The latest market drawdown has hit the preferreds market like a ton of bricks. Lower short-term rates have hammered fixed-to-float securities, while cyclical sectors like banks and REITs, which are heavily represented in the population, took a heavy brunt of an oncoming recession. Investors who thought they held relatively diversified portfolios may have been surprised by sharp and broad-based losses. In this article, we take a look at a number of portfolio dimensions that investors may be overlooking when constructing their preferreds portfolios.
Our takeaway is that investors should look beyond merely increasing the number