website, as far as I can see):

Invesco Canada Ltd. (“Invesco”) announced today proposed changes to its Canadian exchange-traded funds (ETFs) and mutual fund line-up. The objective of this initiative is to simplify the firm’s product offerings to enable it to sharpen the focus on areas of highest client demand. Another benefit will be increased capacity to provide better service and support while investing in those high demand products. The products listed below will be set to be terminated in 2023:

The firm plans to terminate the following TSX-Listed ETFs, effective close of business on or about April 21, 2023:

Terminating fund Ticker Symbol
Invesco Canadian Preferred Share Index ETF PPS
Invesco FTSE RAFI Canadian Small-Mid Index ETF PZC
Invesco FTSE RAFI Global+ Index ETF PXG, PXG.U
Invesco Global Shareholder Yield ETF PSY, PSY.U
Invesco LadderRite U.S. 0-5 Year Corporate Bond Index ETF USB, USB.U
Invesco S&P/TSX REIT Income Index ETF REIT
Invesco S&P Emerging Markets Low Volatility Index ETF ELV
Invesco S&P International Developed Low Volatility Index ETF ILV, ILV.F
Invesco Senior Loan Index ETF BKL.C, BKL.U, BKL.F

The TSX-Listed ETFs will continue to be listed on the Toronto Stock Exchange (“TSX”) until the close of business on or about April 17, 2023, when they are expected to cease trading and be delisted. No further subscription orders for units of the TSX-Listed ETFs will be accepted after the close of business on April 5, 2023. Unitholders of the TSX-Listed ETFs may continue to submit requests to exchange units until close of business on or about April 14, 2023 and to redeem units until April 21, 2023.

There goes another! It just goes to show what a 10+ year long bear market can do to retail sentiment.

Fiera Acquires Natixis Investment Managers

Saturday, September 14th, 2019

This is pretty old at this point and therefore a tad embarrassing to post, but …

Fiera Capital Corporation has announced (on 2019-7-3):

that it completed today the acquisition of all the issued and outstanding shares of Natixis Investment Managers Canada Corp. (“Natixis Corp”), the holding company of Natixis Investment Managers Canada LP (“Natixis LP”), acting as investment fund manager of publicly and privately distributed investment funds (the “Natixis Funds”).

Natixis LP is based in Toronto and the value of the assets of the Natixis Funds amount to approximately C$1.8 billion as at March 31, 2019. Natixis LP will continue to operate as a distinct legal entity from Fiera Capital and there are no immediate plans to change Natixis LP’s senior management team, the investment objectives of the Natixis Funds, increase the management fees or operating expenses paid by the Natixis Funds or change the role of Natixis LP as investment fund manager of the Natixis Funds. Natixis Corp, Natixis LP and the Natixis Funds will be rebranded as “Fiera Investments” in conjunction with closing.

The acquisition relates to the long-term strategic partnership between Fiera Capital and Natixis Investment Managers S.A. announced on May 9, 2019, establishing Fiera Capital as Natixis Investment Managers S.A.’s preferred Canadian distribution platform.

There is a document on SEDAR that I am not permitted to link to because the Canadian Securities Administrators believe that public documents shouldn’t be all that public, but it may be found by searching for “Fiera Canadian Preferred Share Class (formerly Natixis Canadian Preferred Share Class) Aug 30 2019 11:52:53 ET Notice PDF 389 K”, to the effect that, among other fund name changes, “Natixis Canadian Preferred Share Class” became “Fiera Canadian Preferred Share Class”.

PSF.UN Merged Into FPR

Saturday, November 5th, 2016

First Asset Investment Management Inc. has announced:

that the merger of Preferred Share Investment Trust (TSX: PSF.UN) (the “Fund”) with First Asset Preferred Share ETF (the “First Asset ETF”) (TSX: FPR) was implemented after the close of business on November 1, 2016.

In connection with the Merger, each issued and outstanding unit of the Fund received 0.29955 Unit of the First Asset ETF.

According to FPR’s investment objectives:

First Asset Preferred Share ETF’s investment objective is to provide unitholders with regular distributions; and the opportunity for capital appreciation from the performance of a portfolio comprised primarily of preferred shares of North American issuers. This actively managed portfolio will be comprised primarily of investment grade preferred shares and to a lesser extent investment grade corporate debt and convertible bonds. At least 75% of the Preferred Shares and Corporate Debt in the portfolio of FPR shall be rated investment grade at the end of every reporting period (June 30th and December 31st).

