Hybrid Securities

Enjoy the best of both worlds.

Hybrid securities are a class of securities that combine the characteristics of both equity and fixed income instruments.

They are attractive to investors for several reasons. First, they typically generate a higher rate of return than traditional fixed income products. Since they are a combination of fixed income and equity securities, they often provide investors with more protection in a market downturn, as they are not as affected by events that would generally cause an overall market decline. Hybrids can also provide investors with greater security than simple common share ownership since the holders of hybrid securities are paid before common shareholders in the event that a company becomes insolvent. Many hybrid securities also pay tax-advantaged dividend income to investors.

New types of hybrid securities are constantly being introduced to meet the needs of sophisticated investors. Some of these securities get so complicated that it becomes difficult to define them as either debt or equity.

The Burak Hannon Brojde Group can help you understand the hybrid security market and determine the right security to meet your specific investment needs.