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.

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PORTFOLIO MANAGEMENT

An experienced team

Elaine Zaharis-Nikas, CFA

Head of Fixed Income and Preferred Securities

27 years of experience

William Scapell, CFA

Senior Portfolio Manager, Fixed Income and Preferred Securities

33 years of experience

Jerry Dorost, CFA

Portfolio Manager, Fixed Income and Preferred Securities

21 years of experience

Robert Kastoff, CFA

Portfolio Manager, Fixed Income and Preferred Securities

16 years of experience

Raquel McLean, CFA

Portfolio Manager, Fixed Income and Preferred Securities

17 years of experience

+2 analysts and associates

PORTFOLIO SPECIALIST GROUP

Supporting our investment team and clients

Brian Cordes, CAIA

Head of Portfolio Specialist Group

27 years of experience

Allie Quine, CFA

Portfolio Specialist

10 years of experience

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.

Capital Market Assumptions

Capital Market Assumptions: Expectations for the next 10 years amid a generational change for markets

June 2024 | 22 mins

We expect higher fixed income and real asset returns alongside lower U.S. equity returns for the next decade.

What recent call and issuance activity say about preferreds

What recent call and issuance activity say about preferreds

May 2024 | 12 mins

An evolving market presents risks as well as opportunities for investors in exchange-traded preferred securities.

Preferred securities call alert

Preferred securities call alert – $10.7 billion reinvestment opportunity

May 2024 | 2 mins

Investors are facing new challenges as many of their single-issued preferred securities may be subject to call—including some that are trading above par and could lose value. Now may be the time to look beyond single issues to the added value of an actively managed portfolio.

3 Reasons to own preferred securities today

3 Reasons to own preferred securities today

April 2024 | 5 mins

We believe an exceptional buying opportunity for preferred securities may exist today.

Tax-smart income alternatives

Tax-smart income alternatives

March 2024 | 17 mins

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

Understanding quality, ratings and long-term compensation of preferred securities

Understanding quality, ratings and long-term compensation of preferred securities

March 2024 | 38 mins

Preferreds provide attractive income and total returns from high-quality securities; despite added risks, default rates can be lower than credit ratings suggest.

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