{"id":26435,"date":"2014-10-02T01:18:57","date_gmt":"2014-10-02T06:18:57","guid":{"rendered":"http:\/\/prefblog.com\/?p=26435"},"modified":"2014-10-02T01:18:57","modified_gmt":"2014-10-02T06:18:57","slug":"october-1-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=26435","title":{"rendered":"October 1, 2014"},"content":{"rendered":"

PIMCo doesn’t love us any more<\/a>:<\/p>\n

Pacific Investment Management Co.\u2019s Total Return ETF slashed its holdings of Canadian debt to 2.1 percent from 9.2 percent in the five days ending yesterday, according to data compiled by Bloomberg.<\/p>\n

The $3 billion exchange-traded fund, which follows a similar investment strategy as Newport Beach, California-based Pimco\u2019s flagship $222 billion mutual fund, was run by co-founder Bill Gross before his sudden departure on Sept. 26.<\/p>\n

Pimco has less invested in Canada than benchmarks recommend, said Ed Devlin, who oversees $17 billion, including the Canadian portfolios, for Pimco. He said he prefers markets such as Mexico.<\/p>\n

\u201cWe still think Canada is a relatively unattractive market when we look at rates around the world,\u201d Devlin said at the Bloomberg Canadian Fixed-Income Conference in New York yesterday. \u201cOther markets are much more attractive.\u201d<\/p>\n

Devlin noted the yield on the Canadian 10-year bond, at about 2.1 percent, is in line with inflation. \u201cWhat\u2019s fun about that? Not much,\u201d he said.<\/p><\/blockquote>\n

Equities started the quarter on the wrong foot<\/a>:<\/p>\n

The Standard & Poor\u2019s\/TSX Composite Index (SPTSX) fell 155.07 points, or 1 percent, to 14,805.44 at 4 p.m. in Toronto, retreating for a third straight day. The index lost 4.3 percent in September, the most since May 2012, and fell 1.2 percent in the third quarter.<\/p>\n

U.S. stocks tumbled today amid concern over economic growth in Europe and geopolitical turmoil as the Federal Reserve prepares to end its bond-buying program. The Russell 2000 Index (RTY) dropped more than 10 percent from a record reached in March, meeting the common definition of a correction.<\/p>\n

Equities fell as Italy cut its growth forecast, German manufacturing shrank and euro-area factories lowered prices in September by the most in more than a year. The weakness underlined the mounting challenge facing policy makers before the European Central Bank meets tomorrow.<\/p><\/blockquote>\n

… but bonds were on fire<\/a>!<\/p>\n

Treasuries gained the most in more than eight months as yields higher relative to most Group of Seven nations increased demand from investors worldwide concerned global growth is stalling.<\/p>\n

Benchmark 10-year notes yielded almost the most versus their German counterparts since 1999 after the dollar touched a two-year high versus the euro yesterday. The European Central Bank may detail its plan to buy asset-backed securities tomorrow amid slowdowns in Germany in France. Stocks tumbled, pushing the Russell 2000 Index into a correction, and bolstering the haven appeal of U.S. government securities.
…<\/b>
The U.S. 10-year yield fell 10 basis points, or 0.10 percentage point, to 2.39 percent as of 5 p.m. in New York, according to Bloomberg Bond Trader data. It\u2019s the biggest drop since Jan. 23. The 2.375 percent security rose 29\/32, or $9.06 per $1,000 face amount, to 99 28\/32.<\/p>\n

U.S. 10-year notes yielded 1.48 percentage points more than their German counterparts after reaching 1.57 on Sept. 17, the most since June 1999. They were 1.85 percentage points higher than those of Japanese peers, up from 0.63 percentage point in May 2012.<\/p><\/blockquote>\n

Meanwhile, for you brokers out there worrying about clients leaving you after a not very exciting quarter … PIMCo feels your pain<\/a>:<\/p>\n

Pimco CEO Douglas Hodge said this week during a conference call that the firm is expecting and is ready for client redemptions. Pimco could see withdrawals of 10 percent to 30 percent, Sanford Bernstein said in a report. Pimco has not disclosed how much money has left the firm since Gross\u2019s departure.<\/p>\n

Investors yanked a record $446.5 million from Pimco\u2019s $2.9 billion Total Return ETF after Gross\u2019 departure from the firm on Sept. 26., before slowing redemptions to $98 million on Sept. 29 and $87 million yesterday. The exchange-traded fund follows a similar investment strategy as the Pimco Total Return mutual fund.<\/p>\n

