OCCIO - Preferreds Market Weekly Review: Turn To Institutional Preferreds Issuance Limits Retail Options

• We take a look at the action in preferreds and baby bonds through the last week of March and highlight some of the key themes we are watching.
• Preferreds joined the broader recovery this week across the income space, pushing March returns into the green.
• Issuers, particularly those in the CEF sector, have increasingly turned to the institutional market to issue new preferreds - an unfortunate but understandable outcome for retail investors.
• We discuss the price action in OZKAP - an example that combines a number of key market trends this year.
• Higher long-end rates remain a key risk - we prefer to tilt to higher-coupon preferreds as well as those with high reset yields.

For further details see: