BMO S&P/TSX Laddered Preferred

ZPR-T

Analysis and Opinions about ZPR-T

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
April 8, 2020
It is a rate reset ETF of preferred shares. As interest rates have fallen to probably the lowest level, the yields are pretty good. He would prefer to sell calls against the banks, collecting the dividend along the way. He is not a fan of preferreds.
Show full opinionHide full opinion
It is a rate reset ETF of preferred shares. As interest rates have fallen to probably the lowest level, the yields are pretty good. He would prefer to sell calls against the banks, collecting the dividend along the way. He is not a fan of preferreds.
COMMENT
COMMENT
March 25, 2020
Preferred shares? This is indicative of high yield investments that act as equity when the market is under duress. ZPR is an example that is down 35% for the year. The global bailouts amount to $12 trillion and this is driving interest rates down to zero. Rate resets that use these long term rates to set the dividend will cause them to fall in value.
Show full opinionHide full opinion
Preferred shares? This is indicative of high yield investments that act as equity when the market is under duress. ZPR is an example that is down 35% for the year. The global bailouts amount to $12 trillion and this is driving interest rates down to zero. Rate resets that use these long term rates to set the dividend will cause them to fall in value.
COMMENT
COMMENT
May 27, 2019
A lot of the preferreds have moved to reset preferreds. Preferreds are not as defensive as they were historically. They are not as low risk as people traditionally think.
Show full opinionHide full opinion
A lot of the preferreds have moved to reset preferreds. Preferreds are not as defensive as they were historically. They are not as low risk as people traditionally think.
COMMENT
COMMENT
May 9, 2019
Many people are looking for income. This pays a 6% yield. (See his top picks later.)
Show full opinionHide full opinion
Many people are looking for income. This pays a 6% yield. (See his top picks later.)
COMMENT
COMMENT
April 2, 2019
Good ETF. Interest rates going down affects it as many of the underlying are rate resets. He doesn't like preferreds that much in the sense that you get return of a bond with a risk of stocks. He prefers capital growth.
Show full opinionHide full opinion
Good ETF. Interest rates going down affects it as many of the underlying are rate resets. He doesn't like preferreds that much in the sense that you get return of a bond with a risk of stocks. He prefers capital growth.
HOLD
HOLD
January 2, 2019
He likes this and ZPR-T, but in general is not a big fan of preferred shares as he feels they have the yield of bonds and the risk of stocks. He holds it as a partial position, but does not view it as a good place to park cash. The yield on HPR-T is over 4%.
Show full opinionHide full opinion
He likes this and ZPR-T, but in general is not a big fan of preferred shares as he feels they have the yield of bonds and the risk of stocks. He holds it as a partial position, but does not view it as a good place to park cash. The yield on HPR-T is over 4%.
BUY
BUY
November 19, 2018
ZPR-T vs. ZWC-T vs. ZWU-T. He likes ZWU-T and ZWC-T for the covered calls. ZPR-T is reset preferreds. They reset. There is an expectation that BOC will be less aggressive with interest rates so we are seeing pressure on these. The lower it gets the more he likes it. He feels it will appreciate next year.
Show full opinionHide full opinion
ZPR-T vs. ZWC-T vs. ZWU-T. He likes ZWU-T and ZWC-T for the covered calls. ZPR-T is reset preferreds. They reset. There is an expectation that BOC will be less aggressive with interest rates so we are seeing pressure on these. The lower it gets the more he likes it. He feels it will appreciate next year.
BUY
BUY
September 24, 2018

There used to be perpetual preferreds that did poorly when bonds went up. He does not see a lot of growth here. He has been trading it. He trades a range. He prefers the indexed strategy to going into specific preferreds. HPR-T is an alternative he prefers.

Show full opinionHide full opinion

There used to be perpetual preferreds that did poorly when bonds went up. He does not see a lot of growth here. He has been trading it. He trades a range. He prefers the indexed strategy to going into specific preferreds. HPR-T is an alternative he prefers.

COMMENT
COMMENT
September 21, 2018

ZPR-T vs HPR-T? Preferred shares in Canada are subject to resets, so they’re a great thing when interest rates rise. But when rates go down, they get creamed. It’s unlikely that rates will go down anytime soon. ZPR-T is laddered, and very short term and floating rate. Not a bad strategy. A better strategy would be HPR-T, which is actively managed by Fierra a fantastic manager in the fixed income space. The price on HPR-T is kinda in the same category as ZPR-T but you get the advantage of Fierra without paying a lot. Prefers HPR-T to ZPR-T.

Show full opinionHide full opinion

ZPR-T vs HPR-T? Preferred shares in Canada are subject to resets, so they’re a great thing when interest rates rise. But when rates go down, they get creamed. It’s unlikely that rates will go down anytime soon. ZPR-T is laddered, and very short term and floating rate. Not a bad strategy. A better strategy would be HPR-T, which is actively managed by Fierra a fantastic manager in the fixed income space. The price on HPR-T is kinda in the same category as ZPR-T but you get the advantage of Fierra without paying a lot. Prefers HPR-T to ZPR-T.

DON'T BUY
DON'T BUY
March 5, 2018

ZPR-T vs. HPR-T. HPR-T is actively managed whereas the other is a laddered, index ETF. The HPR-T is probably a better hold even though the fees are higher.

Show full opinionHide full opinion

ZPR-T vs. HPR-T. HPR-T is actively managed whereas the other is a laddered, index ETF. The HPR-T is probably a better hold even though the fees are higher.

COMMENT
COMMENT
January 23, 2018

Rate resets? Has heard a lot more about preferred shares in the last few months than he has in the last 5 years. Where you have to be very diligent is in reading the fine print. What is the reset? How many more basis points are the giving you over Canada's? What is their benchmark? When does it occur? This is a place that you could put part of your portfolio in, you just have to be extremely selective.

Show full opinionHide full opinion

Rate resets? Has heard a lot more about preferred shares in the last few months than he has in the last 5 years. Where you have to be very diligent is in reading the fine print. What is the reset? How many more basis points are the giving you over Canada's? What is their benchmark? When does it occur? This is a place that you could put part of your portfolio in, you just have to be extremely selective.

HOLD
HOLD
January 19, 2018

Bank of Montréal preferreds are in fact rate resets as opposed to perpetuals, which are by and large from iShares. As rates change, the rates they are paying will change as well. Generally with the preferred, if you are seeing rates going up, they tend to get beaten up a little, but rate resets are a little healthier than that. The yield is good on this and he has no intention of selling his.

Show full opinionHide full opinion

Bank of Montréal preferreds are in fact rate resets as opposed to perpetuals, which are by and large from iShares. As rates change, the rates they are paying will change as well. Generally with the preferred, if you are seeing rates going up, they tend to get beaten up a little, but rate resets are a little healthier than that. The yield is good on this and he has no intention of selling his.

WATCH
WATCH
January 8, 2018

Rate Reset Preferreds. With higher interest rates you will get high rates as they reset. He will step in after the next correction.

Show full opinionHide full opinion

Rate Reset Preferreds. With higher interest rates you will get high rates as they reset. He will step in after the next correction.

BUY WEAKNESS
BUY WEAKNESS
October 16, 2017

Laddered preferreds. They do well in rising interest rate environments. Fundamentally it is not cheap here. He got a lot a year ago. He does not like the relative value here. He would buy into weakness on a pull pack. That could happen in December.

Show full opinionHide full opinion

Laddered preferreds. They do well in rising interest rate environments. Fundamentally it is not cheap here. He got a lot a year ago. He does not like the relative value here. He would buy into weakness on a pull pack. That could happen in December.

COMMENT
COMMENT
May 4, 2017

How will rising interest rates affect this, up or down? If you believe preferred shares are a little undervalued compared to bonds, higher interest rates are going to have a negative impact. Doesn’t think it will be as dramatic as the impact you would get if holding a bond portfolio. This is not a bad way to hedge your bets on a higher interest rate environment, because as rates go up, they will reset the preferreds at a higher rate to keep the price steady.

Show full opinionHide full opinion

How will rising interest rates affect this, up or down? If you believe preferred shares are a little undervalued compared to bonds, higher interest rates are going to have a negative impact. Doesn’t think it will be as dramatic as the impact you would get if holding a bond portfolio. This is not a bad way to hedge your bets on a higher interest rate environment, because as rates go up, they will reset the preferreds at a higher rate to keep the price steady.

COMMENT
COMMENT
April 4, 2017

How will rising interest rates affect this? This is a “rules based” ETF and is made up of 100% fixed reset preferred shares. In theory, in a rise in rates, this would perform well.

Show full opinionHide full opinion

How will rising interest rates affect this? This is a “rules based” ETF and is made up of 100% fixed reset preferred shares. In theory, in a rise in rates, this would perform well.

