US Preference Shares

[oldgamerz]

So I find my portfolio is choc full of UK preference shares (80%). I would be very interested if other fools could share their allocation, in prefs, bonds and equities…?

With 2026 fast approaching I am looking to diversify, but other than Co-Op & IPF I can’t find much of a comparable yield?

Would welcome any thoughts on my allocation and any experience of US Preferred's liquidity..

htxxs://stockmarketmba.com/listofpreferredstocks.php

Anyone see anything interesting in there?

[88V8]

So I find my portfolio is choc full of UK preference shares (80%). I would be very interested if other fools could share their allocation, in prefs, bonds and equities…?
With 2026 fast approaching I am looking to diversify, but other than Co-Op & IPF I can’t find much of a comparable yield?
Would welcome any thoughts on my allocation and any experience of US Preferred's liquidity.

Hello and welcome.

I sold most of my Prefs a while ago perhaps foolishly fearing that there might be some skullduggery on the part of issuers as 2026 approaches. Now I have only AV.A/B, BP.A/B, BWRA, ELLA, GACA, NWBD.

Overall Fixed Interest is about 30% of our account, HYP equities c40% and ITs around 30% although that's just a rough eyeball and it depends if you're talking income or capital as nearly all my pot is income-facing.

In FI, I also hold 44VG, 66WS, BOI, ENQ2, IPF3, MBSP/R. I held NATW until last week.

There are some Investment Trusts that lean towards FI, and I hold BIPS, NCYF, SHRS, also MCT which gives some indirect exposure to Canadian Prefs.
There seems to be quite a thriving Prefs market in Canada, but as I know nothing about it or the regulatory environment I have no direct holdings, and for the same reason, sorry, no idea about the US.

V8

[Gan020]

So I find my portfolio is choc full of UK preference shares (80%). I would be very interested if other fools could share their allocation, in prefs, bonds and equities…?

With 2026 fast approaching I am looking to diversify, but other than Co-Op & IPF I can’t find much of a comparable yield?

Would welcome any thoughts on my allocation and any experience of US Preferred's liquidity..

htxxs://stockmarketmba.com/listofpreferredstocks.php

Anyone see anything interesting in there?

With 80% in pref shares you have considerable linked reward/risk

I am:
2% cash
2% building society FSCS guaranteed bonds
2% equities
3% prefs/PIBS
30% bonds
60% bond/debt funds

Currently I have little to no interest in US shares or debt of any type unless it is hedged for me as I don't want to carry the exchange rate risk. (Ask me again when and if cable ever hits 1.40) In addition the not inconsiderable in percentage terms fx charges from my broker makes non Sterling purchases less attractive.

[Pendrainllwyn]

80% in prefs. That is high. I have bought and sold some US prefs and don’t recall issues with liquidity. I reduced my holdings as interest rates started to rise. I also incur 30% withholding tax on my dividends so I felt there was better value for me elsewhere.

Pendrainllwyn

[oldgamerz]

Hi

Thanks all, those allocations to prefs are much lower than I expected going by the chatter here - I was of the impression fools were more heavily allocated to prefs.

I’m looking for yields in the 5.5 -> 6.5 % to achieve retirement targets. Of course this is useless if I end up with capital loss. Can these yields be achieved without the likes of prefs?

Hopefully more fools will reply with their allocations as it would be great to form a consensus type of picture.

Thanks again for your replies.

og.

[tincture]

Currently
20% Prefs - (NWBD, GACA) (based on IMHO least likely/able to redeem/return at par due to prospectus terms and public statements etc...)
20% PIBS - (MBSR, WBS)
50% Stocks - (Mostly trackers, FTSE100, S&P500, Vanguard Whole World, and few single punts)
10% Bonds - (Coop, Enquest)

But this has very much organically grown - I never sat down to plan this allocation.
I had higher %prefs at the turn of 2022 but participated in the Lloyds tender and sold most others, before buying back in recently.

Re USD prefs I traded NatWest and Lloyds USD prefs after the GFC (long since redeemed/cancelled)
Spreads in those much much tighter and very easy to trade.

[oldgamerz]

Thanks.

Interested in that like a lot of fools you hold NWBD, it is my biggest individual holding - having held it on and off since it was mentioned on TMF around 2008/09.

A PIB share is something I have never held, the yields are certainly appealing to me. How does one go about comparing the likes of GACA, ELLA, LLPC against some of the popular PIBs ?

I presume PIBs do not have 2026 on the horizon?

All comments appreciated.

[Alaric]

I presume PIBs do not have 2026 on the horizon?

It should be PIBS as Permanent Interest Bearing Share. These were offered by mutually owned Building Societies as a means of raising capital and as a retail product, Outside of Nationwide, most of the remaining Building Societies are relatively small. The larger ones demutualised, converted to banks and for the most part were swallowed by larger organisations.

I'm not sure what if anything happens in 2026 when the rules for solvency capital change.

[88V8]

A PIB share is something I have never held, the yields are certainly appealing to me. How does one go about comparing the likes of GACA, ELLA, LLPC against some of the popular PIBs ?

There was a bit more about PIBS here. As commented there, most of the issuers, albeit of some quality are relative tiddlers compared to Lloyds, Aviva.

Your target yield... 5.5/6.5% ... this being the Bonds board is naturally populated by Bonds bugs, but there are other ways .. the ITs which I mentioned yielding...
MCT a modest 4.4%
SHRS a sedate 5.1%
BIPS a middling 6.6%
NCYF a stonking 8.4%...
could be blended to produce a decent return.

And there are income shares, such as this HYP portfolio being cooked up over on the HYP board, blended yield 6%.

If you wish to confuse yourself further there is always the Investment Strategies board.

V8

[hiriskpaul]

I have held USD prefs (they call them preferreds) in the past, but all of mine have been called, a few sold. They are frequently callable by the way, so don't assume you have a bargain if you spot a high yielder trading near par! Make sure you carefully read the prospectus for any you buy.

[oldgamerz]

Thanks

[flyer61]

In my SIPP I hold PFF and PGX. They are both ETFs with a bent for US financial prefs more so PFF. Pay monthly USD dividends which has been very useful

The problem, you cannot buy them anymore due to EU regulations that we have yet to get rid of. I would buy more if I could.

[oldgamerz]

Thanks, that is interesting, what is the yield? Does the price rebase every month or qtr?

[flyer61]

Yield is circa 5.5% and it is traded daily.

[oldgamerz]

Thanks again, albeit a Saturday morning I entered the ticker into AJ Bell which brought the correct security up…..Will see what it says during market hours, presumably it will refuse to deal if they are blocked as you say.
Is this restriction due to lift post brexit?

[flyer61]

Good question and I will be interested to see how you get on.

[hiriskpaul]

Thanks again, albeit a Saturday morning I entered the ticker into AJ Bell which brought the correct security up…..Will see what it says during market hours, presumably it will refuse to deal if they are blocked as you say.
Is this restriction due to lift post brexit?

There have been consultation on this, included within other regulatory changes. However, much of the EU PRIIPs regulations were driven by our very own BoE/FCA, so we will have to see whether there is push back from them over the proposed changes. If anything, the rest of the EU often pushed for lighter regulation than us, so it could go the other way!

[oldgamerz]

flyer61

yes you can buy the us etfs with ajbell if you are a professional investor, 2 of the following must apply, 500k portfolio, 1 yr of very relevant industry experience, history of large trades over 4 quarters …dont know what large is…