PerpetualDiscounts now yield 5.57%, equivalent to 7.24% interest at the standard equivalency factor of 1.3x. Long corporates now yield 3.37%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now 385bp, equal to that reported on June 26.
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 | 0.0223 % | 1,934.3 |
FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0223 % | 3,549.3 |
Floater | 6.16 % | 6.33 % | 36,904 | 13.46 | 4 | 0.0223 % | 2,045.5 |
OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0284 % | 3,322.2 |
SplitShare | 4.69 % | 4.71 % | 84,835 | 4.18 | 7 | -0.0284 % | 3,967.4 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0284 % | 3,095.5 |
Perpetual-Premium | 5.59 % | -12.03 % | 65,542 | 0.09 | 7 | 0.2017 % | 2,962.5 |
Perpetual-Discount | 5.47 % | 5.57 % | 60,845 | 14.51 | 25 | 0.2477 % | 3,098.1 |
FixedReset Disc | 5.43 % | 5.32 % | 174,425 | 14.90 | 69 | 0.3225 % | 2,112.1 |
Deemed-Retractible | 5.25 % | 5.97 % | 75,838 | 8.01 | 27 | 0.2386 % | 3,096.1 |
FloatingReset | 4.06 % | 4.31 % | 48,603 | 2.49 | 4 | 0.2780 % | 2,351.8 |
FixedReset Prem | 5.12 % | 3.70 % | 177,201 | 1.96 | 17 | 0.0663 % | 2,593.3 |
FixedReset Bank Non | 1.98 % | 4.00 % | 126,369 | 2.50 | 3 | 0.1114 % | 2,654.6 |
FixedReset Ins Non | 5.30 % | 7.45 % | 89,893 | 8.08 | 22 | 0.2581 % | 2,145.1 |
Performance Highlights | |||
Issue | Index | Change | Notes |
CCS.PR.C | Deemed-Retractible | -3.12 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.98 Bid-YTW : 6.09 % |
GWO.PR.N | FixedReset Ins Non | -2.44 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.00 Bid-YTW : 9.23 % |
HSE.PR.A | FixedReset Disc | -1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 12.50 Evaluated at bid price : 12.50 Bid-YTW : 6.15 % |
BAM.PR.C | Floater | -1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 10.95 Evaluated at bid price : 10.95 Bid-YTW : 6.37 % |
IAF.PR.B | Deemed-Retractible | -1.33 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.58 Bid-YTW : 6.44 % |
MFC.PR.L | FixedReset Ins Non | 1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.77 Bid-YTW : 8.38 % |
BMO.PR.C | FixedReset Disc | 1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 22.26 Evaluated at bid price : 22.70 Bid-YTW : 5.22 % |
TRP.PR.G | FixedReset Disc | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 18.16 Evaluated at bid price : 18.16 Bid-YTW : 6.03 % |
MFC.PR.F | FixedReset Ins Non | 1.35 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.50 Bid-YTW : 9.78 % |
BIP.PR.A | FixedReset Disc | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 19.11 Evaluated at bid price : 19.11 Bid-YTW : 6.52 % |
GWO.PR.S | Deemed-Retractible | 1.38 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.25 Bid-YTW : 5.67 % |
RY.PR.W | Perpetual-Discount | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 24.60 Evaluated at bid price : 24.85 Bid-YTW : 4.98 % |
BAM.PF.B | FixedReset Disc | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 6.00 % |
NA.PR.S | FixedReset Disc | 1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 17.87 Evaluated at bid price : 17.87 Bid-YTW : 5.50 % |
TRP.PR.A | FixedReset Disc | 1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 13.95 Evaluated at bid price : 13.95 Bid-YTW : 6.01 % |
IFC.PR.E | Deemed-Retractible | 1.50 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.75 Bid-YTW : 5.88 % |
BMO.PR.Y | FixedReset Disc | 1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 19.54 Evaluated at bid price : 19.54 Bid-YTW : 5.32 % |
TRP.PR.C | FixedReset Disc | 1.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 12.28 Evaluated at bid price : 12.28 Bid-YTW : 5.90 % |
BAM.PR.B | Floater | 1.94 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 11.01 Evaluated at bid price : 11.01 Bid-YTW : 6.33 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
TD.PF.G | FixedReset Prem | 157,625 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 3.65 % |
TD.PF.K | FixedReset Disc | 81,450 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 20.58 Evaluated at bid price : 20.58 Bid-YTW : 5.18 % |
HSE.PR.A | FixedReset Disc | 67,743 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 12.50 Evaluated at bid price : 12.50 Bid-YTW : 6.15 % |
BIP.PR.F | FixedReset Disc | 54,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 21.32 Evaluated at bid price : 21.60 Bid-YTW : 5.93 % |
NA.PR.S | FixedReset Disc | 50,142 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 17.87 Evaluated at bid price : 17.87 Bid-YTW : 5.50 % |
BMO.PR.Y | FixedReset Disc | 43,720 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-03 Maturity Price : 19.54 Evaluated at bid price : 19.54 Bid-YTW : 5.32 % |
There were 23 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
BAM.PF.E | FixedReset Disc | Quote: 16.12 – 16.88 Spot Rate : 0.7600 Average : 0.4687 YTW SCENARIO |
CM.PR.P | FixedReset Disc | Quote: 16.81 – 17.59 Spot Rate : 0.7800 Average : 0.5454 YTW SCENARIO |
MFC.PR.K | FixedReset Ins Non | Quote: 18.28 – 18.70 Spot Rate : 0.4200 Average : 0.2685 YTW SCENARIO |
MFC.PR.H | FixedReset Ins Non | Quote: 20.45 – 20.87 Spot Rate : 0.4200 Average : 0.2796 YTW SCENARIO |
IFC.PR.F | Deemed-Retractible | Quote: 24.01 – 24.33 Spot Rate : 0.3200 Average : 0.2271 YTW SCENARIO |
CU.PR.C | FixedReset Disc | Quote: 17.74 – 18.00 Spot Rate : 0.2600 Average : 0.1674 YTW SCENARIO |
What are your thoughts on this article in the Globe and Mail about preferred shares, entitled “ This is the worst bond alternative ever: With interest rates shrinking, you need to steer clear of this investment option.”
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-this-is-the-worst-bond-alternative-ever/#comments
@kirok, to label Carrick a putz would be doing a disservice to putzes
Hope that the weak hands listen to him and sell their cheap prefs to me!
he has to write about something. just an opinion. what can you do?
What are your thoughts on this article in the Globe and Mail about preferred shares, entitled “ This is the worst bond alternative ever: With interest rates shrinking, you need to steer clear of this investment option.”
My major argument is that it’s one-sided and therefore simplistic.
As far as not being bond substitutes – sure. They’re fixed-income, by my definition, but they’re not bonds. Long, long ago, in a piece titled Preferreds or Common, I remarked:
The article points out the high volatility of preferred shares, but neglects to investigate two questions:
Volatility is not the same thing as risk at all times for all people. As I have pointed out before (risk should be considered as ‘the probability that the portfolio will not achieve its aims’ and therefore:
Until I can convince the world to adopt my definition of investment risk, however, it is clear that volatility (which is closely aligned with retail’s pathological fear of capital losses) will continue to scare people away from the market. Good. That makes the liquidity premium (the amount you get paid for nothing more than being calm) nice and big.
Happiness is a huge liquidity premium.