COMMENT
COMMENT
March 13, 2017

Will the rise in value of this ETF continue? The TD Bank and Bank of Montréal launched some structured products into the market that were linked to the payouts of the preferreds, and they were wildly successful. The demand for these preferreds went through the roof. He doesn’t think this is sustainable and he sold into the rally. He doesn’t like the value up here and is reducing his exposure.

Show full opinionHide full opinion

Will the rise in value of this ETF continue? The TD Bank and Bank of Montréal launched some structured products into the market that were linked to the payouts of the preferreds, and they were wildly successful. The demand for these preferreds went through the roof. He doesn’t think this is sustainable and he sold into the rally. He doesn’t like the value up here and is reducing his exposure.

PARTIAL SELL
PARTIAL SELL
February 27, 2017

This is expensive now. He has been selling into the strength since December. If it gets back to those levels he would buy back in.

Show full opinionHide full opinion

This is expensive now. He has been selling into the strength since December. If it gets back to those levels he would buy back in.

PAST TOP PICK
PAST TOP PICK
December 23, 2016

(A Top Pick July 29/16. Up 8.13%.) Has a lot of clients that are really focused on how they are going to get the income they need. Every 5 years, these preferred shares get reset, and they benefit when interest rates are going up.

Show full opinionHide full opinion

(A Top Pick July 29/16. Up 8.13%.) Has a lot of clients that are really focused on how they are going to get the income they need. Every 5 years, these preferred shares get reset, and they benefit when interest rates are going up.

COMMENT
COMMENT
December 9, 2016

These are great vehicles, but in an upward climbing interest rate environment, it is going to be tougher for preferred shares, unless a lot of them are rate resets and are hedged to inflation.

Show full opinionHide full opinion

These are great vehicles, but in an upward climbing interest rate environment, it is going to be tougher for preferred shares, unless a lot of them are rate resets and are hedged to inflation.

COMMENT
COMMENT
December 9, 2016

This has a number of reset preferreds in it, which is why he thinks it took a big hit. If you are looking at this today, he thinks it is a reasonable Buy as an income component of your portfolio. He prefers preferred shares and high dividend paying common shares at this point, relative to the bonds. Thinks the next resets you will see on a number of these instruments are going to be higher as interest rates are rising.

Show full opinionHide full opinion

This has a number of reset preferreds in it, which is why he thinks it took a big hit. If you are looking at this today, he thinks it is a reasonable Buy as an income component of your portfolio. He prefers preferred shares and high dividend paying common shares at this point, relative to the bonds. Thinks the next resets you will see on a number of these instruments are going to be higher as interest rates are rising.

HOLD
HOLD
October 6, 2016

Sell? All of these tanked 1.5 years ago. A number of institutions have been buying the preferreds now, and he doesn’t see any reason to be selling this, once you have taken their hit. Also, as rates go up, some of the resets may be setting at a higher rate. A good fund and very well diversified. 5.5% dividend yield.

Show full opinionHide full opinion

Sell? All of these tanked 1.5 years ago. A number of institutions have been buying the preferreds now, and he doesn’t see any reason to be selling this, once you have taken their hit. Also, as rates go up, some of the resets may be setting at a higher rate. A good fund and very well diversified. 5.5% dividend yield.

PARTIAL SELL
PARTIAL SELL
August 15, 2016

Preferred shares. They had a good run-up in recent weeks. He is just starting to lighten up his position. It could go another 5%. We are getting close to 52 week highs. We cannot get back to the historic highs, however, of the last number of years.

Show full opinionHide full opinion

Preferred shares. They had a good run-up in recent weeks. He is just starting to lighten up his position. It could go another 5%. We are getting close to 52 week highs. We cannot get back to the historic highs, however, of the last number of years.

WEAK BUY
WEAK BUY
August 4, 2016

It got clobbered a year ago because all the rate reset preferred dropped. Right now they are offering a pretty good yield and they are well diversified. The problem with individual preferreds is the trouble getting rid of them. If he was going to buy a preferred, he would buy this.

Show full opinionHide full opinion

It got clobbered a year ago because all the rate reset preferred dropped. Right now they are offering a pretty good yield and they are well diversified. The problem with individual preferreds is the trouble getting rid of them. If he was going to buy a preferred, he would buy this.

