REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (the
Fund) as of October 31, 2021, the related statements of operations and cash flows, for the year ended October 31, 2021, the statement of changes in net assets and the financial highlights for the year ended October 31,
2021 and for the period October 28, 2020 (commencement of operations) through October 31, 2020, including the related notes (collectively referred to as the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Fund as of October 31, 2021, the results of its operations and its cash flows for the year ended October 31, 2021, the changes in its net assets and the financial
highlights for the year ended October 31, 2021 and for the period October 28, 2020 (commencement of operations) through October 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds management. Our responsibility is to express an opinion on the Funds financial statements based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021 by correspondence with the custodian,
transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 22, 2021
We have
served as the auditor of one or more investment companies in the Cohen & Steers family of mutual funds since 1991.
41
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
(The following pages are unaudited)
TAX INFORMATION2021
For the fiscal year ended October 31, 2021, for individual taxpayers, the Fund designates $79,034,008 as qualified dividend income
eligible for reduced tax rates and short-term capital gain distributions of $452,582. In addition, for corporate taxpayers, 73.86% of the ordinary dividends paid qualified for the dividends received deduction (DRD).
REINVESTMENT PLAN
The Fund has a dividend reinvestment plan commonly referred to as an opt-out plan (the Reinvestment Plan). Each common shareholder who participates in the Reinvestment Plan will have all distributions of dividends and
capital gains (Dividends) automatically reinvested in additional common shares by Computershare as agent (the Plan Agent). Shareholders who elect not to participate in the Reinvestment Plan will receive all Dividends in cash paid by check mailed
directly to the shareholder of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, as dividend disbursing agent. Shareholders whose common shares are held in the name of a broker or nominee
should contact the broker or nominee to determine whether and how they may participate in the Reinvestment Plan.
The
Plan Agent serves as agent for the shareholders in administering the Reinvestment Plan. After the Fund declares a Dividend, the Plan Agent will, as agent for the shareholders, either: (i) receive the cash payment and use it to buy common shares in
the open market, on the NYSE or elsewhere, for the participants accounts or (ii) distribute newly issued common shares of the Fund on behalf of the participants. The Plan Agent will receive cash from the Fund with which to buy common shares in
the open market if, on the Dividend payment date, the NAV per share exceeds the market price per share plus estimated brokerage commissions on that date. The Plan Agent will receive the Dividend in newly issued common shares of the Fund if, on the
Dividend payment date, the market price per share plus estimated brokerage commissions equals or exceeds the NAV per share of the Fund on that date. The number of shares to be issued will be computed at a per share rate equal to the greater of (i)
the NAV or (ii) 95% of the closing market price per share on the payment date.
If the market price per share is less
than the NAV on a Dividend payment date, the Plan Agent will have until the last business day before the next ex-dividend date for the common stock, but in no event more than 30 days after the Dividend payment date (as the case may be, the Purchase
Period), to invest the Dividend amount in shares acquired in open market purchases. If at the close of business on any day during the Purchase Period on which NAV is calculated the NAV equals or is less than the market price per share plus estimated
brokerage commissions, the Plan Agent will cease making open market purchases and the uninvested portion of such Dividends shall be filled through the issuance of new shares of common stock from the Fund at the price set forth in the immediately
preceding paragraph.
Participants in the Reinvestment Plan may withdraw from the Reinvestment Plan upon notice to the
Plan Agent. Such withdrawal will be effective immediately if received not less than ten days prior to a Dividend record date; otherwise, it will be effective for all subsequent Dividends. If any participant elects to have the Plan Agent sell all or
part of his or her shares and remit the proceeds, the Plan Agent is authorized to deduct a $15.00 fee plus $0.10 per share brokerage commissions.
42
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
The Plan Agents fees for the handling of reinvestment of Dividends will be paid by the Fund. However, each participant will
pay a pro rata share of brokerage commissions incurred with respect to the Plan Agents open market purchases in connection with the reinvestment of Dividends. The automatic reinvestment of Dividends will not relieve participants of any income
tax that may be payable or required to be withheld on such Dividends.
