AlphaPro Management has unveiled an actively-managed preferred share ETF on the Toronto Stock Exchange.
The fund's investment objective is to provide dividend income while preserving capital by investing primarily in preferred shares of Canadian, and sometimes American, companies.
AlphaPro president Ken McCord says the move is motivated by the firm's belief that an active strategy can overcome many of the limitations found in trying to replicate a preferred share index.
He says that preferred shares also offer tax-efficient yields and lower volatility than common shares.
He adds: "For investors with a need for income and an appropriate risk tolerance, preferred shares can be a very effective solution."
The fund may also invest in fixed income securities of Canadian and US issuers, as well as Canadian equity securities and other ETFs that issue index participation units.
The Preferred Share ETF is sub-advised by Natcan Investment Management, which already manages the recently launched Horizons AlphaPro Corporate Bond ETF.
Natcan also manages more than $1bn in preferred share assets.
Two global vehicles
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Advisers do come out well
Will report to Mark Till