Preferred share funds can have very different characteristics; sometimes well explained by the issuer; sometimes less so. In this article I look at a few funds as they existed in 2010.
Look for the research link!
Research : Fund Comparison 2010
PrefBlog
Canadian Preferred Shares: Data and Discussion
Would love to see the rate call predictions from the assiduous crowd! Two hours to go . . . just about 100% consensus from the “professional analyst” market that it’s going to be a 75bp hike.
For a number of reasons, not the least of which is my belief that this particular expert group is usually dead wrong, I believe it’ll be 50bp, with a nice speech from Jerome later on, declaring that the Fed will “do whatever it takes” to reign in inflation, while being defensive about the possibility of creating a recessionary environment in the process.
Any calls, . . . with about 2 hours to go?!
75 bps. It is about optics and not data.
optics….hmmm….. so it’s more important to “look” like you’re doing something “big”, instead of doing something less big, but “correct”? Actually, I can see how the FOMC would use that logic! Probably why Jerome and his gang of mantra chanting President wannabees will indeed go with 75bp. Tiff will certainly follow suit in a few weeks as well.
People might want to look at the BoE’s position . . . they’re about to move rates as well, but probably only 25bp. The reason being given is that the UK is virtually in recession at this point already, and according to Boris . . he doesn’t want to see homeowners & prospective homebuyers being put in a position where they are disqualified from getting a mortgage.
Jerome & Tiff should pay attention to that situation . . . because a couple of 75bp hikes over here, and the housing “problem” becomes a housing “disaster”.
But I believe these guys are pretty smart. They wouldn’t be in these roles if they weren’t. Therefore, all the experts, and the market will be very surprised when they roll out a 50bp hike. (you heard it here first lol!)
It’s astounding that the entire ‘capitalistic’ world is at the mercy of a committee of academics deciding the cost of money or the speed of money printing.
omg . . . not only did they hike 75bp, but they essentially predicted “recession” as the inevitable result (without using that word) . . . I rescind my original statement about these guys being smart. They are not.
It’s astounding that the entire ‘capitalistic’ world is at the mercy of a committee of academics deciding the cost of money or the speed of money printing.
At their hearts, the most powerful organizations that exist consist of a finite number of fallible people talking to each other – Lois McMaster Bujold
Except for Tesla, . . . and the Government of the USA pre-Biden. In both of those cases it was one person, . . who talked a lot, but never listened to anyone!
i agree. they’re not very smart at all. they should have raised by 150 bpts today.then they could have claimed they were serious about inflation.
If they raised by 150bp, they could have claimed they were serious about engineering a depression, instead of the recession that now seems to be unavoidable. Inflation is going to seem pretty minor, . . . once these consequences take hold.
Nice article! As the head of a mutual fund dealer since 1996 and an “advisor” since 1981 I have often researched the limited and changing supply of mutual funds that specialize in preferred shares that are available over time and have come to the same conclusion. As you know, mutual funds need assets to become profitable and preferred shares still have an unwarranted stigma attached to them that limits their shelf appeal. I have stared into the eyes of some of the managers of the largest fixed income funds in Canada and asked them why they don’t hold any preferred shares. The reply is almost always a blank stare.
Dan . . . look at what’s happening to prefs in the market today . . . and compare that to the almost unchanged bond yields across the board, at this point.
Add minimal liquidity to the deal . . . and I think you have your answer!
(Do you really stare into their eyes when you ask them questions like that? . . . very dramatic meetings, I guess!)
recessions are good. depressions are better.
those are great times to buy cheap assets.
. . . and to see how you look in a fedora *lol*
Dan, there’re too many doubting Thomases in this world. Some 20 yrs ago, we’re calling on a senior officer at one of the largest pension funds in Canada. After a while when he got more comfortable, he asked us once in all seriousness .. what does it mean to be short. And no, there was no staring into the eyes.
Joe…did you tell him it usually means he won’t get the girl? *rotflmao*
Well, someone here ain’t getting any with all this talk about staring into their eyes, drama, and of course a fedora *lol*
You’re probably right, Joe! But I have reasonable standards . . . I’m just looking for a girl who invested in prefs, and hasn’t lost any account value! *sigh* . . . it could be a lengthy search *lol*
[…] The 2010 comparison is available via THIS LINK. […]