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
Moody’s methodology shift reshapes preferreds market
Moody's methodology change has led to increased issuance of hybrid securities, creating opportunities for investors with attractive yields, reduced extension risk, and greater diversification in the preferred securities market.
3 Reasons to own preferred securities today
We believe an exceptional buying opportunity for preferred securities may exist today.
Capital Market Assumptions: Expectations for the next 10 years amid a generational change for markets
We expect higher fixed income and real asset returns alongside lower U.S. equity returns for the next decade.
