Active Management in Preferred Securities

This document is a guide that discusses the significance of active management in the preferred securities market. It outlines how active managers can leverage market disparities and adapt to changing conditions to achieve higher returns compared to passive strategies. The text details the advantages of active management, including access to a broader range of global markets and diverse security structures, which enhances risk management capabilities. It emphasizes that while passive strategies may attract investors due to lower expenses, they may not always yield better results. The guide presents statistical evidence indicating that a significant percentage of active preferred stock funds have outperformed their passive counterparts over various time frames. Furthermore, it explains how active managers can utilize different investment structures and strategies to navigate interest rate risks and economic cycles effectively. The document concludes by asserting that skilled active managers are better positioned to serve investors in the preferred securities market.