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Preferred Securities
Cohen & Steers Preferred Securities Strategy employs a value-oriented investment approach focused on credit quality and company fundamentals. Our Preferred Securities investment team brings an average of 11 years of investment experience.
Objective
Cohen & Steers Preferred Securities Strategy seeks high income and capital preservation by investing in issues believed to be undervalued relative to credit quality and other investment characteristics.
Investment approach
Cohen & Steers Preferred Securities Strategy seeks to generate above-average income utilizing the entire preferred universe including both traditional and hybrid preferred securities. The Strategy invests predominantly in fixed rate U.S. dollar denominated preferred securities and may invest in floating rate preferred securities. The portfolio invests in many sectors including banking, insurance, real estate, and utilities and in obligations of foreign as well as domestic issuers. This broad investable base allows us to diversify portfolios across a wide range of sectors and issuers. Since the preferred securities universe is about 75% investment grade, credit quality can be tailored to meet an investor’s requirements.
We can also customize portfolios for clients to maximize tax efficiency by investing in preferred securities that:
Qualify for the new 15% qualified dividend income (QDI) tax rates available to individuals;
Qualify for up to a 70% dividend received deduction (DRD) available to institutions; or
Pay only interest income for U.S. Tax purposes to avoid dividend withholding taxes applicable to foreign investors.
Portfolio characteristics
Typically 50-80 holdings
Diversified by issuer, credits and sector
Maximum security weight of 5%
Team
William F. Scapell, CFA, is a senior vice president and leads the firm's preferred securities investment and research team. He manages a team of two credit analysts and a support analyst who cover a wide range of issues, including preferred, debt, convertible debt and convertible preferred securities and draws off of the firm’s deep research resources in the utilities, real estate and large cap value investment arenas. The firm employs a trader dedicated to the Preferred Securities Strategy.
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