TOP PICK
TOP PICK
July 29, 2016

Rate reset preferreds started coming out in 2008. They declare a dividend which has a formula attached to it. Every 5 years that rate gets reset based on a formula, a 5-year Government bond and some kind of spread. Sold off a lot last year, because the yield curve flattened significantly and there was a fear the rate resets were going to be a lot lower. However, what has tended to happen, is that you are now getting yields of about 5.5%. Actually one of the few securities that if interest rates go up, you are going to benefit from it. He could see about 5%-10% growth, plus reset rates going higher if rates do increase.

Show full opinionHide full opinion

Rate reset preferreds started coming out in 2008. They declare a dividend which has a formula attached to it. Every 5 years that rate gets reset based on a formula, a 5-year Government bond and some kind of spread. Sold off a lot last year, because the yield curve flattened significantly and there was a fear the rate resets were going to be a lot lower. However, what has tended to happen, is that you are now getting yields of about 5.5%. Actually one of the few securities that if interest rates go up, you are going to benefit from it. He could see about 5%-10% growth, plus reset rates going higher if rates do increase.

HOLD
HOLD
July 4, 2016

If interest rates stay where they are over the next 1-2 years, then this type of product and most dividend paying products will be fine more or less. He thinks most of the carnage was seen in 2015.

Show full opinionHide full opinion

If interest rates stay where they are over the next 1-2 years, then this type of product and most dividend paying products will be fine more or less. He thinks most of the carnage was seen in 2015.

COMMENT
COMMENT
May 19, 2016

BMO S&P/TSX Laddered Preferred (ZPR-T) or iShares S&P/TSX preferred (CPD-T)? The only difference between these 2 is that this one probably has a little bit more in rate reset preferred shares. Those are the shares that will do well when interest rates start to move higher. The both are very similar though. There is going to be some volatility in the preferred share market.

Show full opinionHide full opinion

BMO S&P/TSX Laddered Preferred (ZPR-T) or iShares S&P/TSX preferred (CPD-T)? The only difference between these 2 is that this one probably has a little bit more in rate reset preferred shares. Those are the shares that will do well when interest rates start to move higher. The both are very similar though. There is going to be some volatility in the preferred share market.

PARTIAL SELL
PARTIAL SELL
April 25, 2016

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.

Show full opinionHide full opinion

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.

PARTIAL BUY
PARTIAL BUY
March 21, 2016

Preferred Shares Index. Close to 6.5%. The preferred space has been really stressed. Convertible shares protect shareholders in a rising rate environment. However, that has not been the case so there has been low levels of interest in these shares. He has these holdings for clients as a diversification tool.

Show full opinionHide full opinion

Preferred Shares Index. Close to 6.5%. The preferred space has been really stressed. Convertible shares protect shareholders in a rising rate environment. However, that has not been the case so there has been low levels of interest in these shares. He has these holdings for clients as a diversification tool.

COMMENT
COMMENT
February 16, 2016

Preferreds got really clobbered this year, and are down about 24% on the year. A lot of institutions were buying them because they were representing pretty good value and paying about 6%. Has bought a little bit for some clients that were looking for yield. Doesn’t particularly like preferreds because you are basically exchanging the yield of a bond with the risk of a stock.

Show full opinionHide full opinion

Preferreds got really clobbered this year, and are down about 24% on the year. A lot of institutions were buying them because they were representing pretty good value and paying about 6%. Has bought a little bit for some clients that were looking for yield. Doesn’t particularly like preferreds because you are basically exchanging the yield of a bond with the risk of a stock.

BUY
BUY
January 18, 2016

Just bought some recently. The Preferred market has been so battered. He would not load up on this, but it would be one of the categories that he would include in a portfolio. He is stepping in now because it has a pretty good rate of return.

Show full opinionHide full opinion

Just bought some recently. The Preferred market has been so battered. He would not load up on this, but it would be one of the categories that he would include in a portfolio. He is stepping in now because it has a pretty good rate of return.

HOLD
HOLD
December 10, 2015

You can hold onto Preferred Shares for the longer-term. Preferred shares today are trading at about 125% greater than a yield on a 10 year bond with the same company. It is a better place to be than bonds would be. If interest rates are rising, that is a negative for preferreds. This is a good place to be.

Show full opinionHide full opinion

You can hold onto Preferred Shares for the longer-term. Preferred shares today are trading at about 125% greater than a yield on a 10 year bond with the same company. It is a better place to be than bonds would be. If interest rates are rising, that is a negative for preferreds. This is a good place to be.

