WHY COHEN & STEERS

History of success in full market cycles

Experience managing preferred securities across various interest rate and credit cycles

Proprietary tax analysis

Identifies securities that distribute Qualified Dividend Income (QDI) vs. interest income

Global reach with local knowledge

Experienced analysts and traders in the key markets including New York, London and Hong Kong offer local knowledge and real-time decision making

WHY PREFERRED SECURITIES

Higher income rates

Preferred securities tend to offer higher yields than similarly rated bonds

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Large global institutional investment universe

We seek to add value by providing access to the $1 trillion, over-the-counter, preferred securities market. As well as securities of high quality and historically stable companies.

Diversification from stocks and bonds

Preferred securities may offer a low correlation of returns with other areas of the stock and bond markets

The Cohen & Steers Preferred Securities Strategy seeks to generate above-average income and total returns compared with preferred market benchmarks. We believe active management can enhance the investment characteristics of preferreds.

We believe income is an important component of preferred returns, and it is the primary focus of our investment strategy. While maintaining a high income rate, we seek to dampen the effects of credit and interest rate risks via superior security selection and active management.

As more investors turn to preferred securities for higher yields, many are limiting their selection to direct allocations to passive ETFs or investment-grade $25 par securities. A different approach is through an active manager with the skills and resources to utilize the entire preferred securities market, including:

 

  • Below-investment-grade preferred securities
  • Over-the-counter preferred securities
  • Foreign-preferred securities

FEATURED INSIGHT

A primer on investing in preferred securities

At a time of scarce yields and growing tax challenges, preferred securities may enhance after-tax income and return potential, while broadening diversification with other fixed income investments.

September 2021 | 3 mins

WHY INVEST WITH US

Delivering value to our clients

As an industry leader in real assets and alternative income, Cohen & Steers is focused on delivering superior risk-adjusted returns and income. Our global footprint gives us access to a wide range of institutional securities, including nonregistered transactions involving non-U.S. issuers that are placed exclusively outside the United States. Together, our experience and global capabilities provide the insight and versatility to adapt to changing economic environments and opportunities.

PORTFOLIO MANAGEMENT

An experienced team

William Scapell, CFA

Head of Fixed Income and Preferred Securities

31 years of experience

Elaine Zaharis-Nikas, CFA

Senior Portfolio Manager, Fixed Income and Preferred Securities

26 years of experience

Jerry Dorost, CFA

Portfolio Manager, Fixed Income and Preferred Securities

20 years of experience

Robert Kastoff, CFA

Portfolio Manager, Fixed Income and Preferred Securities

14 years of experience

+3 analysts and associates

Preferred securities have historically offered the highest yields in the investment-grade market and regulatory drivers are continuing to improve issuer fundamentals and issuer quality.

We believe that research and a disciplined investment process can add significant alpha to preferred security returns because preferreds are a complex, underfollowed fixed income asset class.

We evaluate securities and our portfolio from the standpoint of total returns and potential volatility and seek the best risk-adjusted mix.

Our commitment to investment excellence is built on a culture of continuous improvement, which includes our approach to integrating environmental, social and governance factors.

Our proprietary approach to integration and engagement, combined with the framework established in the Principles for Responsible Investment Initiative (a United Nations-backed initiative focused on ESG issues to which we are a signatory), helps promote transparency and enhances our ability to deliver more consistent, attractive risk-adjusted returns.

APPROACH

Our investment process

We utilize various model-based valuation techniques to search for value within the preferred securities universe, which consists of more than 1,000 securities.

Fundamental research
Our fundamental analysis of industry sectors, issuers and individual issues enables us to make decisions regarding relative value. We employ traditional credit metrics, assess companies’ more subjective characteristics (such as management profit incentives) and place great emphasis on industry and regulatory trends.

Macro-overlay
Our views on the likely direction of interest rates and credit spreads, together with historical assessments of the broad market’s valuation, help us set portfolio direction and discern value.

Portfolio construction
Important portfolio construction goals include overall portfolio liquidity and diversification. We pay close attention to the impact of our investment execution and to potential exit requirements.

Active management
Although our models and valuation process results identify the relative value of the securities we cover, changes in our macro views or fundamental credit opinions can drive sell decisions, as can risk management.

Unlocking value: What end of rate hikes may mean for preferreds

December 2022 | 19 mins

With inflation peaking and recession looming, we anticipate a strong vintage year for fixed income—with declining rates potentially leading to outsized returns and high tax-advantaged income from preferred securities.

A portfolio managers perspective Opportunities in listed infrastructure

ESG: opportunities and challenges within real estate

November 2022 | 6 mins

Environmental, social and governance issues present demonstrable risks and opportunities for real estate. Khalid Husain, Head of ESG, and Jan Willem van Kranenburg, Senior Analyst, discuss how our integrated ESG approach at Cohen & Steers assesses and values these topics as part of our investment approach among different real estate sectors and companies.

Closed-end fund commentary 3Q 2022

October 2022 | 3 mins

Closed-end funds finished the quarter down following persistent inflation and continued talk of monetary policy tightening.

Institutional Investor: The Best Real Estate Returns Come After Recessions

October 2022 | 1 min

Head of Private Real Estate James Corl spoke with Institutional Investor for a feature story on our recent whitepaper and why an optimized real estate portfolio may require access to both listed and private markets.

With Intelligence: Cohen & Steers’ new private RE group eyes discounted retail, office

October 2022 | 1 min

Head of Private Real Estate James Corl spoke to With Intelligence about the Private Real Estate Group’s current market outlook and the opportunities that the team is looking at, including retail, surban office and housing.

Recession and the roadmap for listed and private real estate

September 2022 | 17 mins

We see an economic backdrop that will create an opportunity for strong vintage returns for both listed and private real estate. Both cyclical and secular shifts are likely to create investment opportunities, and we think allocating across both private and listed real estate will be critical.

Need to contact us?

We’d be happy to answer questions about our investment solutions or any corporate-related inquiries.