Opportunities in the preferred market

Brittney Van Calcar News

It is a very exciting time to be investing in fixed income (finally). Nominal yields across many of our asset classes have reached levels we have not seen in many years.

Preferred securities (PFDs) offer compelling diversification and income opportunities in today’s volatile interest rate environment. We see specific value in fixed-to-reset and fixed-to-float PFDs which have coupons that adjust higher at future dates if rates rise. PFDs are an asset class that is often misunderstood due to the various structures, retail-heavy buyer base, and trading characteristics, providing an abundance of alpha opportunities.

With yields and returns comparable to high yield fixed income, credit quality nearing that of investment grade credits, and low correlation with the fixed income and equity markets, today’s preferred securities have evolved into a distinct and attractive income-generating asset class, boasting a variety of structures and serving as a meaningful component of an investment portfolio.

Preferred securities are a specialty of Bramshill Investments, differentiating our firm from others in the fixed income investment management arena.

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