The Fund reserves the right to amend or terminate
the Reinvestment Plan. All correspondence concerning the Reinvestment Plan should be directed to the Plan Agent at 800-432-8224.
OTHER INFORMATION
A description of the policies and procedures that the Fund uses to determine how to
vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 866-227-0757, (ii) on our website at cohenandsteers.com or (iii) on the SECs website at http://www.sec.gov. In addition, the
Funds proxy voting record for the most recent 12-month period ended June 30 is available by August 31 of each year (i) without charge, upon request, by calling 866-227-0757 or (ii) on
the SECs website at http://www.sec.gov.
Disclosures of the Funds complete holdings are required to be made
monthly on Form N-PORT, with every third month made available to the public by the SEC 60 days after the end of the Funds fiscal quarter. The Funds Form N-PORT is available (i) without charge, upon request, by calling 866-227-0757 or
(ii) on the SECs website at http://www.sec.gov.
Please note that distributions paid by the Fund to shareholders
are subject to recharacterization for tax purposes and are taxable up to the amount of the Funds investment company taxable income and net realized gains. Distributions in excess of the Funds investment company taxable income and net
realized gains are a return of capital distributed from the Funds assets. To the extent this occurs, the Funds shareholders of record will be notified of the estimated amount of capital returned to shareholders for each such distribution
and this information will also be available at cohenandsteers.com. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are mailed after the close of each calendar year. Distributions of capital
decrease the Funds total assets and, therefore, could have the effect of increasing the Funds expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a less than opportune time.
Notice is hereby given in accordance with Rule 23c-1 under the 1940 Act that the Fund may purchase, from time
to time, shares of its common stock in the open market.
43
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
The following information in this annual shareholder report is a summary of certain changes since the Funds most recent
annual shareholder report. This information may not reflect all of the changes that have occurred since you purchased the Fund.
Changes to the Board of Trustees and Officers
On March 8, 2021, the Board of Trustees voted to set the number of trustees on the Funds Board of Trustees to ten. In
addition, the Board of Trustees elected Ms. Ramona Rogers-Windsor as a Trustee of the Fund.
Effective December 7, 2021,
Trustee and Chairman Robert H. Steers resigned from the Funds Board of Trustees. The Board of Trustees has appointed Trustee Joseph M. Harvey to succeed Mr. Steers as Chairman. In addition, effective March 1, 2022, Mr. Harvey, Cohen &
Steers, Inc.s (CNS) current President and a member of CNS board of trustees, will succeed Mr. Steers as Chief Executive Officer of CNS and Cohen & Steers Capital Management, Inc., the Funds investment manager (the investment
manager). At that time, Mr. Steers will assume the role of Executive Chairman of CNS and continue on as a member of CNS board of trustees.
On December 7, 2021, the Board of Trustees elected Adam M. Derechin, President and Chief Executive Officer of the Fund, as a
Trustee of the Fund. Concurrent with his election, Mr. Derechin resigned as President and Chief Executive Officer of the Fund. Mr. Derechin currently serves as the Chief Operating Officer of CNS and the investment manager since 2004 and 2003,
respectively. Effective December 7, 2021, James Giallanza, previously Chief Financial Officer of the Fund, succeeded Mr. Derechin as President and Chief Executive Officer of the Fund and Albert Laskaj, Treasurer of the Fund, succeeded Mr.
Giallanza as Chief Financial Officer of the Fund.
In addition, also on December 7, 2021, the Board of Trustees voted to
set the number of trustees on the Funds Board of Trustees to nine, effective January 1, 2022. Trustee C. Edward Ward, Jr. will retire from the Board of Trustees on December 31, 2021 pursuant to the Funds mandatory retirement policy.
44
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
CURRENT INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT POLICIES AND PRINCIPAL RISKS OF THE FUND
The information contained herein is provided for informational purposes only and does not constitute a solicitation of an offer to
buy or sell Fund shares.
