National Investment Services

NIS Preferred Stock Strategy


Objective
The Strategy seeks to provide returns well in excess of conventional fixed income investments, yet more stable than returns in the equity market. Our goal is to book numerous fractional point capital gains to enhance dividend income.

Philosophy
The preferred stock market is an inefficient, retail driven market with many pricing anomalies. The Strategy utilizes long/short positions and hedging strategies designed to take advantage of these anomalies and capture capital gains and dividend income. It employs an active trading style, with high portfolio turnover ratio.

Strategy
The Strategy invests primarily in Fixed Rate Capital Securities (FRCS) and traditional preferred stock vehicles. It employs a broad exposure in the preferred stock universe as a means of diversifying the portfolio and reducing individual issue risk, while providing more trading opportunities across a broader universe. The Strategy invests predominantly in investment grade issues listed on major exchanges such as the NYSE or NASDAQ.