Written by David Fabian, March 13th, 2017
Preferred stocks offer the distinction of being unique hybrid instruments with qualities of both stocks and bonds. In that manner, they offer healthy dividend yields alongside a favored position in the capital structure of many companies that issue these securities.
The reason company’s issue preferred shares are to raise capital from investors that are seeking an attractive yield without adding traditional debt (bonds) that carry strict maturity dates and covenants. Preferred stocks can also be “callable” from the issuer, who has the right to redeem them at a certain price or time at their discretion. Read more
Written by David Fabian, February 17th, 2017
Love is in the air this Valentines week and many income investors are smitten with the returns of their high yield investments. The steady march higher in assets like junk bonds, preferred stocks, emerging market debt, and even leveraged closed-end funds has remunerated shareholders for their faith.
The poster child of this strength may well be the iShares iBoxx $ High Yield Corporate Bond ETF (HYG). This well-known fund, which invests in a passive index of high yield U.S. corporate debt, has gained more than 22% over the last year. That jump includes both price gains and income distribution over a 52-week period. It also bests every corner of the U.S. fixed-income sector map by a wide margin. Read more
Written by David Fabian, December 16th, 2016
Retired investors are often looking for core exposure in funds that demonstrate low costs and steady income. These two attributes are key to maintaining a correlation with the market, while creating a passive stream of dependable dividends to offset living expenses. One fund company that offers several different options in this arena is the iShares suite of ETFs from BlackRock. Read more
Written by David Fabian, February 19th, 2016
Preferred stock ETFs were once considered a tiny corner of the alternative income marketplace that had dodged the bullet of credit contraction. High yield mainstays like junk bonds, master limited partnerships, and even REITs have felt the pain of income investors reeling in their risk targets and running for the safety of high quality bonds. Read more
Written by Michael Fabian, October 16th, 2015
For retired investors seeking a low volatility income stream, it hasn’t gotten much better than owning preferred stocks this year. With the major averages reeling with concerns over global growth, the domestic banks and insurance companies who make up the majority of preferred stock issuance have quietly been plodding along with relatively good results. Read more