Preferred securities are a large and growing asset class that can offer valuable benefits for investors and issuers alike. Regulatory changes implemented following the global financial crisis helped increase the size and fundamental strength of this market. However, investing in preferreds comes with many inefficiencies. It takes the skill of an active manager to take advantage of these to deliver optimal outcomes for investors.
In this whitepaper, we explore how these hybrid securities can offer high after-tax income and portfolio diversification for investors. You’ll learn:
- How preferreds are issued, diversified, and rated
- How preferred yields and historical returns compare with alternatives in fixed income
- How a customized separately managed account can enhance the efficiency of preferreds