This has the very sad, unfortunate and most lamentable effect of suppressing the performance history of PSF.UN. As reported in the MAPF Performance: September 2016 report, as of September 30, 2016, the historical performance looked like this:

Figures for the First Asset Preferred Share Investment Trust (PSF.UN) are +0.11%, +2.45% and -1.67% for the past one, three and twelve months, respectively. The two-, three-, four- and five-year figures are -14.52%, -9.01%, -7.09% and -5.10%, respectively.

TXPL and Related Indices Discontinued

Friday, May 13th, 2016

When one checks the TXPL Index on the TMX website nowadays, the ‘overview’ section contains the following notice in large red letters:

This index has been discontinued effective April 29, 2016. Data displayed for this index is accurate as of the last trading day prior to discontinuation.

The same notice is displayed for the ‘year’ indices that provided data according to the term to reset of the various issues:

TXPL was developed in order to provide an index for BMO’s FixedReset ETF, ZPR, but this ETF hired a new index provider in October 2015. It would appear that those behind TXPL have been unsuccessful in finding a client to pay for the preparation of this index; or perhaps that there was a six-month notice period for cancellation of the contract.

I have not been able to find a formal announcement that goes beyond the bare bones on the TMX pages.

Jeff Herold, who manages NexGen Canadian Preferred Share Tax Managed Fund, comments:

As we move into May, we note the unmourned passing of the S&P/TSX Preferred Share Laddered Index. Created as a benchmark for the BMO S&P/TSX Laddered Preferred Share Index ETF, the index had no purpose once the ETF switched in October 2015 to a different index provided by Solactive. The switch allowed BMO to reduce expenses, have more frequent rebalancing, and simplify the ETF name to the BMO Laddered Preferred Share Index ETF. The changes just reinforce our conviction that bespoke indices created for unique ETF’s must be carefully evaluated for any informational value. Indices are generally not good prescriptions for how to invest, but can be used for clever marketing purposes.

TXPR / TXPL Rebalancing

Friday, January 15th, 2016

S&P Dow Jones Indices Canadian Index Operations has announced (on December 31, so this is rather late):

the following index changes as a result of the quarterly S&P/TSX Preferred Share Index and S&P/TSX Preferred Share Laddered Index Reviews. These changes will be effective at the open on Monday, January 18, 2016.

