Corporate bonds – Welcome Echizenshi http://welcome-echizenshi.com/ Mon, 21 Nov 2022 23:53:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://welcome-echizenshi.com/wp-content/uploads/2021/06/cropped-icon-32x32.png Corporate bonds – Welcome Echizenshi http://welcome-echizenshi.com/ 32 32 The government sets up a task force to address the challenges of the real estate sector https://welcome-echizenshi.com/the-government-sets-up-a-task-force-to-address-the-challenges-of-the-real-estate-sector/ Mon, 21 Nov 2022 23:53:00 +0000 https://welcome-echizenshi.com/the-government-sets-up-a-task-force-to-address-the-challenges-of-the-real-estate-sector/ VIETNAM, November 21 – HCM CITY – Prime Minister Phạm Minh Chính has ordered the formation of a task force to analyze and help address the challenges facing the real estate sector. The working group will be led by Minister of Construction Nguyễn Thanh Nghị, Deputy Minister of Construction Nguyễn Văn Sinh and Deputy Governor […]]]>

VIETNAM, November 21 – HCM CITY – Prime Minister Phạm Minh Chính has ordered the formation of a task force to analyze and help address the challenges facing the real estate sector.

The working group will be led by Minister of Construction Nguyễn Thanh Nghị, Deputy Minister of Construction Nguyễn Văn Sinh and Deputy Governor of the State Bank of Việt Nam Đào Minh Tú.

The task force is made up of senior officials from the ministries of construction, planning and investment, natural resources and environment, public security, and the banking and finance sectors, according to a decision. of Deputy Prime Minister Lê Văn Thành.

It aims to remove barriers for real estate businesses in Hà Nội, HCM City and other provinces.

The real estate sector plays a major role in the country’s economy, contributing 11% of the national GDP. It also maintains organic relationships with other areas and creates many jobs.

However, the sector has recently faced multiple problems such as shortage of capital and low liquidity, which led to the postponement of many projects.

As banks restrict lending, companies are left with only one option, which is to issue new bonds to pay for the previous issue, experts said.

However, authorities continue to investigate and punish real estate and bond fraud while credit quotas remain constrained, which has caused investors to lose confidence in the industry, leading to a sell-off as there is no buyers.

Many real estate companies have had to borrow money from different sources at high interest rates or even sell some of their assets.

During a recent meeting between the Government Office and representatives of the real estate sector, Lê Hoàng Châu, president of the HCM City Real Estate Association (HoREA), said that a number of real estate companies are facing the risk of decrease in liquidity and may have to make painful decisions. to survive.

Many real estate developers are also reducing their activities, as evidenced by investment or construction delays, he said.

They have stopped developing new projects, issuing new bonds or launching IPOs, he added.

Property developers have also cut their workforces, some by as much as 50%, according to Châu.

Experts said a huge amount of corporate bonds expiring and due to be paid in the last months of the year and 2023 and 2024 put a lot of pressure on issuers, which are mostly companies real estate.

A recent corporate bond market report by VCBS Securities Company showed that in the fourth quarter of 2022, there are approximately VNĐ85 trillion of bonds issued by banks and real estate companies that will mature. The volume of corporate bonds maturing in 2023 and 2024 is estimated at 790 trillion VNĐ.

For real estate businesses, HNX data also showed that by the end of the year, hundreds of billions of đồng bonds issued by real estate companies will mature.

Experts said the real estate sector’s challenges are expected to last well into 2024 as capital scarcity, low liquidity and an expected global economic recession cast a shadow over the sector. —VNS

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PHB dividend announcement $0.0528/share 11/18/2022 https://welcome-echizenshi.com/phb-dividend-announcement-0-0528-share-11-18-2022/ Sat, 19 Nov 2022 01:22:32 +0000 https://welcome-echizenshi.com/phb-dividend-announcement-0-0528-share-11-18-2022/ Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II (NYSE:PHB) declared on 11/18/2022 a dividend of $0.0528 per share payable November 25, 2022 to shareholders of record as of November 22, 2022. The dividend amount recorded is an increase of $0.0006 from the last dividend paid. Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund […]]]>

Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II (NYSE:PHB) declared on 11/18/2022 a dividend of $0.0528 per share payable November 25, 2022 to shareholders of record as of November 22, 2022. The dividend amount recorded is an increase of $0.0006 from the last dividend paid.

Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II (NYSE: PHB) has paid dividends since 2007, has a current dividend yield of 3.5046727657% and has increased dividends for 0 consecutive years.

The market capitalization of Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II is $1,058,016,000 and has a PE ratio of 0.00. The stock price closed yesterday at $17.12 and has a 52-week low/high of $16.35 and $19.50.

The PowerShares Fundamental High Yield Corporate Bond Portfolio is a mutual fund company. The Fund seeks investment results which generally correspond (before fees and expenses) to the price and yield of the RAFI® Bonds US High Yield 1-10 Index. The fund generally invests at least 80% of its total assets in high yield corporate bonds that make up the underlying index. The underlying index is composed of US dollar denominated bonds registered for sale in the United States whose issuers are public companies listed on major US stock exchanges. As at October 31, 2013, the Fund’s total assets were $629,941,371 and the Fund’s investment portfolio was valued at $618,820,893.

For more information on Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II, click here.

Fundamental High Yield Corp Bd ETF/Invesco Exchange-Traded Fund Trust II current dividend information as of the date of this press release is:

Dividend declaration date: November 18, 2022
Ex-dividend date: November 21, 2022
Dividend record date: November 22, 2022
Dividend payment date: November 25, 2022
Dividend amount: $0.0528

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Navigating volatile markets with ETFs https://welcome-echizenshi.com/navigating-volatile-markets-with-etfs/ Wed, 16 Nov 2022 05:14:31 +0000 https://welcome-echizenshi.com/navigating-volatile-markets-with-etfs/ By: BlackRock Canada High inflation and aggressive monetary tightening have rattled financial markets this year. “To say the least, there’s a lot going on,” says Gargi Chaudhuri, head of iShares Americas investment strategy at BlackRock. “Economies around the world face the challenge of higher inflation and higher interest rates in a slowing growth environment.” Investors […]]]>

By: BlackRock Canada

High inflation and aggressive monetary tightening have rattled financial markets this year. “To say the least, there’s a lot going on,” says Gargi Chaudhuri, head of iShares Americas investment strategy at BlackRock. “Economies around the world face the challenge of higher inflation and higher interest rates in a slowing growth environment.”

