Cohen & Steers has today (3 March) launched a Short Duration Preferred Income SICAV that will invest in preferred securities with a target duration of less than three years.
Preferreds are technically equities, but act like bonds in that they pay a fixed or floating rate of income.
This new fund will be Cohen & Steers’ second venture into the asset class having launched its $342m Preferred Income fund in 2017. It is up 34% since then versus a 13.9% return from its peers in the IA Specialist Bond sector.
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One of its managers since inception, Elaine Zaharis-Nikas, will run the new Short Duration Preferred Income portfolio.
Zaharis-Nikas said preferreds have traditionally been issued by highly-regulated sectors such as banks, insurance and utilities, but are becoming more widely adopted.
“Recent methodology changes from select rating agencies have spurred new issuance from non-financial companies, improving the diversification of the preferred securities universe,” she added.