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
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.
Why passive preferred ETFs miss market opportunities
The market has evolved considerably, but passive ETFs have not adapted. We believe active strategies that invest across the entire market are a better solution.
Tariffs, volatility and the opportunity in preferred securities
In a market shaped by tariffs and volatility, we explore how preferred securities are holding up—and where we see opportunity ahead.