Episode 130: Navigating the Current Preferred and Capital Securities Landscape with Phil Jacoby, Executive Director and CIO of Spectrum

In this episode of the InsuranceAUM.com Podcast, Stewart Foley is joined by Phil Jacoby, Executive Director and Chief Investment Officer of Spectrum, a subsidiary of Principal. The conversation centers around the complex world of preferred and capital securities, a niche area that Phil has extensive experience in managing. He shares how the market for these securities has evolved over the years, highlighting key shifts, the role of regulators, and the impact of current economic conditions. Phil also breaks down the structural differences between U.S. and European capital securities, providing a comprehensive overview for those looking to better understand this market.

The discussion further explores the value that preferred securities can offer to insurance investors, particularly in today’s interest rate environment. Phil explains how a conservative investment approach, combined with strategic choices in high-quality enterprises, can optimize yield without taking on excessive risk. He also shares insights into how market spreads play a crucial role in managing portfolios that need to be mark-to-market, and what factors investors should consider as we move through 2023 and beyond.