Cohen & Steers has launched the Cohen & Steers Low Duration Preferred and Income Fund, a mutual fund offering the potential for attractive monthly income with added tax advantages, along with reduced sensitivity to changes in interest rates.
The Fund delivers Cohen & Steers' market-leading preferred securities strategy to retail and institutional investors, focusing on security structures with low durations. Under normal market conditions, the Fund will have a weighted-average modified duration of three years or less and will potentially offer a higher income rate than many longer-duration fixed-income offerings. Additionally, a substantial portion of the income distributed by the Fund may be considered qualified dividend income for tax purposes, generally taxed at a lower rate than regular income, resulting in the potential for attractive yields both before and after taxes.
"Cohen and Steers has been investing in preferred securities since the late 1990s and we've found them to offer tremendous income potential with unique investment characteristics," says Robert Steers, Chief Executive Officer of Cohen & Steers. "Leveraging our extensive experience with the asset class, we believe the Low Duration Preferred and Income Fund is an excellent vehicle to help investors manage interest-rate risk in today's market environment."
The Fund provides access to the global preferred securities market, including over-the-counter securities that are available only to large institutional investors. The majority of preferred securities are issued by the world's largest banks, insurance companies, utilities, and real estate investment trusts, which may be less represented in other fixed-income asset classes, notably high yield. While most preferred securities are from issuers with investment-grade credit ratings, the Fund will also pursue value-driven opportunities in below-investment-grade and non-rated issues.
Portfolio managers William Scapell and Elaine Zaharis-Nikas have an average of 21 years of experience and have been managing the firm's preferred securities portfolios since 2003. They are backed by a team of analysts whose proprietary research is supported by extensive contacts in the industry.