Investors are responding in particular by increasing the use of exchange-traded funds (ETFs) in their portfolios, to help manage volatility and seize opportunities in these turbulent times in the markets. “We’ve certainly seen increased adoption of ETFs across all customer segments,” says Helen Hayes, head of iShares Canada, “not just from a retail perspective, but also among pension plans, asset managers and family offices,” she adds. “In fact, as of the end of September, the Canadian ETF industry overall recorded organic growth of 7.2% this year.[1].”


Helen Hayes
Head of iShares Canada, BlackRock

In a study of institutional investors around the world earlier this year, it was found that 43% of North American institutional investors are more likely to increase their use of ETFs over the next 18 months.[2]. “We’ve seen institutional investors continue to use ETFs for tactical and strategic purposes, from low-cost building blocks in portfolio construction to alternative uses,” shares Hayes. “For example, we see clients using ETFs as a complement to derivative strategies or implementing factor investing using ETFs. Hayes also explains that in difficult market conditions, the liquidity of ETFs is a key benefit. This is particularly the case for fixed income securities, “every time we have seen increased volatility in global markets, we have also seen increased strategic cash management from a fixed income perspective. fixed income,” says Hayes. On a more positive note, says Hayes, institutional investors also benefit from the diverse range of equity and bond ETFs for tactical allocations to specific market segments or geographies.

In Chaudhuri’s view, macro factors — higher inflation, rising discount rates and geopolitical uncertainty — are increasing the likelihood of an economic slowdown in Canada and elsewhere. This would clearly impact corporate earnings to an extent that may not yet be fully priced into equity valuations, adds Chaudhuri, and she expects continued equity volatility at least until banks power plants interrupt their tightening cycle. As a result, “we generally remain defensive on the equity side,” she says.

Given the challenges, Chaudhuri recommends investors consider equity exposures that can help mitigate volatility and focus on quality. Two options to consider: iShares MSCI Min Vol USA Index ETF (XMU), which provides low beta exposure to high quality stocks, and iShares Core MSCI Quality Dividend Index ETF (XDU), which tracks a portfolio of US stocks with solid financial data. , above average dividend yields and stable or increasing dividends.


Gargi Chaudhuri
Head of iShares Americas Investment Strategy, BlackRock

Chaudhuri adds, however, that investors could find alpha-generating opportunities in commodity stocks, particularly in energy and agriculture. Disruptions to global food and energy supply chains, in part due to geopolitical tensions, and future increases in production are limited by a history of underinvestment – two factors that could support prices and corporate earnings in the future. ‘coming. With iShares Core S&P/TSX Capped Composite Index ETF (XIC), investors can gain broad exposure to the heavily commodity-based Canadian market, while iShares S&P/TSX Capped Energy Index ETF (XEG) and iShares Global Agricultural Index ETF (COW) offer more focused exhibits.

While she suggests playing defense on stocks, Chaudhuri says bonds are a different story. In fact, yields have risen so much that fixed income securities now offer attractive income generation. In addition, bonds could serve as ballast for equity allocations in the event of a downturn, as they have traditionally done. Meanwhile, Chaudhuri says macro forces suggest higher inflation could persist in the short to medium term, making inflation-linked bonds attractive. “We believe that bonds now offer pockets of opportunity,” she explains, “and particularly short-term corporate bonds and the inflation-linked front-end of the market.”

To express these views, investors can consider iShares Core Canadian Short-Term Bond ETF and Short-Term Corporate Bond Index ETF (XSB and XSH), iShares 1-5 Year US IG Corporate Bond Index ETF (CAD-Hedged) (XIGS) and iShares 0-5 Year TIPS Bond Index ETF (CAD-Hedged) (XSTH), which tracks inflation-linked US Treasuries with maturities of less than five years.

There is no doubt that 2022 has been a difficult year for financial markets. Yet ETFs help institutional investors reap the benefits of their low cost, liquidity, price discovery, and ability to capitalize on opportunities regardless of market conditions.

Visit BlackRock Canada for more information and timely investment ideas.


[1] As of September 30, 2022. Source: BlackRock
[2] Institutional Investor Survey Q1 2022: https://www.ishares.com/us/resources/institutional-investors/responding-to-uncertainty

Sponsored by


Disclaimer

iShares® ETFs are managed by BlackRock Asset Management Canada Limited or its affiliates. Commissions, trailing commissions, management fees and expenses all may be associated with an investment in iShares ETFs. Please read the relevant prospectus before investing. Funds are not guaranteed, their values ​​change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, where appropriate, only with the advice of a qualified professional.

XAW, XCLR, XCSR, XDG, XDGH, XDIV, XDLR, XDSR, XDU, XDUH, XEC, XEF, XEH, XEM, XESG, XEU, XFA, XFC, XFF, XFI, XFS, XFH, XIN, XMI, XML, XMM, XMS, XMTM, XMU, XMV, XQLT, XSEA, XSEM, XSUS, XULR, XUSR, XMW, XMY, XVLU and XWD are not sponsored, endorsed, sold or promoted by MSCI, and MSCI assumes no responsibility for with respect to any such funds or securities or any index on which such funds or securities are based. The Prospectus contains a more detailed description of the limited relationship MSCI has with BlackRock Institutional Trust Company, NA and any related funds.

Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). TSX is a registered trademark of TSX Inc. (“TSX”). All of the above trademarks have been licensed to S&P Dow Jones Indices LLC and sublicensed for certain purposes to BlackRock Fund Advisors (“BFA”), which in turn has sublicensed these marks to its affiliate, BlackRock Asset Management Canada Limited (“BlackRock Canada”), on behalf of the relevant fund(s). The index is a product of S&P Dow Jones Indices LLC, and has been licensed for use by BFA and by extension, BlackRock Canada and the relevant fund(s). The funds are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices”) or TSX, or any of their respective affiliates. Neither S&P Dow Jones Indices nor TSX makes any representation regarding the advisability of investing in such funds.

Manulife Investment Management Limited and Manulife Investment Management Limited (Europe) Limited (collectively referred to as the “Licensor”) make no representations or warranties, express or implied, regarding the advisability of investing in securities generally or in the iShares Global Agriculture Index Fund and iShares Global Infrastructure Index Fund, in particular, or the ability of the Manulife Investment Management Global Agriculture Index and the Manulife Investment Management Global Infrastructure Index to track overall market performance. Licensor’s sole relationship with BlackRock Asset Management Canada Limited is the licensing of the indices which is determined, composed and calculated by Licensor without regard to BlackRock Asset Management Canada Limited or the iShares Global Agriculture Index Fund and the iShares Global Infrastructure Index Fund. Licensor shall have no obligation to take the needs of BlackRock Asset Management Canada Limited or the owners of the iShares Global Agriculture Index ETF and iShares Global Infrastructure Index ETF into consideration in determining, composing or calculating of the index. Licensor shall not be liable to anyone for any error in the Index and shall have no obligation to notify anyone of any error therein.

XBB, XCB, XCH, XFR, XGB, XGGB, XHB, XLB, XQB, XRB, XSB, XSH XSQ and XSU (collectively, the “iShares ETFs”) are in no way sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group companies (collectively, the “LSE Group”). The LSE Group does not accept any liability to any person arising out of the use of the iShares Funds or the data therein.

‘FTSE®’ ‘Russell®’ and ‘FTSE Russell®’ are trade marks of the relevant LSE Group company and are used by any other LSE Group company under licence.

The ETF is not sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, and such company makes no representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with ICE Data Indices, LLC

Bloomberg®” and Bloomberg US Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index, Bloomberg US Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (CAD-Hedged), Bloomberg US Aggregate Bond Index, Bloomberg US Aggregate Bond Index (CAD-Hedged) and Bloomberg US High-Yield Very Liquid Index (CAD Hedged) are service marks of Bloomberg Finance LP and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by BlackRock. Bloomberg is not affiliated with BlackRock, and Bloomberg does not endorse, approve, review, or recommend XSTP, XSTP.U, XSTH, XAGH, XAGG, XAGG.U, or CHB. Bloomberg does not guarantee the timeliness, accuracy or completeness of any data or information relating to XSTP, XSTP.U, XSTH, XAGH, XAGG, XAGG.U or CHB.

© 2022 BlackRock Asset Management Canada Limited. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. Used with permission.

MKTGH1122C/S-2570482-2/3

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Investment in mutual funds https://welcome-echizenshi.com/investment-in-mutual-funds/ Sat, 12 Nov 2022 19:27:00 +0000 https://welcome-echizenshi.com/investment-in-mutual-funds/ We have witnessed powerful advertising campaigns (ads) launched by mutual fund companies, promoting the “charm” of Systematic Investment Plans (SIPs). The campaign influences the investment decision of retail investors, causing them to invest almost blindly in mutual funds, mainly through SIP. Notably, SIP is simply an investment route that causes investors to regularly invest a […]]]>

We have witnessed powerful advertising campaigns (ads) launched by mutual fund companies, promoting the “charm” of Systematic Investment Plans (SIPs). The campaign influences the investment decision of retail investors, causing them to invest almost blindly in mutual funds, mainly through SIP.

Notably, SIP is simply an investment route that causes investors to regularly invest a fixed amount in mutual funds, primarily in equity mutual funds. Here, investors do not need to invest in a lump sum, but they can spread their equity mutual fund investments over a period of time. In fact, the SIP was designed to lure small salaried investors, who basically do not have the financial capacity to invest in lumsump, into the fold of the equity market.

The advertising campaigns present investment in mutual funds, especially through the safe SIP route, as well as the most profitable investment. The impact of these advertising campaigns has been so powerful that the banks’ recurring deposit (RD) scheme is now receiving a moderate response from depositors, as most of their depositors have preferred the SIP scheme over the RD scheme.

However, the safety of investments in mutual funds, especially in SIP carries question marks. Even though the mutual fund industry is growing exponentially as it has managed to attract millions of new raw investors, growth in wealth creation for investors is not guaranteed.

Looking at the market scenario, mutual fund management has recently faced tough weather conditions and most of their programs have underperformed. A report found “about 44% of open-end diversified mutual funds failed to beat their benchmark”. An open-end mutual fund is a fund that is available for sale and purchase on demand at net asset value (NAV). These plans do not have a fixed term.

Normally, investing money in a bank through programs such as RD reassures the depositor that the money is safe in the bank because it is insured and there is no such history when depositors’ money has not been returned by a bank on demand. On the other hand, investment in mutual funds is not guaranteed. We always hear fund managers talk about high returns in mutual fund schemes, but we hardly hear any likelihood of losing the investment from them.

So investing in mutual funds and through the SIP does not guarantee that investors will not lose money. In fact, in some extreme circumstances, investors could lose all their money. Notably, each such plan, under the regulations, has a disclaimer notifying that the investment may lose value. Although mutual funds offer the protection of investing in many stocks, this protection could fail in a bad market.

Some time ago, mutual fund investors were shocked when HDFC and Kotak Mutual Funds Fixed Maturity Plans (FMP) failed to return all of the investors’ money due to the delay in reimbursement of two companies of the Essel group. Also in the past, investors in various debt systems have been affected by downgrades of investment ratings, payment defaults or repayment delays.

When we look at the performance of mutual funds, we find that these funds have not been able to gain the same kind of confidence. A secular investor would not want to lose his money and he is forced to accept market fluctuations. Among other things, quick money schemes and voucher funds have wreaked havoc on mutual funds where investors have been plundered in the name of high returns.

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Brookfield Renewable will issue C$400 million of green bonds https://welcome-echizenshi.com/brookfield-renewable-will-issue-c400-million-of-green-bonds/ Mon, 07 Nov 2022 23:57:10 +0000 https://welcome-echizenshi.com/brookfield-renewable-will-issue-c400-million-of-green-bonds/ NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES BROOKFIELD, News, Nov. 07, 2022 (GLOBE NEWSWIRE) — Brookfield Renewable Partners LP (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable”) announced today that it has agreed to issue an amount aggregate principal amount of C$400 million Medium Term Notes, Series 15, due […]]]>

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES

BROOKFIELD, News, Nov. 07, 2022 (GLOBE NEWSWIRE) — Brookfield Renewable Partners LP (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable”) announced today that it has agreed to issue an amount aggregate principal amount of C$400 million Medium Term Notes, Series 15, due November 9, 2032, which will bear interest at a rate of 5.88% per annum, payable semi-annually (the “Notes”). Brookfield Renewable Partners ULC (“Finco”), a subsidiary of Brookfield Renewable, will be the issuer of the Notes, which will be fully and unconditionally guaranteed by Brookfield Renewable and certain of its principal holding subsidiaries.

The Notes will be issued under a base shelf prospectus dated August 20, 2021 and related prospectus supplement and pricing supplement to be dated November 7, 2022. The offering is expected to close on on or about November 9, 2022, subject to customary closing conditions. .

The Notes will represent Brookfield Renewable’s sixth corporate green bond in Canada. Brookfield Renewable intends to use the net proceeds from the sale of the Notes to repay indebtedness incurred by Brookfield Renewable to fund Eligible Investments (as defined in Brookfield Renewable’s Green Bond and Preferred Securities Framework dated February 2020) . The Green Bond and Preferred Securities framework is available on Brookfield Renewable’s website and described in the prospectus supplement relating to the offering.

The Notes have been rated BBB+ by S&P Global Ratings, BBB (high) with a stable trend by DBRS Limited and BBB+ by Fitch Ratings.

The Notes are offered through a syndicate of agents led by BMO Capital Markets, CIBC Capital Markets and Scotiabank, and including National Bank Financial Markets, RBC Capital Markets, TD Securities, HSBC, Desjardins , Mizuho Securities, MUFG, SMBC Nikko, iA Private Wealth Inc. and Sera Global.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, and there will be no offer or sale of securities in any jurisdiction in which such offer, solicitation or sale would be illegal. The securities offered have not been approved or disapproved by any regulatory authority and none of such authorities has passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offering and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the “United States Securities Act”) or any state law on securities and may not be offered or sold in the United States. or to United States persons who are not registered or who do not benefit from an applicable exemption from the registration requirements of United States securities law and applicable state securities laws.

Brookfield Power

Brookfield Power operates one of the largest publicly traded pure-play renewable energy platforms in the world. Our portfolio consists of utility scale hydro, wind, solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 24,000 megawatts of installed capacity and over 100,000 megawatts and 8 million metric tons per annum (“MMTPA”) of the carbon capture and storage development pipeline. Investors can access its portfolio through either Brookfield Renewable Partners LP (NYSE: BEP; TSX: BEP.UN), a Bermuda-based limited partnership, or Brookfield Renewable Corporation (NYSE, TSX: BEPC), a Canadian company. Further information is available at https://bep.brookfield.com. Important information may be disseminated exclusively via the website; investors are invited to consult the site to access this information.

Brookfield Renewable is the flagship listed renewable energy company of Brookfield Asset Management, a global leader in alternative asset management with more than US$750 billion in assets under management.

Contact information:
Media: Investors:
Simon Maine Cara Silverman
General Manager – Communications Director – Investor Relations
+44 (0)7398 909 278 (416) 649-8172
simon.maine@brookfield.com cara.silverman@brookfield.com

Caution Regarding Forward-Looking Information

Note: This press release contains forward-looking statements and information within the meaning of Canadian securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements can be identified by the use of words such as “will”, “planned”, “intends” or variations of these words and expressions. Forward-looking statements contained in this press release include statements regarding the closing, terms and use of proceeds of the note offering. Although Brookfield Renewable believes that these forward-looking statements and information are based on reasonable assumptions and expectations, there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance on forward-looking statements and information, as such statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Brookfield Renewable to differ materially of the anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. Except as required by law, Brookfield Renewable undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, whether as a result of new information, future events or otherwise.

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It’s time to launch financial advisory services https://welcome-echizenshi.com/its-time-to-launch-financial-advisory-services/ Sat, 05 Nov 2022 16:10:00 +0000 https://welcome-echizenshi.com/its-time-to-launch-financial-advisory-services/ 05 November 2022, 22:10 Last modification: November 05, 2022, 10:17 p.m. Md Nafeez Al Tarik. Illustration: TBS “> Md Nafeez Al Tarik. Illustration: TBS Amidst frequent and unique world events, making better use of money through investments has become more difficult for savers as the capital market in Bangladesh needs the immediate launch of professional […]]]>

05 November 2022, 22:10

Last modification: November 05, 2022, 10:17 p.m.

Md Nafeez Al Tarik. Illustration: TBS

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Md Nafeez Al Tarik. Illustration: TBS

Amidst frequent and unique world events, making better use of money through investments has become more difficult for savers as the capital market in Bangladesh needs the immediate launch of professional financial advisory services, said Md Nafeez Al Tarik, Director General of Dhaka. Bank Securities Ltd – one of the best brokerage companies in the country.

Nafeez Al Tarik, Chartered Financial Analyst and Financial Risk Manager, said that many savers, although they do not need the short-term exit, deposit their funds in banks for a low return just because they don’t know how to invest in other financial assets. assets like stocks, bonds, mutual funds.

The investment expert noted that the securities regulator should immediately respond to the situation by framing the regulation of professional financial advice services and letting experts eligible under their regulatory license help people in the right places. investments for their financial well-being.

About ten years ago, the Bangladesh Securities and Exchange Commission (BSEC) launched two regulations – “Bangladesh Securities and Exchange Commission (Research Analysis) Rules” and “Investment Advisor Bidhimala”. The former was finalized on the basis of professional analysts who provide their clients with analytical reports, but the draft rule on investment advisory service was not adopted by the regulator during this period.

Tarik, in an interview with The Business Standard, recently said that Bangladesh’s capital market currently has marketable bonds – treasuries, corporate bonds and Sukuk – alongside efforts to launch more mutual funds, in launching new products like exchange-traded funds and real estate investments. trusts.

All have their practical issues in terms of floating, operating, attractive returns for investors and, very importantly, scalability for the public.

For example, he suggested tax advantages on the interest income of bond investors so that their effective return reaches a lucrative level.

He said that financial advisors can influence many savers to invest some of their money in market instruments because they have the knowledge and experience to find good investment opportunities, deciding on the right product for an investor according to his financial profile and his appetite.

Always in a particular situation, the best answer to too many important questions – such as how much capital to invest in which instrument, when to buy or when to sell or what to do in the event of an unforeseen event – comes from the experts, said Tarik who is also a reputable mentor in the Bangladesh capital market industry.

Bangladesh, like its peer economies, is suffering from a deterioration in the balance of payments and the exchange rate as a result of the Russian-Ukrainian conflict and the capital market is struggling with the fallout from the war.

In tough times for equities, Tarik said, financially savvy investors tend to reduce their exposure to equities and increase relatively safer ones like bonds. But since the majority of listed scrips are not traded due to the unconventional floor price in local exchanges, exit becomes impossible when an investor needs it.

Tarik, who prefers value investments to market speculation, said the success of investments is subject to deeper analysis of the situation and factors.

For example, earnings per share that are widely followed by investors can look misleading if a company is too dependent on accrued revenue share and generates less cash flow in the business. Free cash flow per share and return on investment are two important metrics in relation to earnings per share and earnings growth gauges.

A company can actually hurt shareholder value in some circumstances by increasing its profits. This occurs when the capital investments needed for growth exceed the present value of the cash flows from those investments. Before even looking at financial metrics, an investor should consider the quality of the board and senior management and their professionalism in order to generate shareholder value.

As psychology dominates numbers in the stock market, short-term speculation may not need such rigorous analysis since in the short term, the stock market behaves like a voting machine. But in the long run, it acts like a balance, as the father of value investing, Benjamin Graham, said.

If an investor wants to invest for retirement or a child’s education, such analysis of the board, management, governance and a thorough financial analysis of the company is crucial, he said. declared.

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Access short duration fixed income securities with AVSF and SDSI https://welcome-echizenshi.com/access-short-duration-fixed-income-securities-with-avsf-and-sdsi/ Wed, 02 Nov 2022 21:26:06 +0000 https://welcome-echizenshi.com/access-short-duration-fixed-income-securities-with-avsf-and-sdsi/ Bond markets have been hit with sustained volatility, making them just as unreliable for generating returns as equity markets this year. With inflation still at an all-time high and the Federal Reserve continuing to aggressively raise interest rates, this volatility doesn’t appear to be abating any time soon. Columbia Threadneedle’s head of multi-asset strategy, Anwiti […]]]>

Bond markets have been hit with sustained volatility, making them just as unreliable for generating returns as equity markets this year. With inflation still at an all-time high and the Federal Reserve continuing to aggressively raise interest rates, this volatility doesn’t appear to be abating any time soon.

Columbia Threadneedle’s head of multi-asset strategy, Anwiti Bahuguna, told Bloomberg that “bond market volatility will remain elevated over the next six to 12 months,” adding that the Fed may ease its rate hikes the next month. next year only to resume if the economy is stronger. provided that.

According to Sandra Testani, vice-president of ETFs product and strategy for American Century Investments, the fund manager thinks “a recession is likely for the US and Europe” and expects inflation “to go down going forward… but does not return to its former level”.covid levels anytime soon.

“There is also a solid chance of stagflation going forward,” she added.

As a result, Testani said she sees a preference among investors for credit funds “that have the potential to provide inflation protection or reduce the inflation of returns.”

“In fixed income, there is a preference for higher quality over high yield, and short and ultra-short duration over long-term assets,” she said.

For bond investors looking for higher quality, shorter duration options for their portfolios, there are Avantis Short Term Fixed Income ETFs (AVSF B) and the American Century Short Term Strategic Income ETFs (SDSI ).

AVSF invests primarily in higher quality debt securities of a diversified group of US and non-US issuers with shorter maturities. The fund’s portfolio managers seek out bonds with high expected returns through a process that uses an analytical framework, which includes an assessment of each bond’s expected income and capital appreciation.

AVSFwhich has an expense ratio of 0.15%, is targeting an average maturity of three years.

Meanwhile, the new launch SDSI seeks income and, as a secondary objective, long-term capital appreciation. The strategy will seek to generate an attractive yield by investing in several segments of the fixed income market, which maintain a short duration objective.

The fund invests in high quality, high yielding non-cash debt securities. These securities may include corporate bonds and notes, government securities and securities backed by mortgages or other assets.

SDSI is a transparent asset ETFs with holdings disclosed daily and an expense ratio of 0.32%.

For more news, insights, and strategies, visit the Core Strategies channel.

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Treasuries’ jolts worry Wall Street and Washington https://welcome-echizenshi.com/treasuries-jolts-worry-wall-street-and-washington/ Sun, 30 Oct 2022 17:02:00 +0000 https://welcome-echizenshi.com/treasuries-jolts-worry-wall-street-and-washington/ Comment this story Comment Trouble is brewing in the US Treasuries world, causing concern among investors and some policymakers in Washington. US Treasuries are a key pillar of the global financial system, but there are signs that the pool of interested buyers may dry up as an unintended consequence of rising US interest rates. So […]]]>

Comment

Trouble is brewing in the US Treasuries world, causing concern among investors and some policymakers in Washington.