Pimco\u2019s largest competitors had already been benefiting this year as investors have moved away from the firm\u2019s Total Return into top-performing rivals as well as flexible funds that can protect from rising interest rates. Pimco\u2019s Total Return Fund has lagged behind competitors this year, trailing 62 percent of its peers, according to data compiled by Bloomberg.<\/p><\/blockquote>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts down 16bp, FixedResets gaining 1bp and DeemedRetractibles up 6bp. Volatility was minimal. Volume was low.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n1<\/td>\n0.0962 %<\/td>\n2,682.6<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0962 %<\/td>\n4,131.3<\/td>\n<\/tr>\n
Floater<\/td>\n2.88 %<\/td>\n3.02 %<\/td>\n61,331<\/td>\n19.71<\/td>\n4<\/td>\n0.0962 %<\/td>\n2,774.0<\/td>\n<\/tr>\n
OpRet<\/td>\n4.05 %<\/td>\n2.80 %<\/td>\n101,337<\/td>\n0.08<\/td>\n1<\/td>\n-0.0395 %<\/td>\n2,728.2<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.30 %<\/td>\n3.85 %<\/td>\n96,747<\/td>\n3.87<\/td>\n5<\/td>\n-0.3496 %<\/td>\n3,150.6<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0395 %<\/td>\n2,494.6<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.47 %<\/td>\n1.25 %<\/td>\n73,032<\/td>\n0.08<\/td>\n18<\/td>\n0.0656 %<\/td>\n2,445.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.33 %<\/td>\n5.17 %<\/td>\n101,991<\/td>\n15.10<\/td>\n18<\/td>\n-0.1552 %<\/td>\n2,585.8<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.21 %<\/td>\n3.75 %<\/td>\n179,926<\/td>\n8.62<\/td>\n73<\/td>\n0.0134 %<\/td>\n2,556.1<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.00 %<\/td>\n2.21 %<\/td>\n103,894<\/td>\n0.25<\/td>\n42<\/td>\n0.0647 %<\/td>\n2,563.2<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.56 %<\/td>\n-7.01 %<\/td>\n79,076<\/td>\n0.08<\/td>\n6<\/td>\n0.0260 %<\/td>\n2,541.8<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
BAM.PF.B<\/td>\nFixedReset<\/td>\n-1.43 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.13
\nEvaluated at bid price : 24.80
\nBid-YTW : 4.17 %<\/td>\n<\/tr>\n
ELF.PR.G<\/td>\nPerpetual-Discount<\/td>\n-1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 21.63
\nEvaluated at bid price : 21.63
\nBid-YTW : 5.51 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
BMO.PR.T<\/td>\nFixedReset<\/td>\n115,350<\/td>\nRBC crossed 50,000 at 25.30 and crossed 20,200 at the same price.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.27
\nEvaluated at bid price : 25.32
\nBid-YTW : 3.75 %<\/td>\n<\/tr>\n
BMO.PR.W<\/td>\nFixedReset<\/td>\n108,300<\/td>\nScotia crossed 16,200 at 25.07 and 50,000 at 25.10.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.18
\nEvaluated at bid price : 25.08
\nBid-YTW : 3.72 %<\/td>\n<\/tr>\n
TD.PR.O<\/td>\nDeemed-Retractible<\/td>\n97,641<\/td>\nCalled for redemption October 31<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.27
\nBid-YTW : 1.71 %<\/td>\n<\/tr>\n
FTS.PR.M<\/td>\nFixedReset<\/td>\n95,523<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.22
\nEvaluated at bid price : 25.21
\nBid-YTW : 3.95 %<\/td>\n<\/tr>\n
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n85,610<\/td>\nNesbitt crossed blocks of 50,000 and 30,000, both at 26.30.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-31
\nMaturity Price : 25.75
\nEvaluated at bid price : 26.27
\nBid-YTW : -7.64 %<\/td>\n<\/tr>\n
TD.PF.B<\/td>\nFixedReset<\/td>\n71,036<\/td>\nScotia crossed two blocks of 30,000 each, both at 25.12.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.21
\nEvaluated at bid price : 25.10
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n
There were 21 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
FTS.PR.H<\/td>\nFixedReset<\/td>\nQuote: 20.79 – 21.24
\nSpot Rate : 0.4500
\nAverage : 0.3169<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 20.79
\nEvaluated at bid price : 20.79
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n

NA.PR.Q<\/td>\nFixedReset<\/td>\nQuote: 25.91 – 26.25
\nSpot Rate : 0.3400
\nAverage : 0.2261<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-11-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.91
\nBid-YTW : 2.75 %<\/td>\n<\/tr>\n

BAM.PR.E<\/td>\n<\/td>\nQuote: 24.10 – 24.48
\nSpot Rate : 0.3800
\nAverage : 0.2710<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 23.80
\nEvaluated at bid price : 24.10
\nBid-YTW : 3.10 %<\/td>\n<\/tr>\n

TRP.PR.A<\/td>\nFixedReset<\/td>\nQuote: 22.45 – 22.68
\nSpot Rate : 0.2300
\nAverage : 0.1436<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-01
\nMaturity Price : 21.93
\nEvaluated at bid price : 22.45
\nBid-YTW : 3.93 %<\/td>\n<\/tr>\n

GWO.PR.M<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.33 – 26.59
\nSpot Rate : 0.2600
\nAverage : 0.1745<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-03-31
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.33
\nBid-YTW : 3.08 %<\/td>\n<\/tr>\n

CGI.PR.D<\/td>\nSplitShare<\/td>\nQuote: 25.06 – 25.30
\nSpot Rate : 0.2400
\nAverage : 0.1645<\/p>\n

YTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2023-06-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.06
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

PIMCo doesn’t love us any more: Pacific Investment Management Co.\u2019s Total Return ETF slashed its holdings of Canadian debt to 2.1 percent from 9.2 percent in the five days ending yesterday, according to data compiled …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-26435","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/26435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26435"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/26435\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}