3 reasons we think preferreds are now attractive

 

Allie Quine, CFA

Portfolio Specialist

More by this author

5 minute read

August 2022

Share

Sign up to get our insights
Subscribe

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
Author Profile Picture

Allie Quine, CFA CFA, Vice President, is a member of Cohen & Steers’ Portfolio Specialist Group.

FURTHER READING

4 Reasons to own preferred securities today

4 Reasons to own preferred securities today

June 2023 | 6 mins

We believe an exceptional buying opportunity for preferred securities may exist today, for several reasons: 1. Current discounts to par value represent uncommon value 2. High-quality preferreds offer some of the highest yields in fixed income 3. Performance historically has been strong following market corrections 4. An end of Fed rate hikes is a possible catalyst for price appreciation

Preferred securities: Resetting for a new cycle

Preferred securities: Resetting for a new cycle

June 2023 | 25 mins

Recent bank turbulence and the end of the Fed’s rate-hiking cycle create what we believe may be an exceptional buying opportunity for preferreds.

Three tax-smart income alternatives

March 2023 | 20 mins

Strategies with inherent tax efficiencies may help investors diversify sources of income and potentially keep more of what they earn.

2381402