ECCW - Preferred Market Weekly Review: Higher-Quality Yields Rise From The Dead

• We take a look at the action in preferreds and baby bonds through the fourth week of January and highlight some of the key themes we are watching.
• Unsurprisingly, the preferreds sector followed most other income sectors lower this week and remains around 2% down on the month.
• Higher-quality sectors like banks and insurance are now offering yields near 5% - we look at those that combine decent quality and a CMT fix/float structure to manage duration.
• Within our High Income Portfolio we are using our more stable preferreds allocation to opportunistically reallocate to CEFs that have suffered greater drawdowns.
• We are also taking the opportunity to improve the yield profile by rotating within securities of a given issuer such as the new Eagle Point Credit Co. notes, yielding 5.9%.

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