US Treasuries are a key pillar of the global financial system, but there are signs that the pool of interested buyers may dry up as an unintended consequence of rising US interest rates.

So far, no one is panicking. But the US Treasuries market recently displayed a level of volatility not seen since the start of the pandemic crisis in 2020, when the Federal Reserve cut interest rates to zero and then bought for 1,000. billions of dollars in treasury bills and other financial assets. to keep the global financial system functioning.

Senior government officials have acknowledged in recent weeks that dysfunctional U.S. government bond markets risk triggering a spike in federal government borrowing costs and a broader upheaval in financial markets. They begin to take preventive measures.

“We have been watching the Treasury market very carefully,” Treasury Secretary Janet L. Yellen told The Washington Post on Thursday, noting that the market had continued to operate normally. “It is of course essential that it continues to function well.”

As recession fears grow, Washington begins to weigh how to respond

The Treasury Department auctions bonds to pay for government operations, in effect borrowing money from investors in exchange for a guarantee of repayment with interest. These bonds are crucial for a healthy financial system because other, riskier assets – stocks and corporate bonds – are priced against the cost of treasury bills.

But as central banks such as the Federal Reserve embark on one of the biggest interest rate hikes in decades, demand for US government bonds already in circulation has plummeted in part because that most of this debt bears lower interest rates than the bonds issued. today. This could mean a glut of cheap, low yielding debt with few buyers.

There has been no urgency so far, but the Treasuries market is attracting more and more attention on fears that as liquidity dries up around the world, it may ‘at some point there aren’t enough buyers of US government-issued debt. With prices falling, 10-year Treasury yields have already risen from less than 1.5% to around 3.8% this year. (Bond prices and bond yields move in opposite directions.)

A shortage of buyers could cause a ripple effect by driving down bond prices, some economists and analysts warn. A panicked sale of US Treasuries could wreak havoc on markets, giving investors leverage to demand yields or higher yields on their bond purchases. This would mean higher prices for all sorts of financial instruments pegged to these rates. It would also increase the cost to the government of financing its debt.

As the Fed battles inflation, fears of overcorrecting

“If we were to have a buyers’ strike or a failed round of Treasury auctions, interest rate increases could accelerate – and all of a sudden credit card debt financing, purchases cars, [and] housing purchases would increase in cost,” said Joe Brusuelas, chief economist at management consultancy RSM. “It could lower the standard of living for Americans and you could end up with a very difficult problem for your economy.”

Experts also raised other concerns. New regulations enacted after the 2008 financial crisis discouraged banks from acting as intermediaries by requiring them to hold more capital to cover potential losses on government securities. In addition, the Federal Reserve and other central banks are selling Treasuries or simply not reinvesting them any more, as part of their attempts to cool the economy and fight inflation, removing a supportive buyer from US bonds.

And the recent panic in Britain over its own public debt – the value of which has recently fallen dramatically, leading to intervention by the Bank of England – has further amplified fears that a similar market panic could happen here. But most economists downplay the risk.

“You worry about the sellout, the situation where some sales are coming in and because there’s not enough demand, you have more sales and more sales and you get kind of a spiral,” Donald said. Kohn, former Vice President of the Federal Government. Reserve Board of Governors and now a senior fellow at the Brookings Institution, a DC-based think tank. “I don’t think anyone sees that right now.”

“But the fact that dealers may not have the ability to step in and smooth things over is concerning,” he noted.

JPMorgan Chase analysts expressed similar concerns in a report this month, citing the lack of “structural demand for.”

“The reversal in demand has been amazing because it has been rare,” they added.

Yellen focused on instability in US bond markets long before the current surge, working to implement new rules aimed at strengthening them. These measures include improving data collection; demand more oversight of Treasury trading platforms; and increasing the number of eligible dealers to allow more entrants to bid on the market.

Despite his Thursday comments emphasizing calm, Yellen appears to be stepping up those efforts amid the latest signs of volatility. Treasury officials have asked market traders about a possible government debt buyback program, a potential sign that worries the US government. The issue was also recently discussed by the Financial Stability Supervisory Board, which Yellen chairs, and is expected to be addressed at its next meeting.

One of Yellen’s biggest concerns, as she told Bloomberg News this month, is the potential for “adequate liquidity loss in the market.”

But she also sees a contrary trend: as payments on Treasuries increase, more and more foreign investors are entering the market to absorb the excess capacity.

“You asked who was going to buy Treasuries, and I think part of the answer is that they have very attractive yields,” Yellen said Thursday.

Komal Sri-Kumar, chairman of economic consultancy Sri-Kumar Global Strategies, also believes higher interest rates will make US debt more lucrative for investors, bringing more buyers into the market and allaying concerns about liquidity.

And more generally, many economists and financial analysts say worries about market weakness may be overblown, especially at the moment when healthy levels of US government bonds – worth around $600 billion dollars – continue to be traded every day.

Historically speaking, warnings about the danger of investors refusing to buy US government debt have not held true. Under the Obama administration, for example, Republicans and other deficit hawks have declared that large deficits would risk triggering a financial collapse if bond buyers lost faith in the US government. No such crisis materialized.

Sri-Kumar calls these warnings “a ridiculous thing”.

“If I refuse to buy [long-term] obligations, what happens then? The Treasury will have to offer a higher return, and we are achieving a better balance,” Sri-Kumar said. “It’s not Argentina, Zimbabwe or Turkey, where investors have said, ‘Interest rates are insufficient; keep hiking. That’s why I think a buyers’ strike doesn’t make sense.

That sentiment was underscored by a senior Treasury official, who told The Washington Post that U.S. policymakers have confidence in U.S. debt markets in part because so many investors around the world are looking to buy those bonds. There are countries that are big buyers, including Japan, but even then it is only 4% of the total pool.

And while volatility is on the rise in bond markets, volatility is also hitting the financial sector more broadly – ​​suggesting no specific risk for US bonds despite their outsized importance, the Treasury official said.

