I’ve been looking all week for a buy of a perpetual preferred and finally pulled the trigger on a ‘safe’ issue this morning.
I added to my GAMCO (Gabelli) Gold and Natural Resources 5% perpetual (GGN-B) @ . Current yield is 6.12% and the asset coverage is 965% as of 4/30/2025. So a somewhat meager yield, but one heck of a lot of safety. My buy was small but just trying to move forward with increasing portfolio yield (as compared to
It’s funny that I have bought this numerous times since February and all at prices close the same. Todays purchase was at $20.45–previous purchases were at $20.68, 20.98 and 2 buys at $20.50.
I have lots of buying to do in the week or two ahead as redemptions of shares and CDs have left me with a stack of cash–portfolios remain climbing, but with the cash I have I will need to be more active to move portfolio yields higher.
Bought KIM-M today, Inv grade, BBB-, (parent company BBB+ REIT) yld 6.50%.
Hi Scott, I have owned this one on and off over the years. Currently I don’t hold. I have been watching this one for years and feel I want to wait for an opportunity to buy under $20.00 I might be picky when it comes to nickels, dimes and quarters but that is just me.
I just want more of a cushion if the market starts gyrating.
Tim, I also own a lot of safe pref stocks in my portfolios. Many of these safe pref stocks are characterized by coupons in the 5.0-6.0% range, stable prices, and issued in the era of very low interest rates. Current yields are typically less than 6.5%. I am beginning to believe that there is a more effective opportunity to add safe preferreds to the portfolio by buying ETF’s such as PFF or PFFD. ETF’s that provide an effective yield in the 6.3-6.5% range and offer safety via the large number and variety of pref stocks that they hold. At a micro level, we may have issues with some of their holdings and trading philosophy. But, at a macro level, the performance is consistent.
Pros: reduces the number of investments in a porfolio; allows investors to focus on pursuing pref stocks with effective yields of 7+%.
Cons: eliminates the possibility of capital gains if the safe pref stocks are called. Realistically the odds of an IG pref, issued in a low-interest rate environment, being called are low; would result in an overweight position in a few ETFs.
I am not completely on board with this change in thinking. But, I am giving it very serious consideration.
Larry, the preferred etfs generally use leverage and their securities have much lower ratings than the cef preferreds.
In addition, as you likely know there is slippage when securities are added and deleted.
Also the CEF, GAMCO Global Gold Natural Resources&Inc:GGN( really a commodity fund in disguise) is selling at a 2% discount to NAV and also has a current yield of %8.16….Mostly stacked with gold and oil companies…..Thanks to the falling dollars the fund is on a bull trend. I can only imagine the USA debt sheet getting worse and this fund will continue to rise…