Investment Grade Preferred

Our Investment Grade Preferred strategy was created in collaboration with one of our advisor partnerships. It was developed in response to client interest in strategies that generate yield without excessive risk or being highly correlated to the stock market. See our latest performance fact sheet.

Key Portfolio Tenets

Capital Structure InvestingThe Investment Grade portfolio consists of preferred stocks and baby bonds issued by some of the lowest credit risk (safer) companies in the market. Each company in the portfolio has preferred securities rated investment grade by at least one rating agency. We buy the preferred equities of high-quality businesses capturing the increased yield provided by being lower in the capital stack of stable businesses. Allocating our capital lower in the capital stack of high-quality companies provides an attractive yield for the level of credit risk in the portfolio.
Intelligent DiversificationWe balance the benefit of owning multiple positions to reduce company-specific risk while only incorporating our top 30-40 ideas.
AllocationThe holdings in this portfolio are concentrated primarily in major financial institutions and utility companies. This is a similar allocation as the underlying index.
Position ManagementOur goal is to buy preferred stocks that we can hold for the long term, resulting in low portfolio turnover.
Risk ManagementBy monitoring the positions in the portfolio, we are continuously evaluating execution toward our investment thesis.