Preferred Securities
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DATE
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THURSDAY, 24 FEBRUARY 2022
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| Title | Preferred Securities |
| Moderator | Nicholas Ng
Investment Advisor |
| Speaker(s) | Dylan Ngai
Client Portfolio Manager |
| Key Takeaways | 1. Preferred Securities are a hybrid of bonds and equities, with features from both asset classes. In past rising rate environments, preferred securities performed well given the extra carry, for the past 20 years, preferred securities performed during rate hike and flat rate.
2. The average credit rating of preferred securities is BBB-, an investment grade rating (IG), and over 97% of preferred issuers are rated as investment grade. Historically default rates among preferred securities have been low because issuers are generally well-established, high quality companies with solid balance sheets.
3. Preferred Securities have been able to rebound strongly from market drawdown and selloff. Market dislocations between market valuations and company fundamentals produced strong opportunities for quality companies. |