Investment Objectives
The Funds primary investment objective is high current income. The Funds secondary investment objective is capital
appreciation. In pursuing its investment objectives, the Fund seeks to achieve favorable after-tax returns for its shareholders by seeking to minimize the U.S. federal income tax consequences on income
generated by the Fund. There can be no assurance that the Fund will achieve its investment objectives. Unless otherwise indicated below, the Funds investment objectives and investment policies are considered
non-fundamental and may be changed by the Funds Board of Trustees without shareholder approval. However, the Funds investment objectives and its policy of investing at least 80% of its Managed
Assets (defined below) in preferred and other income securities may only be changed upon 60 days prior written notice to the Funds shareholders.
Investment Strategies
The Fund pursues its investment objectives primarily by investing in issues of preferred and other income securities the investment manager believes to be undervalued relative to credit quality and other investment characteristics.
In making this determination, the investment manager evaluates the fundamental characteristics of an issuer, including, among other characteristics, an issuers creditworthiness, and also takes into account prevailing market factors. In
analyzing credit quality, the investment manager considers not only fundamental analysis but also an issuers corporate and capital structure and the placement of the preferred or income securities within that structure. The investment manager
may rely primarily on its own analysis of the credit quality and risks associated with individual securities considered for the Fund, rather than relying exclusively on nationally recognized statistical rating organizations (NRSROs) or third-party
research. This aspect of the investment managers capabilities will be particularly important to the extent that the Fund invests in below investment grade or unrated securities and in securities of
non-U.S. issuers. In evaluating relative value, the investment manager also takes into account call, conversion and other structural security features, in addition to such factors as the likely directions of
credit ratings and relative value versus other income security classes. The Fund will not seek to achieve specific ESG outcomes through its portfolio of investments, nor will it pursue an overall impact or sustainable investment strategy. However,
the investment manager will incorporate consideration of relevant ESG factors into its investment decision-making. For example, although the investment manager does not generally exclude investments based on ESG factors alone, when considering an
investment opportunity with material exposure to carbon emissions regulation, this risk may be considered as one factor in the investment managers holistic review process.
Under normal market conditions, the Fund invests at least 80% of its Managed Assets in a portfolio of preferred and other income
securities issued by U.S. and non-U.S. companies, which may be either exchange-traded or available over-the-counter (OTC). Such
securities may include traditional preferred securities; hybrid-preferred securities that have investment and economic characteristics of both preferred stock and debt securities; floating-rate and fixed-to-floating-rate preferred securities; fixed- and floating-rate corporate debt securities; convertible securities; contingent capital securities (CoCos);
45
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
and securities of other closed-end, open-end or exchange-traded
funds (ETFs) that invest primarily in preferred and/or debt securities. These securities may be across a wide range of sectors, industries and countries. To the extent the Fund invests in securities of other
closed-end, open-end, or ETFs, the Fund will consider the investments of these funds, to the extent known by the Fund, in determining compliance with this policy. The
Fund may also invest in restricted securities, including securities that are issued in private placements, securities that are only eligible for resale pursuant to Rule 144A under the Securities Act of 1933 (the Securities Act) (referred to as Rule
144A Securities) and securities of U.S. and non-U.S. issuers that are issued without registration with the Securities and Exchange Commission (the SEC) pursuant to Regulation S under the Securities Act. In
addition to purchasing securities in the secondary market, the Fund may seek investment opportunities in new issues and follow-on or secondary offerings of preferred and debt securities. Managed Assets are the Funds net assets,
plus the principal amount of loans from financial institutions or debt securities issued by the Fund, the liquidation preference of preferred shares issued by the Fund, if any, and the proceeds of any reverse repurchase agreements entered into by
the Fund (Reverse Repurchase Agreements).
The Fund will invest 25% or more of its total assets in the financials
sector, which is comprised of the banking, diversified financials, real estate (including real estate investment trusts (REITs)) and insurance industries. From time to time, the Fund may have 25% or more of its total assets invested in any one or
more of these industries that make up the financials sector. In addition, the Fund also may focus its investments in other sectors or industries, such as (but not limited to) energy, industrials, utilities, pipelines, health care and
telecommunications. The investment manager retains broad discretion to allocate the Funds investments across various sectors and industries. The Fund may invest without limit in securities of non-U.S.
companies, which may be non-U.S. dollar denominated, including up to 15% of Managed Assets in securities issued by companies domiciled in emerging market countries. Typically, emerging markets are in countries
that are in the process of industrialization, with lower gross national products per capita than more developed countries. Many foreign companies issue both foreign currency and U.S. dollar-denominated preferred and debt securities. Those securities
that are traded in the United States have characteristics that are similar to traditional and hybrid preferred securities. The Fund may also invest in securities of foreign companies in the form of American Depositary Receipts (ADRs), Global
Depositary Receipts (GDRs) and European Depositary Receipts (EDRs). The investment manager may hedge some or all of the Funds foreign currency exposure.
The Fund may invest in preferred and debt securities of any maturity or credit rating, including investment grade securities, below
investment grade securities and unrated securities. Although not required to do so, the Fund will generally seek to maintain a minimum weighted average senior debt rating of companies in which it invests of
BBB-, which the Fund considers to be investment grade. Although a companys senior debt rating may be BBB-, an underlying security issued by such company in which
the Fund invests may have a lower rating than BBB-. If the Fund cannot access a companys average senior debt rating, the Fund may look to the rating of the underlying security issued by such company. The
determination of whether a security is deemed investment grade or below investment grade will be determined at the time of investment. A security will be considered to be investment grade if it is rated as such by one NRSRO (for example minimum Baa3
or BBB- by Moodys or S&P, respectively) or, if unrated, is judged to be investment grade by the investment manager. Below investment grade securities are also known as high yield or junk securities and are regarded
as having more speculative characteristics with respect to the payment of interest and repayment of
46
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
principal. The Fund may invest a significant portion of its assets in below investment grade securities or securities that are unrated but judged,
at the time of investment, to be below investment grade by the investment manager.
The Fund may invest in both OTC and
exchange-traded preferred securities. There are two basic types of preferred securities, traditional preferred securities and hybrid-preferred securities. Traditional preferred securities are perpetual and equity-like in nature. They may be issued
by an entity taxable as a corporation and pay fixed or floating rate dividends. Preference means that a company must pay dividends on its preferred securities before paying any dividends on its common stock, and the claims of preferred
securities holders are ahead of common stockholders claims on assets in a corporate liquidation or bankruptcy. However, these claims are subordinated to more senior creditors, including senior debt holders. Holders of preferred securities
usually have no right to vote for corporate directors or on other matters. Preferred securities share many investment characteristics with both common stock and bonds; therefore, the risks and potential rewards of investing in the Fund may at times
be similar to the risks of investing in both equity funds and bond funds. Hybrid-preferred securities are debt instruments that have characteristics similar to those of traditional preferred securities. Hybrid preferred securities may be issued by
corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated trustor partnership of the corporation, generally in the form of preferred interests in subordinated debentures or similarly
structured securities. The hybrid-preferred securities market consists of both fixed and adjustable coupon rate securities that are either perpetual in nature or have stated maturity dates. Hybrid preferred holders generally have claims to assets in
a corporate liquidation that are senior to those of traditional preferred securities but subordinate to those of senior debt holders. Certain subordinated debt and senior debt issues that have preferred characteristics are also considered to be part
of the broader preferred securities market.
Debt securities in which the Fund may invest include fixed- and
floating-rate corporate debt securities issued by U.S. and non-U.S. corporations, including U.S. dollar denominated debt obligations issued or guaranteed by U.S. corporations, U.S. dollar-denominated obligations of foreign issuers and debt
obligations denominated in foreign currencies. Such debt obligations may include, among others, bonds, notes, debentures and variable rate demand notes, with the primary difference being their maturities and secured or unsecured status. Such
corporate debt securities are fixed or floating-rate securities issued by businesses to finance their operations. The issuer pays the investor a fixed or variable rate of interest and normally must repay the amount borrowed on or before maturity.
