The Cohen & Steers Global Preferred Securities Fund aims to provide high current income and capital appreciation by investing in a global portfolio of retail exchange-listed and institutional over-the-counter preferred and debt securities.
Preferred securities, also known as capital securities or hybrids, act like bonds by paying a fixed or floating rate of income.
However, they are actually a form of equity for issuers and lie between common stock and senior debt in a company’s capital structure and are generally issued by large companies with relatively stable cash flows, such as banks, insurance companies and utilities.
According to Cohen & Steers, they offer attractive yields in the current high-grade fixed income market, from sectors that are generally less represented in other fixed income strategies, potentially helping to improve portfolio efficiency.
Distinctive solution
“The launch of the fund is the latest step in Cohen & Steers’ commitment to bringing our core competencies in alternative income and real assets to European and other investors worldwide,” said Robert Steers, the firm’s chief executive.
“With the outlook for fixed income uncertain, demand for alternative income strategies is rising and the fund offers investors a distinctive solution to meet their portfolio needs.”
Lead fund manager William Scapell added: “After a 35-year bull market in bonds, investors must now contend with two challenges: how to earn income with yields still hovering near historic lows, and how to protect against a rising interest-rate environment.
Cohen & Steers believes the Sicav Global Preferred Securities Fund offers a unique solution to both of these issues.
“Based on expectations of rising rates globally, our focus is primarily on attractive income opportunities in securities with lower durations, which have been historically less sensitive to changes in interest rates. As we have often seen, high income and wider credit spreads can have a smoothing effect on total returns during periods of volatility,” Scapell said.