S&P/TSX PREFERRED SHARE INDEX – ADDITIONS
Symbol Issue Name CUSIP
ALA.PR.I ALTAGAS LTD. 5-YR RESET SERIES ‘I’ PR 021361 85 2
BAM.PF.H BROOKFIELD ASSET MANAGEMNT INC CL A PR SER 44 112585 48 4
BAM.PR.K BROOKFIELD ASSET MANAGEMNT INC CL A PR SER 13 112585 87 2
BCE.PR.Y BCE INC. 1ST PR SERIES ‘Y’ 05534B 85 1
BEP.PR.G BROOKFIELD RENEWABL ENGY PART LP A SR 7 PR UN G16258 13 2
BNS.PR.A BANK OF NOVA SCOTIA (THE) PR SERIES ’19’ 064149 73 5
BNS.PR.E BANK OF NOVA SCOTIA (THE) 5-YR NVCC PR SER 34 064149 55 2
BNS.PR.R BANK OF NOVA SCOTIA (THE)5-YR RESET PR SER 22 064149 69 3
EFN.PR.C ELEMENT FINANCIAL CORPORATION 6.5% PREF SERIES A 286181 83 9
EFN.PR.G ELEMENT FINANCIAL CORPORATION 6.5% PREF SERIES G 286181 78 9
FTS.PR.E FORTIS INC. 1ST PR SERIES ‘E’ 349553 80 0
GWO.PR.M GREAT-WEST LIFECO INC. 5.80% 1ST PR SERIES M 39138C 81 7
POW.PR.C POWER CORPORATION OF CANADA 5.80% SER ‘C’ PR 739239 87 9
PWF.PR.E POWER FINANCIAL CORP. SERIES ‘D’ 1ST PR 73927C 80 3
PWF.PR.I POWER FINANCIAL CORP. 6% SERIES ‘I’ 1ST PR 73927C 84 5
PWF.PR.L POWER FINANCIAL CORP. 5.10% SERIES ‘L’ 1ST PR 73927C 82 9
RY.PR.C ROYAL BANK OF CANADA 1ST PR SERIES ‘AC’ 780102 60 4
RY.PR.P ROYAL BANK OF CANADA 1ST PR NVCC SER ‘BJ’ 78013K 28 8
RY.PR.Q ROYAL BANK OF CANADA 5YR 1ST PR NVCC SER ‘BK’ 78013L 21 1
TD.PR.T TORONTO-DOMINION BANK(THE) FLTG RT PR SER T 891145 72 4
S&P/TSX PREFERRED SHARE LADDERED INDEX – ADDITIONS
Symbol Issue Name CUSIP
ALA.PR.I ALTAGAS LTD. 5-YR RESET SERIES ‘I’ PR 021361 85 2
BAM.PF.H BROOKFIELD ASSET MANAGEMNT INC CL A PR SER 44 112585 48 4
BEP.PR.G BROOKFIELD RENEWABL ENGY PART LP A SR 7 PR UN G16258 13 2
BIP.PR.B BROOKFIELD INFRASTRUCTURE PARTNR LP A PR SR 3 G16252 14 3
BNS.PR.E BANK OF NOVA SCOTIA (THE) 5-YR NVCC PR SER 34 064149 55 2
EFN.PR.A ELEMENT FINANCIAL CORPORATION 6.6% PR SER A 286181 87 0
EFN.PR.C ELEMENT FINANCIAL CORPORATION 6.5% PR SER A 286181 83 9
EFN.PR.E ELEMENT FINANCIAL CORPORATION 6.4% PR SER E 286181 81 3
EFN.PR.G ELEMENT FINANCIAL CORPORATION 6.50% PR SER G 286181 78 9
RY.PR.Q ROYAL BANK OF CANADA 5YR 1ST PR NVCC SER ‘BK’ 78013L 21 1

ZPR Hires New Benchmark Provider

Saturday, October 17th, 2015

Bank of Montreal has announced:

BMO Asset Management Inc. (BMO AM) today announced a change (ZPR Index Change) to the underlying index of BMO S&P/TSX Laddered Preferred Share Index ETF (Ticker: ZPR).

Currently, ZPR tracks the performance of the S&P/TSX Preferred Share Laddered Index. Effective on or about October 19, 2015, ZPR will start tracking the performance of the Solactive Canadian Preferred Share Index (Successor Index). An amendment to the offering documents of ZPR has been filed with the securities regulatory authorities, for which a receipt has been issued.

As a result of the ZPR Index Change, the current name of ZPR will change to BMO Laddered Preferred Share Index ETF.

In addition, the index provider will change to Solactive AG.The Solactive Canadian Preferred Share Index will provide investors with substantially the same exposure to the asset class to which ZPR is currently exposed. Since its creation in 2007, Solactive AG has become one of the key players in the indexing space. Solactive AG currently calculates indices for 175 clients in Europe, America and Asia with approximately USD$ 25 billion invested in products linked to its indices.

The ZPR Index Change is intended to provide investors of ZPR with substantially the same index exposure as the current index. The Successor Index aligns with the current investment objectives and strategy of ZPR. One notable but slight difference between the current index and Successor Index is the S&P/TSX Preferred Share Laddered Index is rebalanced on a quarterly basis while the Solactive Canadian Preferred Share Index is rebalanced on a monthly basis.

Solactive has been mentioned on PrefBlog once before, in connection with the now defunct CNPF:

The Solactive Canada Preferred Stock Index is admirably transparent. The indexing agent is Structured Solutions AG, which is based in Frankfurt. My, aren’t we getting international! They appear to do a lot of business with Global X, a New York based firm that has a hatful of thinly sliced ETFs.

The Solactive Laddered Canadian Preferred Share Index is similarly transparent making public a complete list of constituents together with the number of shares held in the index to six decimal places. Regrettably, they use Bloomberg symbols in their listing, presumably because brain-dead bank employees have no idea that information about anything is available anywhere else, but it’s no big deal. Hit yourself on the head with a hammer a few times, mumble something positive about ‘respect inna workplace’ and you’ll be able to translate the symbols to your preferred convention pretty easily. Mind you, there are no less than eight constituents with the symbol “ENBCN 4 12/31/49”, so you’ll have to do some guessing!

