Cohen & Steers Select Preferred & Income Fund

Cohen & Steers Select Preferred & Income Fund

Cohen & Steers launched the Select Preferred & Income Fund as a closed-end fund in 2010, building on the firm's longer history as a publicly traded asset manager specializing in real assets and alternative income. The vehicle is co-managed by William Scapell and Elaine Zaharis-Nikas, who run it alongside the firm's flagship open-end preferred securities strategy. The closed-end wrapper is the structural insight: it permits a level of credit concentration and illiquidity that daily-redemption funds must avoid. The fund targets high current income by investing at least 80% of its assets in preferred and other income securities. Holdings span institutional preferred stock, hybrid securities, contingent capital instruments, and, to a lesser extent, fixed-rate debt from issuers in financials, insurance, utilities, and real estate. The portfolio leans heavily into US-domiciled financial institutions — banks, insurers, and REITs — but has historically held paper from European and Asian issuers when credit spreads justify the move. Confirmed positions have included preferred issues from Wells Fargo, Bank of America, and MetLife, among others, alongside selected energy and telecom names when the team sees relative value. The fund employs leverage through a credit facility to enhance yield, a standard feature for closed-end preferred funds but one that magnifies both income and net-asset-value volatility. In March 2024, the fund maintained a managed distribution policy targeting a level monthly payout, reset periodically based on earnings and market conditions — a posture designed to appeal to income-oriented retail and institutional holders who prioritize predictable cash flows over NAV appreciation. The fund's structural advantage is its permanent-capital vehicle format. Unlike open-end mutual funds or ETFs that must meet redemptions by selling assets, the closed-end structure lets Scapell and Zaharis-Nikas sit through credit dislocations and buy when forced sellers appear. That illiquidity premium is the core of the strategy, and it is why the fund has historically traded at both premiums and discounts to NAV depending on rate and credit-cycle positioning.