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My Worst Performing Holding

It seems weird that the holding which has performed the worst for me over the last year is the one I am most comfortable holding forever–well not forever, but for the time being as long as interest rates remain ‘tame’.

Tri-Continental Corporation (TY), a closed end fund (CEF) has a $50/share preferred which was issued in 1963–the coupon is 5% (or officially it is a $2.50 preferred), but at the current price of $43 the current yield is 5.81%. Not what you call a high yield in these times of HIGH YIELDS, but in my mind the most solid preferred available. The issue is not rated, but when you have a 4000% coverage ratio who needs a rating (all closed end funds must maintain at least 200% coverage on their ‘senior securities’).

TY has net assets of $1.6 billion and over the last 10 years the common shares have returned 10.6% annually. Here is their fact sheet. Just a simple stock and bonds CEF–nothing fancy.

This issue is redeemable at anytime at a call price of $55/share so I don’t have to worry about it being redeemed–just keep drawing the dividend. My share price is down 8% from my average buy price, but I have held it for a long time so I have a positive total return.

The issue is here.

The ticker on Fido it is TYPR on eTrade it is TY.PR – some others have it as TY- or TY-P. If you can’t find it try spelling it out in your symbol box (Tri-Continental Corp).

This is pure ‘sock drawer’ material–at this price 5.81% is not a bad return for the level of safety. One must be patient if buying as the average daily volume of the preferred is very minimal-922 shares per day according to Yahoo.

If you are highly sensitive to share price movements you don’t want to hold this or any low coupon issue when interest rates are racing higher. On the other hand the level of safety certainly provides for a good nights rest.

8 thoughts on “My Worst Performing Holding”

  1. First preferred I ever bought over 20 years ago. Still own too.
    Hardest part is buying more at my price. GTC play. Doesn’t trade much.
    $55 I’ll take it.

    1. King – yes not too liquid. I have held some shares for quite a few years–but certainly not 20.

  2. Tim, I know, it feels weird to have your safest name lose so much.

    Lol. This is how us bond investors feel, 2022/23 has been the worst stretch in recent history.

    The good news is that it sets us up for fantastic returns going forward, assuming we live long enough 🤣.

    I have been nibbling on the junkiest portion of the Cusip based CEF prefs, NCV AND NCZ/A.

  3. Have been building a position in TYPR for months. I figured this was the best opportunity I was ever going to get. My other accumulation target has been GDVprK which has been available under $19.

  4. Have TY-Pfd on watch should y/end volatility give an opportunity, bond like ..even 5.81% to me is great, as prev mentioned I am not bullish on cash rates. Slowly moving ‘cash’ at 5% in Fido sweep to a little more risk in diversified small bites when opportunity knocks. B

  5. TY- is definitely one of those preferred that does not follow any rules. I love super safe preferred but it just never made sense for me to buy. Yet….

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