While you may be on to something, I am struggling to follow the comparison. Any more detailed analysis you can throw in there to understand the significance of the 0.5% drop before the next dividend (reset)? How do you make the value comparison? Just on next reset yield alone? MaxedOut, I unlikely have much you can learn from but I will explain my thoughts a little further. Let's focus on TA.PR.F and TA.PR.J for this discussion. And because there has been quite a significant change in GoC 5-Yr over the past couple days, I'll use the latest and greatest numbers to illustrate. Here are impor ..read more

Is this really a looming problem? 1. Lobbyists always exaggerate the potential harm of a proposal they're fighting 2. The linked FT article says VG et al could use derivatives to get around the problem. The big fund sponsors like VG and Blackrock surely have the expertise and systems needed to create and manage derivatives in scale at cost low enough to minimize impact down at the retail unitholder level. Statistics: Posted by brucecohen — 26Jul2024 23:27 ..read more

Canadian.100 you have a point that the credit risk may increase as rates drop raising the market required return, but other than that, I think Thurman's argument makes sense. Would be interesting to see how the relationship of price to GOC 5YR evolves over time for rate resets, but we have only 15 years of data since rate resets began. Perhaps we could see this trend in floating rate debt over longer time horizon.... But makes sense that there is a component of the rate reset that acts like a perpetual and benefits from constant interest rate during GOC 5YR decline. Depends on the specific iss ..read more

The market value of the shares will adjust and drop if the revised (new reset value) dividend drops. So if the market value of the shares you already own drop, your return will be reduced. You need to consider the market value to know the true yield on your investment. Statistics: Posted by canadian.100 — 26Jul2024 22:48 ..read more

Even with Tea Party or MAGA or bigness-hating progressives or whatever, there's probably a significant gap between rhetoric and and getting a majority of Congress to support significant legislation to affect big finance interests for something like this. The bigger thing is that the 10% rule, for instance, is already on the books, and it will be easier via appointments to have federal agencies use them for partisan pestering. There's no real probability of anything happening to any extent that would cause index investors to say something like "gee, I better change my investment strategy becau ..read more

According to Yahoo Finance total returns YTD for various ETFs: QQQ 12.24% (I love the two decimal places, but oh well) VTI 13.14%. So the broad market is beating the tech sector YTD, although not by much. Of course, QQQ is only 70% tech. For a real tech ETF, I follow (but do not invest in) IYW 16.59%. Speaking of QQQ, I have been warned multiple times that the triple leveraged funds can do very badly in frothy markets, especially if the trend is down. So I follow (but do not invest in ) TQQQ 25.70%. Not three times the return on QQQ, but not a disaster either. If I had any play money left ..read more

DEI and ESG policies seem to have be quite popular From what I read, both DEI and ESG seem to have peaked and are starting to lose some of their appeal. (Markets are great at forcing people to face reality... eventually.) But both the Democrats and Republicans seem to have it in for bigness per se. Lina Khan is popular not just with Kamala Harris but also with JD Vance. So yeas, there will probably be headwinds. I suspect the right move for index investors is to limit the size of the fund cos and simply have a few more of them. Does that give me carte blanche to chase the index ETFs du jou ..read more

I suspect you'll see those Notice rates drop as well, unless EQ has some reason to subsidize it for marketing purposes. 5% for what is effectively a permanent 30-day GIC is pretty generous. On the other hand, they did launch it just before a BoC meeting date, knowing that a cut or two was likely, so maybe they are will to let the rates ride for a little bit. Statistics: Posted by NorthernRaven — 26Jul2024 21:49 ..read more

As far as the Resets, dropping interest rates do not help their values since they are likely to reset at lower interest rates based on the formula with the 5Yr bond rate. I don't believe that is true. Math suggests it should be quite the opposite. As interest rates drop, your expectations drop. Let's take a hypothetical of some XYZ.PR.A having a reset spread of 2.50%. In which of these two scenarios do you feel you are getting a better performance owning the preferred? GoC 5-Yr = 3.00% --- XYZ.PR.A = 5.50% or GoC 5-Yr = 0.50% --- XYZ.PR.A = 3.00% The former gives you not quite a 2x bette ..read more

That is quite interesting if you say so many Pref Shares are sold short. With interest rates now dropping I would think that the Perpetual Preferreds are more likely to increase in market value or at least stay stable - returns will be at least as good as on GICs which are now barely paying 5% and likely to drop. As far as the Resets, dropping interest rates do not help their values since they are likely to reset at lower interest rates based on the formula with the 5Yr bond rate. Statistics: Posted by canadian.100 — 26Jul2024 21:05 ..read more