LDP: A Preferred Stock Fund That Deserves Its Name
2025-01-27 05:39:28 ET
Summary
- The Cohen & Steers Limited Duration Preferred and Income Fund offers a high yield of 7.63%, outperforming most preferred stock index funds but lagging behind other preferred closed-end funds.
- The fund's performance has been disappointing recently, underperforming the preferred stock index as well as some peers.
- The fund is almost entirely invested in preferred securities, which sets it apart from peers that invest in a mixture of preferred stock and corporate bonds.
- The fund primarily invests in preferred securities, with a low leverage ratio of 32.80%, making it suitable for risk-averse investors despite its lower yield.
- Currently trading at a 5.56% discount to net asset value, the fund is reasonably valued compared to its peers but has traded at better prices historically.
The Cohen & Steers Limited Duration Preferred and Income Fund ( LDP ) is a closed-end fund that provides a solution for investors who are looking to earn a very high level of income from the assets that they already possess. The fund manages to do pretty well at this task, as its 7.63% current yield is significantly higher than that of most preferred stock index funds. We can see that quite clearly here:
Index/ETF | Current Yield |
ICE Exchange-Listed Preferred and Hybrid Securities Index ( PFF ) | 6.19% |
ICE BofA Diversified Core U.S. Preferred Securities Index ( PFFD ) | 6.27% |
ICE BofAML Core Plus Fixed Rate Preferred Securities Index ( PGX ) | 5.87% |
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LDP: A Preferred Stock Fund That Deserves Its Name
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