The Fund may invest up to 20% of its Managed Assets in CoCos. CoCos are debt or preferred securities with loss
absorption characteristics that provide for an automatic write-down of the principal amount or value of securities or the mandatory conversion into common shares of the issuer under certain circumstances. A mandatory conversion might be
automatically triggered, for instance, if a company fails to meet the capital minimum described in the security, the companys regulator makes a determination that the security should convert, or the company receives specified levels of
extraordinary public support. Since the common stock of the issuer may not pay a dividend, investors in these instruments could experience a reduced income rate, potentially to zero, and conversion would deepen the subordination of the investor
(worsening the Funds standing in a bankruptcy). In addition, some CoCos provide for an automatic write-down of capital under such circumstances.
The Fund is authorized to purchase, sell or enter into any derivative contract or option on a derivative contract, transaction or
instrument, without limitation, including various interest rate
47
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
transactions such as swaps, caps, floors or collars, and foreign currency transactions such as foreign currency forward contracts, futures
contracts, options, swaps and other similar strategic transactions in connection with its investments in securities of non-U.S. companies. The Funds primary use of derivative contracts will be to enter
into interest rate and currency hedging transactions in order to reduce the interest rate and foreign currency risk inherent in the Funds investments. To the extent any derivatives would be deemed to be illiquid, they will be included in the
Funds maximum limitation of 25% of net assets invested in illiquid securities.
The Fund may also invest up to 20%
of its Managed Assets in common stocks, up to 20% of its Managed Assets in government securities (not including mortgage- or asset-backed securities issued or guaranteed by the U.S. Government or one of its sponsored entities), up to 20% of its
Managed Assets in municipal securities, up to 25% of its Managed Assets in illiquid securities and up to 15% of its Managed Assets in securities denominated in the currencies of emerging market countries; however, under normal circumstances the Fund
will not invest more than 10% of its Managed Assets in mortgage-backed, mortgage-related and other asset-backed securities (including mortgage- or asset-backed securities issued or guaranteed by the U.S. Government or one of its sponsored entities).
The Fund may invest in Rule 144A Securities. Rule 144A Securities are considered restricted securities because they are
not registered for sale to the general public and may only be resold to certain qualified institutional buyers. The Fund may invest in the securities of U.S. and non-U.S. issuers that are issued through non-U.S. offerings without registration with
the SEC pursuant to Regulation S under the Securities Act. Offerings of Regulation S securities may be conducted outside of the United States. Because Regulation S securities are subject to legal or contractual restrictions on resale, certain
Regulation S securities may be considered illiquid.
The Fund may enter into short sales, provided the dollar amount of
short sales at any time would not exceed 25% of the Managed Assets of the Fund. The Fund must designate collateral consisting of cash or liquid portfolio securities with a value equal to the current market value of the shorted securities, which is
marked-to-market daily. If the Fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities
sold short (which sales are commonly referred to as short sales against the box), the above requirements are not applicable.
The Fund may invest in securities of other investment companies, including open-end funds, closed-end funds or ETFs, that invest primarily in preferred and/or debt securities, to the extent permitted under Section 12(d)(1) of the
1940 Act, and the rules promulgated thereunder, or any exemption granted to the Fund under the 1940 Act. The Fund also may invest in other funds either during periods when it has large amounts of uninvested cash, such as the period shortly after the
Fund receives the proceeds of an offering of its common shares, or during periods when there is a shortage of attractive opportunities in the market.
