A confluence of ex-dividend dates with relatively rapidly rising interest rates is forcing many, many preferreds and baby bonds lower by 25 or 50 cents this week–some much more.
With the 10 year treasury trading around 1.89% after being at 1.43% just 10 days ago you might expect some give back on the easy capital gains we have all garnered recently. Personally our accounts are off about $1,000 bucks this week–no big deal–mostly because we have such a high cash position.
I am personally watching certain quality issues–for instance the AllianzGI Convertible and Income Fund 5.625% preferred (NCV-A) is trading down 60-65 cents in the last 2 days (about 1/2 is due to ex dividend) bringing the current yield to 5.41%. I have more than a full position, but could add a little more.
Some of the other big losers simply are some quality issues that were getting ahead of themselves such as Digital Realty 6.35% preferred (DLR-I) which had traded up to $27 a couple of days ago and now with the combination of ex-dividend and rising interest rates have knocked it down to $25.93 It should be noted this issue has early redemption available in 11 months and many times when an issue is trading with such a large premium to a $25 redemption once it gets closer to the potential redemption is will fall on ex-dividend date and never recover.
The preferreds list showing losses can be seen here–maybe it is a shopping list?