The Solactive Guideline describes index construction:

On each Adjustment Day each Index Component of the Solactive Laddered Canadian Preferred Share Index is weighted according to the Market Capitalization of the respective preferred share within the term buckets. The weights are capped twofold on a Selection day, whereas a cap on an issuer basis is applied of 12.5% per issuer on a selection day as well as a Cap of 20% per Maturity Bucket.

So the caps are a little higher than the 10% previously used.

“Solactive Laddered Canadian Preferred Share Index Universe” in respect of a Selection Day are instruments that fulfill the following criteria:
a) Defined as Preferred Share
b) Listed on the Toronto Stock Exchange
c) Incorporated in Canada
d) Trading in CAD
e) Only rate reset securities are eligible, which have rate reset dates frequency of five years or less
f) Floating Rate instruments are explicitly excluded
g) For instruments that are currently part of the Solactive Laddered Canadian Preferred Share Index a minimum Total Market capitalization of 50 m CAD. For instruments that are not part of the current composition of the Solactive Laddered Canadian Preferred Share Index a minimum Total Market capitalization of 100 m CAD is required
h) For instruments that are currently part of the Solactive Laddered Canadian Preferred Share Index a minimum Average daily value traded over the last 3 month of 50,000 CAD is required. For instruments that are not part of the current composition of the Solactive Laddered Canadian Preferred Share Index a minimum Average daily value traded over the last 3 month 100,000 CAD is required
i) Minimum ration of DBRS or S&P is P3 (low) or a minimum ration of Moodys above Baa3. If more than one of the rating agencies has issued a rating on the stock, the highest rating is used
j) Time to maturity of up to 6 years.

Looks like a bit of a rush job on the guideline. Ration?

Anyway, two of these elements confused me: first, I’m not sure what they mean by “Floating Rate instruments”. Does this include the BCE FixedFloaters and RatchetRates? (The answer is ‘no’; the constituent list includes “BCECN 3.11 12/31/49”, which is BCE.PR.F, a FixedFloater). Does it include FloatingResets? The term is not defined. Second, I am baffled by the stipulation that the Time to maturity is up to 6 years. The best guess I can come up with is that they mean Time to Next Exchange Date, which, since reset frequency is stipulated as being five years or less, means they just want to eliminate new issues with a long first-call-lockout-period.

There’s a bit of ambiguity in section “3.4 Dividends and other distributions” as well. The formula they provide makes sense if dividends are reinvested on the ex-date, but this is not made explicitly clear. This is not as pedantic a point as one might think: a lot of people simply can’t reinvest on the ex-date because they won’t get the money until a month later. Therefore, if they want to match the index exactly, they’ll have to borrow it and incur interest costs that will not be reflected in the index; this represents a bias against active managers. Not the biggest deal in the world, to be sure, but it’s there.

And finally we arrive at the interesting question of why BMO has changed index providers. It seems likely that Solactive is cheaper than S&P and it also seems likely that “BMO” is a much better name to use when selling a Canadian ETF than “S&P”. If I was running an index fund, I’d basically have to go with S&P to get the credibility, but BMO doesn’t have that problem. So, I’ll bet a nickel that part of the answer is short and sweet: it’s about the money.

A much more interesting possibility, however, is reporting vs. their benchmark. The fund is currently reporting its performance for past periods against the S&P index and detailed quantitative analysis by PrefBlog’s crack team of analysts has determined that performance, in absolute terms, since the inception date of Nov 14, 2012, has not been at levels that will help persuade granny to invest some of the old hard-earned. We also note from the guideline that:

The Index is based on 1000 at the close of trading on the start date, September 15th 2015

Historical figures have not been calculated and I’m not sure BMO would be allowed to use hypothetical, back-dated index calculations even if they were available. So while I have every confidence that BMO will comply with every jot, tittle and comma of the regulations regarding fund performance reporting, I also suspect that having a benchmark that only starts on September 15, 2015, will not only allow them to de-emphasize the results of the preceding three years, but that there is a pretty good chance that results measured from index inception are going to be pretty good.