On an overall basis, the Fund seeks to implement an investment strategy designed to minimize the U.S. federal income tax
consequences on income generated by the Fund. The Fund seeks to accomplish this primarily by (i) investing in dividend-paying securities that are eligible to pay dividends that qualify for U.S. federal income taxation at rates applicable to
long-term capital gain (tax-advantaged dividends), and complying with the holding period and other requirements for such favorable tax treatment; and (ii) offsetting any ordinary income with Fund expenses
and realized short-term capital gain against realized short-term capital loss and net realized long-term capital loss.
48
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
The Fund is non-diversified and as a result may invest a relatively high percentage of its
assets in a limited number of issuers. As a result, changes in the value of a single investment could cause greater fluctuations in the Funds share price than would occur in a more diversified fund.
The Fund may invest up to 25% of its Managed Assets in investments that may be illiquid (i.e., securities that may be
difficult to sell at a desirable time or price). The investment manager will be responsible for the day-to-day determination of the illiquidity of any security held by
the Fund. The Investment Manager will consider factors such as (i) the nature of the market for a security (including the institutional private resale market; the frequency of trades and quotes for the security; the number of dealers willing to
purchase or sell the security; the amount of time normally needed to dispose of the security; and the method of soliciting offers and the mechanics of transfer), (ii) the terms of certain securities or other instruments allowing for the disposition
to a third party or the issuer thereof (e.g., certain repurchase obligations and demand instruments) and (iii) other permissible relevant factors.
Temporary Defensive Positions. For temporary defensive purposes or to keep cash on hand fully invested, and following the
offering of Fund shares pending investment in securities that meet the Funds investment objectives, the Fund may invest up to 100% of its total assets in cash, cash equivalents, government securities and short-term fixed-income securities.
When and to the extent the Fund assumes a temporary defensive position, the Fund may not pursue or achieve its investment objectives.
Use of Leverage
The Fund currently seeks to enhance the level of its distributions and total return through the use of leverage. The Fund may
utilize leverage in an amount up to 33 1/3% of its managed assets through borrowings, including loans from certain financial institutions and/or the issuance of debt securities (collectively, Borrowings). Under the 1940 Act, the Fund may utilize
leverage through (i) Borrowings in an aggregate amount of up to 33 1/3% of the Funds total assets immediately after such Borrowings and (ii) the issuance of preferred stock (Preferred Shares) in an aggregate amount of up to 50% of the
Funds total assets immediately after such issuance. In addition, the Fund may utilize leverage through reverse repurchase agreements (Reverse Repurchase Agreements), in an aggregate amount up to 50% of the Funds total assets. The Fund
also may borrow money as a temporary measure for extraordinary or emergency purposes, including the payment of dividends and the settlement of securities transactions. The Fund may borrow in both U.S. and foreign (non-U.S.) currencies, and may use
derivatives and other transactions to manage any interest rate risk or currency exposure associated with its use of leverage. Borrowing in non-U.S. currencies will expose the Fund to foreign currency risk. See Foreign Currency and Currency
Hedging Risk below.
The Fund may also engage in various derivatives transactions to seek to generate return,
facilitate portfolio management and mitigate risks. Certain derivatives transactions effect a form of economic leverage on the Funds portfolio and may be subject to the risks associated with the use of leverage. There is no assurance that the
Fund will utilize leverage or, if leverage is utilized, that it will be successful. The net asset value of the Funds common shares may be reduced by the issuance or incurrence costs of any leverage. See Leverage Risk.
Effects of Leverage. Assuming that leverage in the form of Borrowings will represent up to 33% of the Funds Managed
Assets and charge interest or involve payment at a rate set by an interest rate transaction at an annual average rate of approximately 1.19%, the income generated by the Funds
49
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
portfolio (net of estimated expenses) must exceed 0.39% in order to cover such interest payments or payment rates and other expenses specifically
related to leverage. Of course, these numbers are merely estimates, used for illustration. Actual interest, or payment rates may vary frequently and may be significantly higher or lower than the rate estimated above.
