Portland Investment Counsel
Latest Top Picks
Preferred G Series? This was a precursor to the “rate resets” and was known as a fixed floater. On a rate reset, you know what the spread is going to be but on this one, you don’t know.
Preferred G Series? This was a precursor to the “rate resets” and was known as a fixed floater. On a rate reset, you know what the spread is going to be but on this one, you don’t know.
With the recent pullback in real return bonds, would you suggest stepping in, or waiting? These are inflation linked so you will get a bit of a coupon plus inflation. His outlook for inflation is that it is flat with very little chances of it going up. These bonds were really brought out for institutional investors, specifically pension funds, but needed something in their book of retirees that was indexed to inflation. He is not a big fan right now.
With the recent pullback in real return bonds, would you suggest stepping in, or waiting? These are inflation linked so you will get a bit of a coupon plus inflation. His outlook for inflation is that it is flat with very little chances of it going up. These bonds were really brought out for institutional investors, specifically pension funds, but needed something in their book of retirees that was indexed to inflation. He is not a big fan right now.
Floating-Rate Preferred, Series T (TD.PR.T-T). Given what the market has been doing recently, he wanted to be a bit more defensive so has started to slowly build up his floating side. This is at a predetermined spread of 160 basis points over the government of Canada T-Bill. As the rates start to rise, this will go up. Paying about 2.60%-2.65%, which is more of a money market type. It is a dividend, you are getting, not interest so it would be about 3.5% of a money market type of paper.
Floating-Rate Preferred, Series T (TD.PR.T-T). Given what the market has been doing recently, he wanted to be a bit more defensive so has started to slowly build up his floating side. This is at a predetermined spread of 160 basis points over the government of Canada T-Bill. As the rates start to rise, this will go up. Paying about 2.60%-2.65%, which is more of a money market type. It is a dividend, you are getting, not interest so it would be about 3.5% of a money market type of paper.
4.4% Series A (VSN.PR.A-T). This will reset in 2017. He likes it because there is not a lot that come up in 2017. Right now it is trading below the par level at around $23.65 and gives you a current yield of about 4.65% and they yield to reset in 2017 of 4.81%. Bond equivalent interest adjustment would be about 6.7% yield.
4.4% Series A (VSN.PR.A-T). This will reset in 2017. He likes it because there is not a lot that come up in 2017. Right now it is trading below the par level at around $23.65 and gives you a current yield of about 4.65% and they yield to reset in 2017 of 4.81%. Bond equivalent interest adjustment would be about 6.7% yield.
Preferreds E, 5% Series 5. Hydro plants, wind power, etc. Nice coupon of 5%. Callable in 2018 at $26 and then goes down by $0.25 each year until 2022. Current yield of about 6.35% dividend yield.
Preferreds E, 5% Series 5. Hydro plants, wind power, etc. Nice coupon of 5%. Callable in 2018 at $26 and then goes down by $0.25 each year until 2022. Current yield of about 6.35% dividend yield.
Bonds. Government yields are at rock-bottom levels and the spread between them and corporate bonds is slowly shrinking down to where they were prior to the 2008 crisis. High yields have had phenomenal returns in the last 12 months and have come out of the gate this year still very good. Last year there might have been a deal with an 8%-9% coupon but those are now 5%-6%. Have really dropped quite a bit. Getting late in the economic cycle for interest rates and you need to be selective and cautious.
Bonds. Government yields are at rock-bottom levels and the spread between them and corporate bonds is slowly shrinking down to where they were prior to the 2008 crisis. High yields have had phenomenal returns in the last 12 months and have come out of the gate this year still very good. Last year there might have been a deal with an 8%-9% coupon but those are now 5%-6%. Have really dropped quite a bit. Getting late in the economic cycle for interest rates and you need to be selective and cautious.
4.1% bond maturing November 2015. Issues like this from US banks, offer some extra spread over where our traditional Canadian banks would be issuing. These are issued in Cdn $’s so you don’t have to hedge it.
4.1% bond maturing November 2015. Issues like this from US banks, offer some extra spread over where our traditional Canadian banks would be issuing. These are issued in Cdn $’s so you don’t have to hedge it.
Preferred shares. Better to buy them individually or go through a fund? New Basil III banking rules have removed the ability of banks to issue new preferred shares and count them into their Tier 1 capital. This is now a disadvantage for banks to issue these securities. The ones you see now are broken into 2 categories 1) rate reset which are very short term and 2) perpetuals. The feeling is that eventually these will all be gone as these rules take hold. If you have a reset that is redeemable in 2014 you may consider taking profits.
Preferred shares. Better to buy them individually or go through a fund? New Basil III banking rules have removed the ability of banks to issue new preferred shares and count them into their Tier 1 capital. This is now a disadvantage for banks to issue these securities. The ones you see now are broken into 2 categories 1) rate reset which are very short term and 2) perpetuals. The feeling is that eventually these will all be gone as these rules take hold. If you have a reset that is redeemable in 2014 you may consider taking profits.
Preferred C’s. These are below investment grade right now. If he owned, he would probably Sell. You are probably better off to look at something longer-term.
Preferred C’s. These are below investment grade right now. If he owned, he would probably Sell. You are probably better off to look at something longer-term.
Is there any way of knowing the “face value” of target bond ETF’s Maturity? These are products offered by Bank of Montréal (BMO-T). There is usually a set date that they are going to mature. The short answer to the question is that “No, there is no face value”. You are getting a basket of bonds so it is a total return type of product with a mix of bond interest and the fluctuation of the daily market value.
Is there any way of knowing the “face value” of target bond ETF’s Maturity? These are products offered by Bank of Montréal (BMO-T). There is usually a set date that they are going to mature. The short answer to the question is that “No, there is no face value”. You are getting a basket of bonds so it is a total return type of product with a mix of bond interest and the fluctuation of the daily market value.
Preferred C’s. This is a rate reset so it will come up for reset or redemption in Dec/14. If it were him, he’d be looking at taking profits and moving the money into something a little more longer term. Very high dividend yield of 5.75%.
Preferred C’s. This is a rate reset so it will come up for reset or redemption in Dec/14. If it were him, he’d be looking at taking profits and moving the money into something a little more longer term. Very high dividend yield of 5.75%.
What are odds on a sell-off in bonds? What’s the trade and where would the money go? We are getting a little bit later in the cycle. When we get to that point of interest rates going higher, bond managers are always watching economic indicators as to when that might happen and they start moving from corporate to more government.
What are odds on a sell-off in bonds? What’s the trade and where would the money go? We are getting a little bit later in the cycle. When we get to that point of interest rates going higher, bond managers are always watching economic indicators as to when that might happen and they start moving from corporate to more government.
(A Top Pick Feb 29/12. Up 5%.) Preferred V series 4.75%. This is a perpetual. He is bullish on the market so he wants to be a bit longer-term.
(A Top Pick Feb 29/12. Up 5%.) Preferred V series 4.75%. This is a perpetual. He is bullish on the market so he wants to be a bit longer-term.
(A Top Pick Feb 29/12. Up 7.8%.) Preferred P series 5.4%. This is a perpetual. He is bullish on the market so he wants to be a bit longer-term.
(A Top Pick Feb 29/12. Up 7.8%.) Preferred P series 5.4%. This is a perpetual. He is bullish on the market so he wants to be a bit longer-term.
(A Top Pick Feb 29/12. Up 8%.) Preferred A series 4.4%.
(A Top Pick Feb 29/12. Up 8%.) Preferred A series 4.4%.