TXPR & TXPL Index Revision, 14Q4

Friday, October 3rd, 2014

S&P Dow Jones Indices Canadian Index Operations has announced:

the following index changes as a result of the quarterly S&P/TSX Preferred Share Index and S&P/TSX Preferred Share Laddered Index Reviews. These changes will be effective at the open on Monday, October 20, 2014.

S&P/TSX Preferred Share Index [TXPR]
ADDITIONS
Symbol Issue Name CUSIP
ALA.PR.G ALTAGAS LTD. 5YR RESET SERIES ‘G’ PR 021361 88 6
AQN.PR.D ALGONQUIN POWER & UTILITIES CORP. SER ‘D’ PR 015857 50 1
BMO.PR.W BANK OF MONTREAL 5-YR RESET CL ‘B’ PR SER 31 063679 88 0
ENB.PF.E ENBRIDGE INC. PR SER ’13’ 29250N 57 6
ENB.PF.G ENBRIDGE INC. PR SER ’15’ 29250N 55 0
FTS.PR.M FORTIS INC. 1ST PR SERIES ‘M’ 349553 76 8
MFC.PR.M MANULIFE FINANCIAL CORP. CL 1 PR SER ’17’ 56501R 69 2
PPL.PR.G PEMBINA PIPELINE CORPORATION CL ‘A’ PR SER 7 706327 60 8
PWF.PR.H POWER FINANCIAL CORP. 5.75% SERIES ‘H’ 1ST PR 73927C 86 0
TA.PR.J TRANSALTA CORPORATION 1ST PR SER ‘G’
89346D 67 7
TD.PF.B TORONTO-DOMINION BANK(THE) CL ‘A’1ST PR SER 3 891145 67 4
DELETIONS
Symbol Issue Name CUSIP
BCE.PR.Y BCE INC. 1ST PR SERIES ‘Y’ 05534B 85 1
BPO.PR.H BROOKFIELD OFFICE PROP INC. CL AAA PR SER ‘H’ 112900 80 8
CCS.PR.C CO-OPERATORS GENERAL INSURANCE CO CL E PR ‘C’ 189906 40 7
CU.PR.D CANADIAN UTILITIES LIMITED 2ND PR SER ‘AA’ 136717 67 5
EMA.PR.E EMERA INCORPORATED PR SERIES ‘E’ 290876 70 5
NPI.PR.C NORTHLAND POWER INC. CUMLTV RST SERIES 3 PR 666511 60 5
REI.PR.C RIOCAN REAL ESTATE INVEST TR PR UNITS SER ‘C’ 766910 12 9
TD.PR.S TORONTO-DOMINION BANK (THE) 5-YR RESET PR S 891145 60 9

S&P/TSX Preferred Share Laddered Index [TXPL]
ADDITIONS
Symbol Issue Name CUSIP
ALA.PR.G ALTAGAS LTD. 5YR RESET SERIES ‘G’ PR 021361 88 6
AQN.PR.D ALGONQUIN POWER & UTILITIES CORP. SER ‘D’ PR 015857 50 1
BMO.PR.W BANK OF MONTREAL 5-YR RESET CL ‘B’ PR SER 31 063679 88 0
FTS.PR.M FORTIS INC. 1ST PR SERIES ‘M’ 349553 76 8
MFC.PR.M MANULIFE FINANCIAL CORP. CL 1 PR SER ’17’ 56501R 69 2
PPL.PR.G PEMBINA PIPELINE CORPORATION CL ‘A’ PR SER 7 706327 60 8
TA.PR.J TRANSALTA CORPORATION 1ST PR SER ‘G’ 89346D 67 7
TD.PF.B TORONTO-DOMINION BANK(THE) CL ‘A’1ST PR SER 3 891145 67 4

TXPR / TXPL Index Revision

Monday, July 7th, 2014

S&P Dow Jones Indices Canadian Index Operations has announced:

the following index changes as a result of the quarterly S&P/TSX Preferred Share Index and S&P/TSX Preferred Share Laddered Index Reviews. These changes will be effective at the open on Monday, July 21, 2014.

