Bloomberg has an article detailing the importance of going to the right school.
The Globe & Mail today features some of the more unusual investment advice I’ve seen recently:
While the couple pay a low-cost annual fee for management of their investments, [Raymond James advisor] Ms. [Patti] Dolan says they are not reaping any benefit from this arrangement. “From my review of the statements it appears the accounts are being charged a 1-per-cent management fee – for what?” she asks. “The concept of paying a percentage of assets is to lower commission costs.” Their account shows little activity in recent months, and it’s clear that most of the past activity has only served to hurt their financial position. “If you are paying a fee, no matter if you are making or losing money, there should be activity in the account to justify the money the adviser is receiving.”
Um … no. You pay asset-based fees in order to disengage trading activity from portfolio management. Sometimes the smartest thing to do is nothing. Secondarily, in a AUM-based fee situation, the advisor’s financial interest is somewhat better aligned with that of the client’s.
Utility Split Trust, proud issuer of UST.PR.B, was confirmed at Pfd-2(low) by DBRS.
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 4bp, FixedResets up 11bp and DeemedRetractibles off 1bp. The Performance Highlights table was lengthier than might be expected, but with no clear pattern. Volume was above average.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2274 % | 2,510.2 |
| FixedFloater | 4.63 % | 3.93 % | 38,337 | 17.52 | 1 | -1.2042 % | 3,623.8 |
| Floater | 2.98 % | 2.97 % | 59,412 | 19.79 | 3 | 0.2274 % | 2,710.3 |
| OpRet | 4.64 % | 2.06 % | 88,225 | 0.43 | 3 | -0.0387 % | 2,660.2 |
| SplitShare | 4.87 % | 4.71 % | 79,080 | 4.48 | 5 | 0.2501 % | 3,005.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0387 % | 2,432.4 |
| Perpetual-Premium | 5.63 % | 5.43 % | 138,412 | 4.28 | 13 | 0.0984 % | 2,307.4 |
| Perpetual-Discount | 5.71 % | 5.70 % | 188,618 | 14.37 | 25 | 0.0435 % | 2,311.8 |
| FixedReset | 5.00 % | 3.53 % | 239,102 | 3.47 | 84 | 0.1108 % | 2,466.8 |
| Deemed-Retractible | 5.16 % | 4.26 % | 206,700 | 1.36 | 42 | -0.0108 % | 2,388.4 |
| FloatingReset | 2.61 % | 2.38 % | 289,274 | 4.38 | 5 | -0.1028 % | 2,462.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| POW.PR.D | Perpetual-Discount | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 21.86 Evaluated at bid price : 22.17 Bid-YTW : 5.64 % |
| BAM.PR.G | FixedFloater | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 21.37 Evaluated at bid price : 20.51 Bid-YTW : 3.93 % |
| BAM.PR.M | Perpetual-Discount | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 18.57 Evaluated at bid price : 18.57 Bid-YTW : 6.44 % |
| TRP.PR.C | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 21.29 Evaluated at bid price : 21.29 Bid-YTW : 4.18 % |
| GWO.PR.H | Deemed-Retractible | -1.00 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.73 Bid-YTW : 6.55 % |
| CM.PR.E | Perpetual-Premium | 1.03 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-22 Maturity Price : 25.00 Evaluated at bid price : 25.22 Bid-YTW : -11.80 % |
| W.PR.H | Perpetual-Discount | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 24.25 Evaluated at bid price : 24.55 Bid-YTW : 5.70 % |
| TRP.PR.A | FixedReset | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 22.95 Evaluated at bid price : 23.50 Bid-YTW : 4.04 % |
| BAM.PF.D | Perpetual-Discount | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 19.45 Evaluated at bid price : 19.45 Bid-YTW : 6.34 % |
| MFC.PR.K | FixedReset | 1.19 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-09-19 Maturity Price : 25.00 Evaluated at bid price : 24.74 Bid-YTW : 4.07 % |
| BNS.PR.Y | FixedReset | 1.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.82 Bid-YTW : 3.82 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BAM.PF.D | Perpetual-Discount | 59,670 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 19.45 Evaluated at bid price : 19.45 Bid-YTW : 6.34 % |
| TRP.PR.B | FixedReset | 59,371 | Nesbitt crossed 25,000 at 20.30. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 20.30 Evaluated at bid price : 20.30 Bid-YTW : 3.96 % |
| BAM.PF.C | Perpetual-Discount | 53,295 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 19.14 Evaluated at bid price : 19.14 Bid-YTW : 6.38 % |
| TD.PR.T | FloatingReset | 44,069 | Nesbitt crossed 35,000 at 25.17. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.09 Bid-YTW : 2.38 % |
| PWF.PR.S | Perpetual-Discount | 42,496 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 21.30 Evaluated at bid price : 21.60 Bid-YTW : 5.63 % |
| BAM.PR.N | Perpetual-Discount | 38,455 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-23 Maturity Price : 18.57 Evaluated at bid price : 18.57 Bid-YTW : 6.44 % |
| There were 43 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.C | FixedReset | Quote: 21.29 – 21.82 Spot Rate : 0.5300 Average : 0.3734 YTW SCENARIO |
| ENB.PR.T | FixedReset | Quote: 23.33 – 23.57 Spot Rate : 0.2400 Average : 0.1516 YTW SCENARIO |
| GCS.PR.A | SplitShare | Quote: 25.02 – 25.28 Spot Rate : 0.2600 Average : 0.1765 YTW SCENARIO |
| PWF.PR.P | FixedReset | Quote: 22.75 – 23.09 Spot Rate : 0.3400 Average : 0.2612 YTW SCENARIO |
| FTS.PR.F | Perpetual-Discount | Quote: 22.10 – 22.50 Spot Rate : 0.4000 Average : 0.3239 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 20.51 – 20.87 Spot Rate : 0.3600 Average : 0.2859 YTW SCENARIO |