Broad fixed income markets have seen a substantial wave of repricing this year stemming from persistent inflation, interest rate volatility, and concerns around economic growth.
However, we believe there are three dynamics in the market right now that make preferreds attractive: Higher current income levels, healthy issuer fundamentals, and preferreds’ historical tendency to rebound following significant drawdowns.
ABOUT THE AUTHORS
Allie Quine, CFA CFA, Vice President, is a member of Cohen & Steers’ Portfolio Specialist Group.
FURTHER READING
Preferred securities offer high current income potential with tax advantages
Preferreds’ income rates compare favorably with other fixed income classes on both a pre- and post-tax basis.
Five reasons to consider preferred securities if you own municipal bonds
With many investors feeling the sting of taxes, municipal bonds aren’t the only option for tax-advantaged income. Preferred securities currently offer among the highest after-tax yields in fixed income, regardless of tax bracket.
3 Reasons to own preferred securities today
We believe an exceptional buying opportunity for preferred securities may exist today.