Portfolio SpecialistMore by this author
5 minute read
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.
Market developments at Credit Suisse
The government-backed deal for UBS to acquire Credit Suisse will trigger a complete write-down of the nominal value of all Credit Suisse additional tier 1 bonds. We believe Credit Suisse is most likely to be an isolated incident, while we have been reducing our portfolios’ exposure to Credit Suisse significantly over the past several months.
Addressing developments at regional banks
The U.S. government's actions to minimize risk across the banking industry following the events of Silicon Valley Bank and Signature Bank have strong potential to prevent further bank runs and subsequent bank failures. But scrutiny of some regional banks will persist.
Citywire Selector: Fed insider-turned-bond boss backs central banks to beat inflationMarch 2023 | 1 min
Head of Fixed Income and Preferred Securities Bill Scapell spoke with Citywire Selector about Cohen & Steers’ preferred securities strategy and his fixed income outlook as central banks battle inflation.