Canadian Preferred Shares Market Update: March 12, 2026

# Canadian Preferred Shares Market Update: March 12, 2026

Rate reset preferred shares outperformed today as markets digested steady US inflation data and rising geopolitical tensions.

Market Performance

| Index | Current Yield | Change |
|-------|--------------|--------|
| FixedReset Discount | 5.85% | +0.46% |
| FixedReset Premium | 5.95% | +0.25% |
| Perpetual Discount | 5.63% | -0.20% |
| Insurance Straight | 5.49% | +0.09% |
| SplitShare | 4.78% | -0.39% |

Rate reset shares led gains as investors positioned for potential rate increases amid Middle East tensions affecting oil markets.

Top Performers

| Symbol | Yield | Change |
|--------|-------|--------|
| BN.PR.T | 5.95% | +7.64% |
| ENB.PF.C | 6.03% | +3.83% |
| NA.PR.K | 3.92% | +3.36% |
| BN.PR.R | 5.77% | +2.82% |
| GWO.PR.Y | 5.50% | +2.50% |

Brookfield (BN) shares dominated the top performers list, with BN.PR.T surging over 7% on heavy volume.

Worst Performers

| Symbol | Yield | Change |
|--------|-------|--------|
| PWF.PR.T | 5.57% | -3.41% |
| CU.PR.J | 5.79% | -3.22% |
| SLF.PR.G | 5.70% | -2.52% |
| POW.PR.D | 5.72% | -2.20% |

High Volume Trading

Several issues saw significant institutional activity:

CIU.PR.A: 124,282 shares (CI Financial)

SLF.PR.D: 109,800 shares (Sun Life)

GWO.PR.N: 140,725 shares (Great-West Lifeco)

Regulatory Watch: AT1 Instruments Under Scrutiny

DBRS released a commentary on European banks' Additional Tier 1 (AT1) instruments, highlighting four potential policy responses:

1. Raise quantitative triggers
2. Remove contractual triggers (like Canada)
3. Tighten call/coupon conditions
4. Eliminate AT1 entirely

Australia announced in December 2024 it will phase out AT1 instruments by 2032, replacing them with CET1 and Tier 2 capital.

What this means for Canadian investors: Canadian preferred shares use a different regulatory framework without the same trigger mechanisms. This provides more stability but less downside protection compared to European AT1 structures.

Economic Context

US Inflation: 2.4% year-over-year (steady from January)

Core Inflation: 2.5%

Jobs: US lost 92,000 jobs in February, unemployment rose to 4.4%

Fed Meeting: March 17-18 - divided on rate cuts

The steady inflation reading reduces pressure on the Fed to cut rates aggressively, which benefits rate reset preferred shares that reset at higher spreads.

Looking Ahead

Rate reset preferred shares have been positioned to benefit from:

Higher for longer interest rate environment

Rising oil prices increasing inflation expectations

Attractive spreads over government bonds

Issues with reset dates in the next 12–24 months will be the first to reprice at these spreads; their reset outcomes are the segment to watch in coming quarters.