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Search for an ETF or holding
Search for an ETF or holding
Updated 2mo ago.
Updated 2mo ago.
A preferred stock is a type of security that pays a fixed dividend and has priority over common shares for dividend payments and in the event of liquidation. In exchange, preferred shareholders typically have no voting rights and benefit less from the company's growth.
ETFs like CPD.TO (iShares S&P/TSX Canadian Preferred Share Index ETF) give you access to a diversified basket of Canadian preferred shares. These ETFs pay monthly distributions with yields typically between 4% and 6%. Preferred shares from major Canadian banks (RBC, TD, BMO) are among the most popular.
Preferred stocks sit between bonds and common stocks: more income than equities, but less growth potential. Their Canadian dividends are eligible for the dividend tax credit, making them more tax-efficient in a non-registered account compared to bond interest.