PFD - LDP: Performance Is Interesting But There Could Still Be Risks

2024-04-03 14:57:41 ET

Summary

• Cohen & Steers Limited Duration Preferred and Income Fund, Inc offers a 7.85% yield, which is lower than many of its peers.
• Preferred stocks have been gaining year-to-date despite falling bond prices and yields. This is highly unusual and could pose a risk for investors.
• The LDP closed-end fund's shares have outperformed its portfolio, but investors should consider the fund's valuation and potential risks before investing.
• The fund has failed to cover its distribution for two straight years, but it is probably okay unless the Federal Reserve surprises the market.
• The fund's valuation is not as attractive as it used to be, but it is still trading at a discount.

The Cohen & Steers Limited Duration Preferred and Income Fund, Inc ( LDP ) is a closed-end fund, or CEF, that income-focused investors can purchase as a means of pursuing their goals. The fund does reasonably well at this task, as it currently boasts a 7.85% yield. This is a higher yield than many other closed-end funds possess, but it is not particularly high in comparison to the yields that are offered by some of the fund's peers. Morningstar classifies the Cohen & Steers Limited Duration Preferred and Income Fund as "Fixed Income-Taxable Preferreds."

Here is how the fund's yield compares to that of some other funds with the same classification:

For further details see: