{"id":734,"date":"2007-04-04T23:34:53","date_gmt":"2007-04-05T03:34:53","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=734"},"modified":"2007-04-04T23:34:53","modified_gmt":"2007-04-05T03:34:53","slug":"sp-canadian-preferred-index-to-launch-shortly","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=734","title":{"rendered":"S&P Canadian Preferred Index to Launch Shortly"},"content":{"rendered":"

According to the Globe & Mail<\/a>:<\/p>\n

Standard & Poor’s Corp. plans to start a new Canadian preferred share index comprised of 52 different issues with a total market capitalization of $14.1-billion….\u00a0<\/p>\n

The new index will include all types of investment-grade preferred shares.<\/p>\n

It is expected that an exchange-traded fund will be created to allow yield-oriented investors to trade or invest in the index, Mr. North said.<\/p><\/blockquote>\n

Presumably this is the index planned for the Claymore ETF<\/a> but I cannot find confirmation of this speculation. I’ll bet a nickel on it, though!<\/p>\n

This should be good for the market – it will bring in new investors and create inefficiencies that will reward informed active management.<\/p>\n

Update & Bump<\/strong>: The actual press release – not the Globe & Mail rewrite – is on the S&P Website<\/a> – the “Index News” page, press release of April 3, 2007.<\/p>\n

This index has actually been developed for the TSX<\/a>. Whether or not Claymore intends to use this index rather than a proprietary one is not addressed, but I’ll be willing to bet – here goes another nickel! – that they do.<\/p>\n

Index performance is listed as<\/p>\n

\n\n\n\n\n
One Year<\/td>\n4.71%<\/td>\n<\/tr>\n
Two Years<\/td>\n3.95%<\/td>\n<\/tr>\n
Three Years<\/td>\n3.85%<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

I know perfectly well that the above table does not make clear just what exactly the end-date of the periods is. Sue me. I suspect that the period end-dates are 2\/28, but the press release does not make this entirely clear.<\/p>\n

Regardless, it’s apparent that the index construction is very different from the BMO NB-50, since one-year and two-year figures are wildly different. The three year, though, is roughly more or less sort of equivalent, kinda.<\/p>\n

This construction difference is apparent from the release. The top three constituents are GWO.PR.X, BCE.PR.A and BCE.PR.C. You know what I like? I like indices that are easy to beat, that’s what I like. I\u00a0might even\u00a0be able to\u00a0earn my fees just by avoiding those things and closet indexing the rest of the portfolio!<\/p>\n

Update, 2008-6-30<\/b>: The last paragraph was referenced by Larry MacDonald in Canadian Business Online<\/a>, April 12, 2007. Well … I did<\/i> beat the index in year to March 31, 2008 … but it wasn’t due to simple avoidance of those issues! The prolonged bear market in preferreds continues<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

According to the Globe & Mail: Standard & Poor’s Corp. plans to start a new Canadian preferred share index comprised of 52 different issues with a total market capitalization of $14.1-billion….\u00a0 The new index will …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-734","post","type-post","status-publish","format-standard","hentry","category-miscellaneous-news"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/734","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=734"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/734\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}