Flaherty & Crumrine Preferred and Income Fund (NYSE:PFO) is a closed-end management investment company that seeks to provide shareholders with high levels of current income and opportunities for capital appreciation. The fund primarily invests in preferred securities and other income-producing instruments, including non-cumulative and perpetual preferred stocks, hybrid securities, and convertible securities issued by U.S. and foreign corporations. It seeks to balance income generation with risk management through a disciplined investment approach centered on fundamental credit analysis.
The fund’s portfolio managers draw on the specialized research and trading capabilities of Flaherty & Crumrine, a firm established in 1993 and focused exclusively on preferred and hybrid securities. Utilizing a bottom-up security selection process, the team evaluates each issuer’s credit profile, dividend coverage, and interest rate sensitivity in order to construct a diversified portfolio. The fund may invest across a broad range of industries, with an emphasis on financial institutions, utilities, and energy companies that have historically issued preferred or hybrid securities to finance growth and capital requirements.
Since its inception in the mid-2000s, the fund has sought to capitalize on market inefficiencies in the preferred securities market by actively managing duration, credit quality, and sector allocation. The advisor employs risk-management tools and stress-testing scenarios to assess portfolio resilience under varying market conditions. Tactical exposure to global issues, including Canadian and European preferreds, can supplement U.S. holdings when valuation opportunities arise.
Flaherty & Crumrine Preferred and Income Fund serves both individual and institutional investors seeking a specialized fixed-income solution. The fund is governed by an independent Board of Directors charged with overseeing the advisor’s compliance with the investment objective and with safeguarding shareholder interests. The management team is based in Portland, Oregon, with additional research support in key financial centers.
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