BUY
BUY
December 3, 2015

Laddered preferred shares. This is not a bad way to enter the preferred share market. It is one of the fastest growing BMO ETFs today. This one is only investing in the very short end of the curve, resetting within 5 years. Government cuts in short term interest rates have impacted this one. He thinks the rates won’t go any further down in Canada.

Show full opinionHide full opinion

Laddered preferred shares. This is not a bad way to enter the preferred share market. It is one of the fastest growing BMO ETFs today. This one is only investing in the very short end of the curve, resetting within 5 years. Government cuts in short term interest rates have impacted this one. He thinks the rates won’t go any further down in Canada.

COMMENT
COMMENT
December 2, 2015

He generally does not like preferred shares. You are getting the yield of a bond and the risk of a stock. However, he has actually been buying a little of this. Yields are very attractive.

Show full opinionHide full opinion

He generally does not like preferred shares. You are getting the yield of a bond and the risk of a stock. However, he has actually been buying a little of this. Yields are very attractive.

HOLD
HOLD
November 24, 2015

This gives great diversification with a higher dividend and gives you instant diversification with hundreds of preferred shares. He likes the ladder component. As interest rates rise, you are going to have shares redeemed and invested at a higher rate. However, as interest rates have stayed lower longer than expected, we are now starting to get resets at a much lower level. Preferreds have come under tremendous pressure. Probably overdone in the short term and have gone down to very low values.

Show full opinionHide full opinion

This gives great diversification with a higher dividend and gives you instant diversification with hundreds of preferred shares. He likes the ladder component. As interest rates rise, you are going to have shares redeemed and invested at a higher rate. However, as interest rates have stayed lower longer than expected, we are now starting to get resets at a much lower level. Preferreds have come under tremendous pressure. Probably overdone in the short term and have gone down to very low values.

COMMENT
COMMENT
October 21, 2015

There are basically 2 types of preferred shares. Perpetuals and resets. One goes on with the same yield forever and on the other the rates are reset periodically. In January they all got clobbered because Bank of Canada cut the rates and the companies reset at a lower rate. Actually this is a pretty good time to be buying these. This one yields about 5.25%. He likes this.

Show full opinionHide full opinion

There are basically 2 types of preferred shares. Perpetuals and resets. One goes on with the same yield forever and on the other the rates are reset periodically. In January they all got clobbered because Bank of Canada cut the rates and the companies reset at a lower rate. Actually this is a pretty good time to be buying these. This one yields about 5.25%. He likes this.

BUY
BUY
August 10, 2015

The reset prefereds they hold are linked to 5 year Canada bonds. There is indiscriminant selling from retail investors that are scared. He thinks you have to stick with it.

Show full opinionHide full opinion

The reset prefereds they hold are linked to 5 year Canada bonds. There is indiscriminant selling from retail investors that are scared. He thinks you have to stick with it.

BUY
BUY
June 15, 2015

Preferred shares reset to the 5 year government of Canada bond. In a falling interest rate environment you get better performance from perpetual preferreds rather than from reset preferreds.

Show full opinionHide full opinion

Preferred shares reset to the 5 year government of Canada bond. In a falling interest rate environment you get better performance from perpetual preferreds rather than from reset preferreds.

BUY
BUY
May 13, 2015

Decent dividend. Preferred shares have been out of favour since 2008. This ETF is recovering and will continue to do so. The tax advantages to dividends are far higher than for bonds. He does not see a lot of risk. He prefers this to the bond market.

Show full opinionHide full opinion

Decent dividend. Preferred shares have been out of favour since 2008. This ETF is recovering and will continue to do so. The tax advantages to dividends are far higher than for bonds. He does not see a lot of risk. He prefers this to the bond market.

COMMENT
COMMENT
April 20, 2015

These reset preferreds are linked to the 5 year bond. So when the reset provisions come into play, if the bond yield is much lower, then the new coupon payment is going to be a lot less on the preferreds. They are more linked to fixed income than they are to equities. So if equity markets fall 10% on a correction, preferreds might fall 1%-2%, or sometimes they might go up depending on what is happening to interest rates at the time. They are a good diversifier because of this to get yield. He uses it by increasing his preferred exposure versus common. For example ZDV-T is the way to play high dividends in the Canadian market, which is 50 of the best dividend payers. When he fears the risk on the common shares, he wants a little more exposure to ZPR and when he feels the outlook is more for growth, he wants more ZDV. Meanwhile they both yield him more than 4% and it is a nice way to get Canadian tax efficient dividends in your taxable portfolio.

Show full opinionHide full opinion