Preferred Income
The Preferred Income strategy seeks current income as its primary objective by owning a portfolio of preferred stock with an overall issuer investment-grade rating. Preferred stocks are a hybrid investment that combines features of equity and fixed income. Like a stock, most preferred stock pays a dividend that is taxed as a qualified dividend; however, like a bond, they are sensitive to interest rate movements and changes in credit quality.
Portfolio Managers
Tom Kaiser, CFA, CPA
Inception Date
Preferred Income SMA Strategy Highlights
Seeks potential income from higher-yielding preferred stocks and capital securities, some of which may be U.S. tax-advantaged.
Active management of this SMA to potentially exploit inefficiencies such as credit quality, interest rate structure and call risk.
Diversification from traditional equity and fixed income strategies.
Preferred Income Portfolio Construction
1st | Macro Outlook
Develop views about the economy, markets, and interest rates.
2nd | Screen
Filter retail and institutional for yield, duration, liquidity, credit quality, and coupon structure.
3rd | Decision
Select 25-30 stocks from the screened holdings based on pricing and attractive opportunities which can include undervalued sectors and/or companies. Positions are reviewed regularly.