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Spreads are Historically Wide for Preferreds

Destra Capital

August 12, 2025

Preferreds may offer a yield advantage to investors in today's market environment. Today’s yield spreads over 10 year treasuries are wide in relation to history, demonstrating today’s attractive value in the preferred market, particularly since 1998.

Source: NBER; FRED, Federal Reserve Bank of St. Louis; Standard & Poor’s; Morningstar; US BEA Survey of Current Business; Flaherty and Crumrine; and GlobalMacro Partners, LLC

As you can see, the historical average preferred yield spread sits between 1% and 2%, a rate at which was last seen during the Financial Crisis of 2008.