A couple pref shares

Gilts, bonds, and interest-bearing shares
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Joined: November 5th, 2016, 12:54 pm

A couple pref shares

Postby AdamB » December 26th, 2016, 6:53 pm


I was looking today on fixedincomeinvestor at the yields on prefs and retail bonds as I have some extra cash in my SIPP which needs to find it into a fixed income home. The yields on both the Aviva and standard chartered prefs (of over 6%) are acceptable to me from a simplistic return perspective however I wanted to see whether anyone on here had reviewed them in detail and aware of any other features of the which are less attractive.
Any views on these two appreciated.

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Re: A couple pref shares

Postby hiriskpaul » December 28th, 2016, 4:49 pm

I mainly hold bank prefs rather than insurers, but hold some Aviva (GACA) and Ecclesiastical (ELLA) for diversification. The Aviva prefs are cumulative, but the Standard Chartered prefs are also sort of cumulative in that if dividends are not paid new prefs are issued instead - nominal value of 1.25 times the skipped dividend. This and the blocker on ordinary dividends makes it most unlikely the dividends will not be paid. They paid throughout the financial crisis and through the recent difficulties.

STAB/STAC currently yield 6.5% based on current prices and adjusting for accrued dividends and stamp duty, compared to only 6.1% for GACA. As such I would go for STAB/STAC, unless you want the diversification of the Aviva prefs. Alternatively NWBD is I think the better purchase right now with a yield of 6.7% provided you can stomach the risk around RBS/NatWest. NWBD has similar cumulative features to STAB/STAC and is unlikely not to be paid unless hit with truly horrific fines from US regulators, etc.

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Re: A couple pref shares

Postby MartynC27 » December 28th, 2016, 6:53 pm

Can anyone advise on the best way of holding Preference Shares.

I have an ISA account on the Best invest platform which does not appear to have any Preference Shares available on the platform. I know the HL platform holds preference shares but I did want to pay another annual holding fee to hold them.

Does anyone know of a platform which holds preference shares and does not charge an annual holding fee ?



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Re: A couple pref shares

Postby stevensfo » December 28th, 2016, 9:22 pm

Which Pref Shares?

I've never had a problem with them.

AJBell have them all listed.


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Joined: November 6th, 2016, 2:15 pm

Re: A couple pref shares

Postby Laughton » December 29th, 2016, 10:26 am

No problem holding them in AJBell/YouInvest nor iDealing.com

Both very reasonable dealing charges and IDealing.com also has a £5 per quarter admin fee (that's based on per account not per holding).

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Re: A couple pref shares

Postby AdamB » December 29th, 2016, 10:06 pm

Thanks for the reply hiriskpaul (is your username appropriate if you hold fixed income investments?!?). I'll probably add some Standard Chartered prefs to my pension in the next few days

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