Performance of Preferred Assets in the First Quarter

Preferred assets have shown remarkable resilience in the first quarter, with yields on the five and ten-year treasuries increasing by about 40 basis points, typically representing a headwind for preferred assets. Despite this, the preferred sector has seen positive returns, driven by the expectation of Fed rate cuts. The performance of the embedded credit assets, particularly the $25 par preferred, has been strong, showing gains of almost six percent, while the $1,000 par preferred assets have also shown positive returns. This performance has been influenced by the anticipation of Fed rate cuts.