Top of the Morning: Preferreds - Sector update and outlook
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As we look towards year-end, Frank Sileo drops by the studio to provide a performance update and outlook for the preferred securities sector. We also spend some time highlighting positioning considerations within preferreds. Featured is Frank Sileo, Senior Fixed Income Strategist
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4 itemsTop of Morning: Preferred Securities - Performance update & outlook
Top of Morning: Preferred Securities - Performance update & outlook
Top of the Morning: Preferred Securities - Performance & positioning
The desk argues that the recent upgrade of the Preferred Securities sector to Attractive reflects a significant opportunity in the market, particularly in the $25 par retail preferred subsector. Per the full note, Frank Sileo highlighted the compelling features of this sector, noting potential tactical rebounds amidst a supportive interest rate environment. The desk also emphasizes the differentiating factors between institutional and retail preferreds, suggesting traders consider both options based on sensitivity to interest rates and yield levels. The current yield of around 7.25% for retail preferreds represents an attractive entry point given their reduced duration risk compared to alternatives.