Poorer countries could suffer from US efforts to slow inflation

The situation was different recently in Britain, where much of the country’s long-term public debt was held by pension funds. This made UK bonds, or gilts, much more vulnerable to price swings as pension funds moved in unison to dump these assets as their value fell.

This type of contagion is less likely to emerge in the United States, analysts say.

“If you [expect] demand will increase for a higher yielding asset, [this] would make the fear a bit silly or misplaced,” said Bob Hockett, a former Fed official and public policy expert now at Cornell University. “I don’t want to be complacent about this…but there’s nothing foreseeable on the horizon that’s a serious competitor to the US dollar.”

Yet rising bond yields can hurt the US economy and government without causing catastrophe. If bond yields have to soar to attract investors, capital will flow into public debt – and out of more productive uses, such as the corporate debt that fuels investment.

“The crisis scenario is a massive sell-off of these low-yielding bonds all at once. That would be the scenario of a global financial crisis,” said Marc Goldwein, senior vice president for policy at the Committee for a Federal Budget. responsible, a Washington-based think tank.”But I think it’s unlikely. … The most likely scenario is that it will cost the US government a lot of money and the US economy a lot of money.”

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UK bonds have seen their value fall by £1.3bn since the start of 2022 https://welcome-echizenshi.com/uk-bonds-have-seen-their-value-fall-by-1-3bn-since-the-start-of-2022/ Fri, 28 Oct 2022 10:04:37 +0000 https://welcome-echizenshi.com/uk-bonds-have-seen-their-value-fall-by-1-3bn-since-the-start-of-2022/ Gilts and pegged gilts have fallen 26.4% and 36.2% respectively since the start of the year, losing £882.6 billion in value, as the value of UK corporate bonds fell 514 £.5 billion over the same period. Colin Leggett, Chief Investment Officer at Collidr, said: “The unprecedented bond slump is not just causing problems for pension […]]]>

Gilts and pegged gilts have fallen 26.4% and 36.2% respectively since the start of the year, losing £882.6 billion in value, as the value of UK corporate bonds fell 514 £.5 billion over the same period.

Colin Leggett, Chief Investment Officer at Collidr, said: “The unprecedented bond slump is not just causing problems for pension funds exposed to LDI strategies. The fall is also destroying returns for any investor with significant exposure to UK bonds. “

Bank of England to start selling UK government bonds on November 1

Considering that bonds have been the cornerstone of many “conservatively” managed fund strategies, such as the 60/40 archetype, Leggett said many fund managers are “suffering from this unprecedented unwinding of UK bond positions”. .

“Few individual fund managers have actually experienced a fall in bond markets of this magnitude. Many may have been caught off guard by the speed and aggressiveness of the sell-off and some were slow to reduce allocation longer duration bonds,” he said. said.

Leggett added that the continued bond selling is the latest evidence that the typical 60/40 portfolio for retail investors “no longer provides sufficient protection against downside volatility.”

There has long been a “misconception” among some that bond prices and stock prices are inversely correlated, the report reads.

When do bear markets turn?

This led investors to believe that if equities fell, the bond component of their portfolio would provide a partial hedge against that fall. Instead, this year bonds have fallen even more than stocks.

“Retail investors who thought having a traditional 60/40 portfolio would provide some degree of protection against a market downturn have had a very difficult year in 2022. In times of economic stress, assets can be correlated in ways that does not correspond to traditional ‘perceived wisdom’, said Leggett.

“Many institutional investors using liability-driven investment strategies were unprepared for such extreme market conditions. Investors should always consider the risk that higher price volatility than recent history will have on their wallets.”

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PFF: Currently only meaningful for diversification purposes (NASDAQ: PFF) https://welcome-echizenshi.com/pff-currently-only-meaningful-for-diversification-purposes-nasdaq-pff/ Tue, 25 Oct 2022 09:37:00 +0000 https://welcome-echizenshi.com/pff-currently-only-meaningful-for-diversification-purposes-nasdaq-pff/ Bet_Black The iShares Preferred and Income Securities ETF (NASDAQ: PFF) holds preferred shares and hybrid securities denominated in US dollars. These are the preferred shares whose dividend payments were prioritized over common stock by some companies at the height of the Covid-induced uncertainty in 2020. Moreover, in a period where dividend growth remains uncertain due […]]]>

Bet_Black

The iShares Preferred and Income Securities ETF (NASDAQ: PFF) holds preferred shares and hybrid securities denominated in US dollars. These are the preferred shares whose dividend payments were prioritized over common stock by some companies at the height of the Covid-induced uncertainty in 2020. Moreover, in a period where dividend growth remains uncertain due to macroeconomic concerns, the stability of the “preferred” is beginning to find some appeal.

However, since owning preferred stocks is analogous to owning shares of a company (since you can buy them the same way as stocks), they are subject to volatility and the ETF has suffered a 23% year-over-year decline, as shown in the chart below, which is much worse than the broader market represented here by the SPDR S&P 500 Trust ETF (SPY).

Chart
Data by YCharts

Still classified as a “taxable bond”, the PFF pays a decent yield above 5% and the purpose of this thesis is to assess other downside risks as well as perform a comparison with others in the class d fixed income assets.

First, I provide an overview of the current economic environment, highlighting the reasons for the attractiveness of ETFs.

The current environment

It remains a challenging environment as the Federal Reserve is determined to fight inflation, even to the point of orchestrating an economic slowdown, one of the side effects of which has been the volatility in global equity markets since the start of this year.

In this regard, the two- and ten-year yield curves remain inverted as shown in the chart below, which is illogical given that when you lend money (in this case to the US government), you should be more compensated for the long term (10 years) given the higher risk premiums. Here, the fact that you get a higher interest rate in the short term (2 years) indicates an anomaly that can predict a recession.

Chart
Data by YCharts

The resulting market pressure was not limited to risk assets or equities and also affected the bond market, with the iShares Core US Aggregate Bond ETF (AGG) falling nearly 18%. last year, as shown in the table below.

