HPI: Fiscal Dominance Could Challenge Ability To Deliver Attractive Real Returns

The John Hancock Preferred Income Fund ( HPI ) is a closed-end fund that is designed to provide investors with a way to achieve a very high level of current income from the assets that they have

The John Hancock Preferred Income Fund offers a 9.17% yield, blending preferred stocks and bonds for high current income. HPI's portfolio diverges from pure preferred stock funds, with over 40% in corporate bonds, impacting both yield and risk profile. The fund's distribution is mostly covered by net investment income and realized gains, but reliance on unrealized gains warrants monitoring. Despite its attractive yield and short duration, HPI faces challenges delivering real returns amid fiscal dominance and persistent inflation.