TSX ETF Investor Centre
U.S. Preferreds for High Quality Income
U.S. preferred shares have had a strong year, with the U.S. Preferred Index returning 14.4% over the past year to August 31, 2024. Although prices have moved up, yield to maturity (YTM) for U.S. Preferreds remain near their highest levels in the past decade and are among the highest-yielding North American fixed income categories.
A Potential Tax-Effective Alternative to GICs
On October 26, 2022, the Bank of Canada announced another 50 basis points increase to the overnight rate in an attempt to control inflation, increasing the target overnight rate to 3.75%. As a result of the sharp rate hikes this year, all major Canadian fixed income indices are down significantly, and fixed income investors may want to look for alternative investment opportunities for income and capital preservation.
Brompton Split Corp. Preferred Shares: Investor-Friendly Features, Significant Outperformance
2022 so far has seen a sharp increase in interest rates, combined with record-high inflation in both the U.S. and Canada, putting pressure on most categories of fixed income securities. With the U.S. Fed and the Bank of Canada expected to further hike interest rates in the near future, and the potential negative economic impact from the Russia-Ukraine war, this continues to be a challenging time for the fixed income investors who are looking for stable income and capital preservation.