Preferred Shares, an Overlooked Asset Class, Add Diversification and Income to Portfolios

Publication Title

Journal of Financial Service Professionals

Authors

David Russell, California State University, Northridge
Harold Weston, Georgia State University, College of LawFollow

Document Type

Article

Publication Date

2024

Abstract

Preferred shares have high, fixed-dividend rates, often comparable to investment-grade bonds but have become a forgotten asset class for most investors. Preferred shares witnessed a surge of attention during the financial crisis of 2008. Because of their high and steady dividend rates, they should be considered as an asset class for portfolios that seek income. The current analysis shows that when added to a diversified portfolio, preferred shares can increase returns and reduce variance over standard equity/fixed-income portfolios, including those that include some exposure to real estate investment trusts (REITs) for income production.

Recommended Citation

David T. Russell & Harold Weston, Preferred Shares, an Overlooked Asset Class, Add Diversification and Income to Portfolios, 78 J. Fin. Svc. Prof. 71 (2024).

Institutional Repository Citation

David Russell & Harold Weston, Preferred Shares, an Overlooked Asset Class, Add Diversification and Income to Portfolios, Faculty Publications By Year 3560 (2024)
https://readingroom.law.gsu.edu/faculty_pub/3560

Volume

78

Issue

2