While bond prices have fallen across the board, yields have conversely risen. So credit or corporate bonds now compete with the US Treasury, so when you lend money to the government (which is safer than lending to private corporations) you get returns higher than 3.5% against less than 2% last year. An example is the iShares iBoxx $Investment Grade Corporate Bond ETF (LQD) which yields 3.28% and has to compete with the Vanguard Extended Duration Treasury ETF (EDV) which offers returns of 3.56% and billing fees of just 0 .06%.

In these unprecedented conditions and for those looking for better returns, the PFF paying 5.45% is starting to make sense for investors looking for income.

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Comparison between different bond asset classes (Looking for Alpha)

However, in this space, the preferred shares compete with the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) as shown in the table above, by offering a yield of 5.24%. However, high-yield securities are also referred to as junk bonds and, depending on the severity of credit conditions, can be subject to large market fluctuations, putting an investor at greater risk of default ( or loss of his investment) than to an investor. higher-rated or higher-quality debt securities.

Risks and Mitigation Measures

Nevertheless, investors are reminded that in the event of liquidation, when a company’s assets must be auctioned off to pay off creditors, bonds take precedence over stocks, or even preferred stocks. For this reason, the preferred and hybrid securities held by PFF fit better into a portfolio as a diversifier from fixed income securities. For example, holders of investment grade or treasury bonds wonder where to invest their money after the market goes down.

At this point, it is important to point out that hybrid securities such as convertible bonds tend to offer a combination of debt and equity characteristics. As a result, their value is skewed towards the price action of the stock into which they are convertible, which in turn implies that there are risks of capital depreciation, especially when markets are volatile. Now, this can be mitigated to some extent by PFF issuers using preferential treatment for “capital”, namely by not calling them (redeeming them) when rates fall. This can be likened to sacrificing higher dividend yields for capital gains.

To illustrate my point, I make a comparison with the Invesco Preferred Portfolio ETF (PGX) which pays a higher dividend yield of 6.22% and only allows a credit rating by Fitch ranging from AAA ( highest) to D (lowest). On the other hand, PFF held 20.84% ​​of unrated bonds as of October 19, which explains why SA attributes a less favorable risk profile to it than PGX.

However, in practice, the Invesco ETF has been more volatile than the PFF since 2008, as shown in the chart below, this period including the Great Financial Crisis and the Covid stock market crash. Thus, PGX (in orange) underperformed PFF (in blue) by more than 12% despite its higher quality assets.

Moreover, a comparison of total returns which includes dividend payments in case these are reinvested and included in the price performance, shows that the iShares fund with a performance of 68.34% beat its counterpart Invesco by more 30% since 2008.

Chart

Y-Charts (Comparison PFF and PGX for price performance and total returns)

So over the long term, PFF may have had low dividend-yielding monthly distributions, but conversely suffered less capital depreciation and delivered better total returns.

To be realistic, investors will also note that this is not a similar comparison as the two ETFs track different indices, with PFF tracking the ICE Exchange-Listed Preferred & Hybrid Securities Index while it is the ICE BofAML Core Plus Fixed Rate. Preferred Securities Index for PGX. Additionally, with assets under management of over $14.32 billion, despite only launching a year earlier in 2007, PFF has seen much higher levels of inflows than PGX with $5.12 billion.

Then, for those who wish to invest, I try to plot the evolution of the prices.

The way to go

First, since preferred shares pay dividends, their value is particularly sensitive to higher interest rates. Therefore, while the U.S. Central Bank has aggressively hiked rates, the allure of PFFs has faded for income seekers and that is likely to continue this year as it remains a hawkish Fed with a mandate to controlling inflation. So, from 3.08% currently to a likely target of 4.5% to 4.75% by spring 2023, it is probably futile to “hope” for a break in interest rate hikes in 2022. However, as we approach 2023, global economic and geopolitical factors will increasingly play a role in determining monetary policy actions, including the effect of a strong dollar on the rest of the world.

Second, the preferred and hybrid stocks held by PFF are also influenced by the performance of the stock market. Today, the ETF is heavily weighted towards financial services at 46%, including banking and insurance, followed by electric utilities at 12.2% and REITs at 11.8%, as shown below. -below.

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Sector exposure – 06/30/2022 (iShares)

Third, with such a high exposure to Financials, as shown in the orange chart below, PFF’s share price was heavily skewed towards this sector, as shown in the deep blue chart, but the decline was partially mitigated by exposure to the utilities sector (pale blue graph) which was relatively untouched by market turmoil with a year-over-year loss of just 4.29%.

Chart

Comparison of total returns (Y-Charts)

Fourth, with the U.S. consumer remaining resilient amid slowing growth, lenders JPMorgan (JPM), Bank of America (BAC), and Wells Fargo (WFC) managed to increase its revenue and profit margins in the third quarter of 2022, as it was able to lend more money to its customers.

Today, rising interest rates are benefiting large banks, especially those with larger retail operations, but their stock prices have not been favorably impacted as the overall economic climate remains gloomy. Thus, Goldman Sachs (GS) analysts are neutral on the financial sector. Additionally, they are also neutral on real estate and utilities, while reducing exposure to technology.

Conclusion

Therefore, with a combined 70% exposure to the financials, real estate, and utilities sectors, PFF stock price might find some support around the $30 level. Additionally, scoring a “B” for the asset flow metric means there is more money coming in than going out of the fund.

On the other hand, there could be volatility with interest rate decisions scheduled for the first week of November due to the Fed’s aggressive approach. In this regard, the momentum indicators show further decline, perhaps to the $28 support level last seen in the spring of 2020.

Therefore, considering the points above, those primarily looking for predictable cash flow as part of a fixed income diversification strategy may choose PFF, which pays monthly distributions. Thus, for the same amount invested, the PFF provides a higher income than investment grade, junk or treasury bonds according to the table above.

Plus, unlike common stock, PFF holdings have preferential rights to dividend distributions, meaning that in times of financial stress, you have a better chance of getting paid. Moreover, with economic uncertainty, it is better to take refuge in the stability of preferred shares than to hope that companies will increase dividends on common shares. Finally, the iShares ETF has a history of better capital preservation.

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