Preference shares are a type of hybrid security that combines features of both stocks and bonds. They offer investors a fixed income stream, similar to bonds, but also have the potential for capital appreciation, like stocks. Preference shares typically have a higher dividend yield than common stocks, but they also come with less voting rights and are more susceptible to interest rate risk.
Preference shares can be an attractive investment for investors seeking a steady income stream with some potential for growth. They are also a good option for investors who are looking for a way to diversify their portfolio and reduce their overall risk.