In this video, Will Hunter, Co-Portfolio Manager of the Messinger Group Preferred Securities strategy, provides valuable insight into this Asset Class and unpacks its unique characteristics as a satellite to Traditional Fixed-Income to enhance After-Tax Income potential.
This material is intended as a broad overview of the portfolio managers' current style, philosophy and process. This material is general in nature, not individualized and presented solely for informational purposes and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security or a strategy involving securities. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Third-party economic, market or security estimates or forecasts discussed herein may or may not be realized and no opinion or representation is being given regarding such estimates or forecasts. Certain products and services may not be available in all jurisdictions or to all client types. Unless otherwise indicated, returns shown reflect reinvestment of dividends and distributions. Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
Representative portfolio information (characteristics, holdings, weightings, etc.) is based upon the composite or a representative/model account. Representative accounts are selected based on such factors as size, length of time under management and amount of restrictions. Any segment level performance shown (equity only or fixed income only) is presented gross of fees and focuses exclusively on the investments in that particular segment of the portfolio being measured (equity or fixed income holdings) and excludes cash. Client accounts are individually managed and may vary significantly from composite performance and representative portfolio information. Specific securities identified and described do not represent all of the securities purchased, sold or recommended for advisory clients. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.
A bond’s value may fluctuate based on interest rates, market conditions, credit quality and other factors. You may have a gain or loss if you sell your bonds prior to maturity. Of course, bonds are subject to the credit risk of the issuer.
Neuberger Berman Investment Advisers LLC, as well as its employees, does not provide tax or legal advice. You should consult your accountant, tax adviser and/or attorney for advice concerning your particular circumstances. Qualified Dividend Income (QDI) refers to dividends that are paid out of after-tax income for individuals. Dividends from U.S. corporations and qualified foreign corporations on securities held for a minimum of 61 days, during the 120-day period beginning 60 days before the ex-dividend payment, receive favorable tax treatment and are considered Qualified Dividend Income.
ICE BofAML Core Plus Fixed Rate Preferred Securities Index tracks the performance of fixed rate US dollar denominated preferred securities issued in the US domestic market. The index includes preference shares (perpetual preferred securities), both DRD-eligible and non-DRD eligible preferred stock and senior and subordinated debt issued in $25, $50 or $100 par/liquidation increments. Qualifying securities must be rated at least B3 (based on an average of Moody’s, S&P and Fitch) and must have an investment grade rated country of risk (based on an average of Moody’s, S&P and Fitch foreign currency long term sovereign debt ratings). In addition, qualifying securities must be issued as public securities or through a 144a filing, must have a fixed coupon or dividend schedule and must have a minimum amount outstanding of $100 million. Securities with a fixed maturity must have at least 18 months to final maturity at time of issuance and a minimum remaining term to final maturity of at least one year. Fixed-to-floating rate securities are included provided they are callable within the fixed rate period and are at least one year from the last call prior to the date the bond transitions from a fixed to a floating rate security. Auction market securities, convertibles, floaters, purchase units, purchase contracts, corporate pay-in-kind securities, securities issued by closed-end funds and derivative instruments such as repackaged securities, credit default swaps and $1,000 par securities are excluded from the Index. Unlisted preferred stock is excluded from the index, but unlisted senior or subordinated debt-like securities are included. Index constituents are market capitalization weighted. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index. Information concerning constituent bond prices, timing and conventions is provided in the ICE BofAML Bond Index Guide, which can be accessed on our public website (https://indices.theice.com), or by sending a request to firstname.lastname@example.org. The index is rebalanced on the last calendar day of the month based on information available up to and including the third business day before the last business day of the month. New issues must settle on or before the calendar month end rebalancing date in order to qualify for the coming month. No changes are made to constituent holdings other than on month end rebalancing dates.
Preferred Securities – Represents a class of capital stock that pays dividends at a specified rate and has a preference over common stock in the payment of dividends and the liquidation of assets.
Yield to Worst – Most conservative estimate of yield, which shows the lowest possible yield considering all effective maturities of the bond (such as calls or mandatory puts).
Current Yield – The market rate the bond is currently providing. Defined as coupon payments divided by market value.
This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Neuberger Berman is not providing this material in a fiduciary capacity and has a financial interest in the sale of its products and services. Investment decisions and the appropriateness of this material should be made based on an investor's individual objectives and circumstances and in consultation with his or her advisors. Neuberger Berman Investment Advisers LLC (“NBIA”) is a registered investment adviser. For additional information and required disclosure regarding the advisory services provided by NBIA, please see NBIA’s Form ADV Part 2A at http://www.nbprivatewealth.com/adv_part_2A_nbia/ and Form CRS at http://www.nbprivatewealth.com/form_CRS_nbia_nbbd/. Wealth planning and other brokerage services are provided by Neuberger Berman BD LLC (“NBBD”), an affiliate of NBIA and a registered broker-dealer and member FINRA/SIPC. For additional information and required disclosure regarding the brokerage services provided by NBBD, please see NBBD’s Disclosure Statement at http://www.nbprivatewealth.com/reg_BI_disclosure_nbbd/ and Form CRS at http://www.nbprivatewealth.com/form_CRS_nbia_nbbd/.
The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.