A sense of securities

Spectrum's Matthew Byer says preferred securities can offer investors an attractive complement to their fixed income portfolio.

As economies, markets and company fundamentals continue their recovery in the first quarter of 2010, investors are becoming increasingly concerned about the anaemic returns they earn on cash and moneymarket funds and the less-than-attractive spreads found in the investment grade senior bond markets. While some are chasing relatively attractive yields found in the high-yield fixed income market, there is an overriding reluctance to expose portfolios to the associated default risk. Others have found another option – preferred securities – typically the highest-yielding sector of the investmen...