FFN and FTN Cut Their Distributions

In checking my portfolio for 2026, I had a pleasant surprise. It seems my portfolio is up 2.35% so far this year – as of January 26. That’s great! That’s significant.

Looking at the numbers in more detail, two stocks are down the most. North American Financial 15 Split Corp. (FFN.TO) and FTN preferred shares are down 1% to 2% year to date.

In looking into it a bit more, I can sort of see what’s happening. Both funds have cut preferred share distributions.

FFN cut its distribution from 8.75% to 7.50%. While FTN went from 8.50% to 7.25%.

There are a couple of ways to look at this. By lowering the distributions, I can now compare that rate of return to US treasuries or other bonds. It’s still a bit higher than those, but with a smaller gap, it might not be worth the risk of investing in banks (with leverage) instead of going unlevered. It also increases the gap with what stocks have been returning.

Am I safer investing in banks (with leverage!) at 7.25%, or could I get the S&P 500 at 10% (with more risk)?

The value of my FFN and FTN holdings is about 12% of my portfolio, so the decision is significant.

Of course, a 1%-2% decline is not a great fall, and one could say the damage has been done. I can still collect that 7.25%/7.50% and sleep well at night.

I’ll have to sleep on it. As well, I have a general unease about the US stock market, given the ongoing uncertainty in politics, the economy, and the streets of the US.