The fund is invested in adjustable rate preferred securities issued by small- to mid-sized banking companies. These securities are eligible to pay dividends which have tax advantages.
"This is the first such fund to be launched in the United States and represents a new and expanding part of the preferred market," said Mark Lieb, Spectrum's founder and executive director. "In addition to providing current income, the dividends paid by the fund's floating-rate preferred securities may provide a hedge against rising short-term interest rates."