A preference for preferreds

Canada’s preferred share market has performed well in 2016 and conditions are in place for this solid performance
to potentially continue.


Key takeaways

  • Canada’s preferred share market has rebounded after being hit hard by the Bank of Canada’s decision to cut rates twice in 2015.
  • Attractive yields combined with a stable if not rising interest rate environment has boded well for rate reset preferred shares.
  • iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) may be a good opportunity for fixed income investors seeking diversification beyond government bonds and GICs.

A PREFERENTIAL YIELD

Data as of 9/30/16
Source: BlackRock, FTSE TMX
Canada Cash represented by FTSE TMX Canada 91 Day T-Bill Index. Generic Canadian Universe Bond represented by FTSE TMX Canada Universe Bond Index. Generic Canadian Corporate Bond represented by FTSE TMX Canada Corporate Bond Index. Past performance does not guarantee future results.

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