The library

Articles on preferred stocks, baby bonds, BDCs and covered-call ETFs.

How the securities are built, how they are priced and how to hold them. Written for investors buying $25 securities and income funds on an exchange.

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3 articles · 15 min

Featured · Markets · Oct 22, 2026

Is the JEPI distribution return of capital

In the two fiscal years JPMorgan has reported, none of JEPI's distribution was return of capital. This article explains how the fund earns its payout, how the tax forms classify it, and how JEPQ, QYLD and XYLD compare.

Manish Hemrajani · 8 min

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Strategy · Oct 22, 2026

What PIK income means for BDC dividends

A BDC books payment-in-kind interest as income in the quarter it accrues and collects the cash later, if the borrower can pay. This article shows where PIK appears in the filings and what FS KKR and Ares Capital reported through June 30, 2026.

Manish Hemrajani · 8 min

Asset class · Oct 22, 2026

Covered-call ETFs: income or principal

A covered-call fund's monthly distribution comes from dividends, option premium and, when those fall short, the holder's own capital. The annual report shows the split. Three funds' filings show how to read it.

Manish Hemrajani · 8 min

Strategy · Oct 22, 2026

BDC dividend coverage explained

Dividend coverage is net investment income per share divided by the dividend per share. This article shows how to compute it from a 10-Q and how spillover income, special dividends and PIK income change the reading.

Manish Hemrajani · 8 min

Strategy · Sep 25, 2026

The Basics of Business Development Companies (BDCs)

BDCs, occupy a unique niche in the investment landscape. They give ordinary investors a way to participate in private credit and middle-market lending — strategies that were once the exclusive province of institutions and the ultra-wealthy.

Manish Hemrajani · 6 min

Strategy · Jul 20, 2026

Building an income portfolio with preferreds and baby bonds

Spreading holdings across issuers and sectors, across call dates and across security types separates a built income portfolio from a stack of high yields.

Manish Hemrajani · 4 min

Asset class · Jul 20, 2026

Cumulative vs. non-cumulative preferred stocks

One clause in the prospectus decides whether a missed dividend must be paid later or is lost. It is priced at little in normal times and matters when an issuer runs into trouble.

Manish Hemrajani · 8 min

Markets · Jul 20, 2026

Credit ratings for preferred stocks

One to three notches below the issuer's own senior debt is where rating agencies deliberately place preferred stock, and a substantial share of the exchange-traded market carries no rating at all.

Manish Hemrajani · 3 min

Strategy · Jul 20, 2026

Understanding call provisions and call risk

Most issuers owe thirty days' notice before redeeming a security at par. That option belongs to the issuer alone, and it shapes how every preferred and baby bond is priced.

Manish Hemrajani · 8 min

Strategy · Jul 20, 2026

Current yield, yield to call and yield to worst

Three yield figures appear on nearly every preferred and baby bond listing. A Lincoln National preferred quoted at $25.88 shows an 8.7% current yield but returns about 7.0% to its first call date. A Morgan Stanley preferred at $22.75 shows the reverse.

Manish Hemrajani · 8 min

Asset class · Jul 20, 2026

Preferred stocks vs. common stocks vs. bonds

Five dimensions (claims on cash flow, priority on assets, participation in upside, maturity and taxation) determine where common stock, preferred stock and bonds each belong in a portfolio. The familiar "hybrid" label captures none of them.

Manish Hemrajani · 3 min

Asset class · Jul 20, 2026

Baby bonds explained: structure, risks and rewards

At $25 par and traded on an exchange like a stock, baby bonds are genuine debt with a stated maturity and contractual interest, ranking senior to preferred stock from the very same issuers.

Manish Hemrajani · 4 min

Asset class · Jul 20, 2026

What are preferred stocks? A beginner's guide

Preferred stock has a $25 par value, a fixed dividend, and a claim that ranks above common stock and below all debt. It pays like a bond and absorbs losses like equity.

Manish Hemrajani · 8 min

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