S&P/TSX Preferred Share Index

ADDITIONS
Symbol Issue Name CUSIP
BMO.PR.S Bank of Montreal 4.00% Class B Preferred Series 27 063679 40 1
BMO.PR.T Bank of Montreal 3.90% Class B Preferred Series 29 063679 60 9
BAM.PF.F Brookfield Asset Management Inc. 4.50% Class A Preferred Series 40 112585 53 4
CM.PR.O CIBC 3.90% Class A Preferred Series 39 136069 44 0
EMA.PR.F Emera Inc. 4.25% First Preferred Series F 290876 80 4
ENB.PF.C Enbridge Inc. 4.40% Preferred Series 11 29250N 59 2
GWO.PR.S Great-West Lifeco Inc. 5.25% First Preferred Series S 39138C 73 4
LB.PR.H Laurentian Bank of Canada 4.30% Class A Preferred Series 13 51925D 82 5
RY.PR.H Royal Bank of Canada 3.90% Preferred Series BB 78012H 56 7
TD.PF.A Toronto-Dominion Bank 3.90% Class A First Preferred Series 1 891145 69 0
DELETIONS
Symbol Issue Name CUSIP
AQN.PR.A Algonquin Power & Utilities Corp. 4.50% Preferred Series A 015857 30 3
BMO.PR.K Bank of Montreal 5.25% Class B Preferred Series 14 063671 14 3
BCE.PR.C BCE Inc. 3.55% First Preferred Series AC 05534B 78 6
BCE.PR.T BCE Inc. 3.39% First Preferred Series T 05534B 81 0
HSB.PR.D HSBC Bank Canada 5.00% Class 1 Preferred Series D 40427H 70 7
LB.PR.F Laurentian Bank of Canada 4.00% Class A Preferred Series 11 51925D 84 1

S&P/TSX Preferred Share Laddered Index

ADDITIONS
Symbol Issue Name CUSIP
BMO.PR.S Bank of Montreal 4.00% Class B Preferred Series 27 063679 40 1
BMO.PR.T Bank of Montreal 3.90% Class B Preferred Series 29 063679 60 9
BAM.PF.F Brookfield Asset Management Inc. 4.50% Class A Preferred Series 40 112585 53 4
CM.PR.O CIBC 3.90% Class A Preferred Series 39 136069 44 0
LB.PR.H Laurentian Bank of Canada 4.30% Class A Preferred Series 13 51925D 82 5
RY.PR.H Royal Bank of Canada 3.90% Preferred Series BB 78012H 56 7
TD.PF.A Toronto-Dominion Bank 3.90% Class A First Preferred Series 1 891145 69 0
DELETIONS
Symbol Issue Name CUSIP
BAM.PR.G Brookfield Asset Management Inc. 3.80% Class A Preferred Series 9 112585 60 9

It is interesting to see that BAM.PR.G will be deleted from TXPL. This issue is already dirt-cheap compared to its Strong Pair, BAM.PR.E, according to the calculator.

New S&P/TSX Preferred Share Sub-Indices?

Wednesday, March 26th, 2014

I was a little startled to find some new entries on the TMXMoney indices page:

S&P/TSX Preferred Share Current Year Laddered Index ^TXLC 954.15 -0.51 -0.05
S&P/TSX Preferred Share Year 1 Laddered Index ^TXL1 886.44 -0.72 -0.08
S&P/TSX Preferred Share Year 2 Laddered Index ^TXL2 872.91 -0.19 -0.02
S&P/TSX Preferred Share Year 3 Laddered Index ^TXL3 875.73 0.44 0.05
S&P/TSX Preferred Share Year 4 Laddered Index ^TXL4 948.92 0.37 0.04

Clicking the names provides the inclusion criteria – just as one would expect from the names, e.g.:

•Same as the S&P/TSX Preferred Share Laddered Index, except that preferred stocks are restricted to those with reset dates in the current calendar year.

The “methodology” and “fact sheet” buttons lead only to the TXPL methodology and fact sheet.

There are no references to these subindices on S&P’s TXPL web page.

Mr. Google knows nothing about these indices.

So it’s all very mysterious. I suspect that there’s a new ETF family in the works, now that ZPR has attracted $972-million in about sixteen months making every promoter in the country salivate while kicking themselves for not thinking of it first; and I’m sure that the Exchange doesn’t create these things on spec.

The other puzzle is: what useful purpose could these things serve? I would be more interested in a slicing of TXPL by credit quality (investment grade & junk) and Issue Reset Spread (so that the bands were, effectively, ‘likely call’, ‘likely extension’ and ‘maybe’, but I know nothing of sales techniques.