Bloomberg Surveillance · Wednesday, September 9, 2026
Jay Hatfield advocates for preferred stocks as a valuable component of a fixed-income strategy, highlighting their potential for equity-like returns with significantly lower volatility. He points to ETFs like PFFA and BNDES, which can offer 8-10% returns with betas around 0.4. Hatfield recommends preferred stocks for conservative investors seeking income and believes they are a good asset class, especially given the current interest rate environment.
“Well, we would recommend if you're going to do fixed income, which... is a big sacrifice in a way. If you get 4%, if you have investment grade, if you have non-investment grade and great management, not sure where you can get that, but great management like PFFA or BNDES, you can get equity-like returns with much lower volatility.”
“So you can get 0.4 betas, 8, 9, 10% returns. So it's for more conservative investors who like income, tap my IRA. So it's a great asset class. And really it's, The reason we obsess about interest rates at 75% of our AUM is fixed income.”