Opinions
Paul Tepsich
BMO S&P/TSX Laddered Preferred
ZPR-T
PARTIAL SELL
Apr 25, 2016
$9.860
Stock price when the opinion was issued
E.T.F.'s
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BUY
Has short duration preferred shares. Also has rate reset features. If you think we will see rising rates, which is a good assumption, then they will ratchet their rates up to keep up with rising interest rates. These are not government bonds, and there is some risk. However, with 4% dividend rates, there is an attraction there. If rates rise, it does participate and offset some inflation.
E.T.F.'s
TOP PICK
Stockchase Research Editor: Michael O’Reilly A Canadian preferred share ETF that is laddered up to five years managed by BMO. This includes rate resets that benefit from rising interest rates. It has a low MER of 0.5% and an attractive yield. Preferred shares have generally been under pressure as interest rates have gone up, so this is a good entry point. We recommend setting a stop loss at $8.40, looking to achieve $10.75 – upside potential of 13%.
E.T.F.'s
TOP PICK
Stockchase Research Editor: Michael O'Reilly
We reiterate this Canadian preferred share ETF as a TOP PICK. Preferred shares have generally been under pressure as interest rates have gone up, so this is a good entry point. It has a low MER of 0.5% and an attractive yield. We continue to recommend a stop loss at $8.40, looking to achieve $10.75 – upside potential of 19%. Yield 6.0%
E.T.F.'s
TOP PICK
Stockchase Research Editor: Michael O’Reilly
We again reiterate this Canadian preferred share ETF as a TOP PICK. Preferred shares have generally been under pressure as interest rates have gone up. As interest rates stall and eventually turn lower to long term averages, this has significant upside potential. It has a low MER of 0.5% and an attractive yield. We continue to recommend a stop at $8.40, looking to achieve $10.75 – upside potential of 19%. Yield 6.0%
E.T.F.'s
PAST TOP PICK
(A Top Pick Jul 25/23, Down 5.4%)Stockchase Research Editor: Michael O'Reilly
Our PAST TOP PICK with ZPR has triggered its stop at $8.40. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 9%, when combined with our previous recommendations.
E.T.F.'s
Lost 28% in this. Sell or Hold? Last year the preferred market was down. This should not be a large part of your fixed income portion, and you should take some off the table, and reapportionment into a traditional fixed income security such as government or corporate bonds.