Eric Chadwick, president and portfolio manager at Flaherty & Crumrine, says that at a time when investors are searching for yield and are being tempted to take on more risk to get it, preferred securities are shining, providing a relatively attractive return without adding danger to the portfolio. Chadwick notes that preferreds now are offering the best credit quality he has seen in years, and at shorter durations, making them less risky than high-yield and emerging-markets debt, and more in line with investment-grade bonds. That said, those conditions have generated significant demand for preferreds, generating premiums that closed-end fund investors must consider.