Doug Baker, Managing Director, Portfolio Manager, Nuveen met with Julie Cooling, Founder & CEO, RIA Channel to discuss the benefits of preferred securities in today’s environment.
Preferred securities are a great option for investors that are seeking income, Baker explains. Issued primarily by banks and insurance companies, preferred securities typically offer investors higher yield than the average fixed income investment, without significant credit risk. When allocating to preferred securities, Baker encourages advisors to consider the potential for interest rate risk and the portfolio’s overall exposure to the financial services industry. “We might recommend a 5% allocation to an investor with an average risk profile,” says Baker.
Established in 2006, The Nuveen Preferred Securities Fund presently holds about $3.5 billion in assets under management. To learn more, head here.