From Seekingalpha · Prakhar Agarwal, CFA · · 50s
Morgan Stanley Preferreds Yield Short of Allocation
Morgan Stanley's Series A Preferreds yield 6.34%, below fixed-rate options despite similar credit risk.
In brief
Morgan Stanley's Series A Preferreds yield 6.34%, below fixed-rate options despite similar credit risk. Morgan Stanley Series A Preferreds offer 6.34% yield, less than fixed-rate preferreds' 7%+ yields, making them less compelling for new allocations. Originally reported by Seekingalpha.
Morgan Stanley Series A Preferred
Morgan Stanley Series A Preferred is the floating-rate preferred with a coupon linked to 3-month SOFR.
Yield Comparison
MS.PR.A currently yields 6.34%, lower than MS's fixed-rate preferreds which offer yields above 7% despite similar credit risk.
Duration Benefit
The primary appeal is lower duration exposure for partial protection in volatile interest rate environments.
Performance Concerns
Recent performance has lagged cash proxies, and yield curve flattening reduces timing advantages for new allocations.
The essence
Morgan Stanley Series A Preferreds offer 6.34% yield, less than fixed-rate preferreds' 7%+ yields, making them less compelling for new allocations.
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