The following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on
common share total return, assuming investment portfolio total returns (comprised of income and changes in the value of investments held in the Funds portfolio) of -10%,
-5%, 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns expected to be experienced by the Fund. The table
assumes leverage in an aggregate amount equal to 33% of the Funds Managed Assets. See Leverage Risk below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed Portfolio Total Return
|
|
|
-10
|
%
|
|
|
-5
|
%
|
|
|
0
|
%
|
|
|
5
|
%
|
|
|
10
|
%
|
Common Share Total Return
|
|
|
(15.4
|
)%
|
|
|
(8.0
|
)%
|
|
|
(0.6
|
)%
|
|
|
6.8
|
%
|
|
|
14.2
|
%
|
Common share total return is comprised of two elements the net investment income of the Fund
after paying expenses, including interest expenses on the Funds Borrowings as described above and dividend payments on any preferred shares issued by the Fund and gain and losses on the value of the securities the Fund owns. As required by the
rules of the SEC, the table assumes the Fund is more likely to suffer capital losses than to enjoy capital appreciation. For example, to assume a total return of 0%, the Fund must assume that the income it receives on its investments is entirely
offset by losses in the value of those securities.
Principal Risks of the Fund
The Fund is a non-diversified, closed-end
management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance
that the Fund will achieve its investment objectives.
Limited Operating History. As a newly organized
entity, the Fund has limited operating history. The Funds common shares have a limited history of public trading. See Note 1 in Notes to the Financial Statements.
Risk of Market Price Discount from Net Asset Value. Shares of closed-end investment
companies frequently trade at a discount from their NAV. This characteristic is a risk separate and distinct from the risk that NAV could decrease as a result of investment activities and may be greater for investors expecting to sell their shares
in a relatively short period following completion of this offering. Whether investors will realize gains or losses upon the sale of the shares will depend not upon the Funds NAV but entirely upon whether the market price of the shares at the
time of sale is above or below the investors purchase price for the shares. Because the market price of the shares will be determined by factors such as relative supply of and demand for shares in the market, general market and economic
conditions, and other factors beyond the control of the Fund, Fund shares may trade at, above or below NAV, or at below or above the initial public offering price.
Investment Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire
principal amount that you invest.
50
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Market Risk. Your investment in the Fund represents an indirect investment in the preferred securities, debt securities and
other investments owned by the Fund. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. The Fund may utilize leverage, which magnifies this risk. Your shares at any point in time may be
worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions. See Leverage Risk below.
Limited Term and Tender Offer Risks. Unless the limited term provision of the Funds Amended and Restated Declaration
of Trust (the Declaration of Trust) is amended by shareholders in accordance with the Declaration of Trust, or unless the Fund completes an Eligible Tender Offer and converts to perpetual existence, the Fund will terminate on or about the
Dissolution Date (subject to possible extension). The Fund is not a so called target date or life cycle fund whose asset allocation becomes more conservative over time as its target date, often associated with retirement,
approaches. In addition, the Fund is not a target term fund as its investment objective is not to return its original NAV on the Dissolution Date or in an Eligible Tender Offer. The Funds investment objectives and policies are not
designed to seek to return to investors that purchase shares in this offering their initial investment on the Dissolution Date or in an Eligible Tender Offer, and such investors and investors that purchase shares after the completion of this
offering may receive more or less than their original investment upon dissolution or in an Eligible Tender Offer.
Because the assets of the Fund will be liquidated in connection with the dissolution, the Fund will incur transaction costs in
connection with dispositions of portfolio securities. The Fund does not limit its investments to securities having a maturity date prior to the Dissolution Date and may be required to sell portfolio securities when it otherwise would not, including
at times when market conditions are not favorable, which may cause the Fund to lose money. In particular, the Funds portfolio may still have large exposures to illiquid securities as the Dissolution Date approaches, and losses due to portfolio
liquidation may be significant. Beginning one year before the Dissolution Date (the Wind-Down Period), the Fund may begin liquidating all or a portion of the Funds portfolio, and the Fund may deviate from its investment strategy and may not
achieve its investment objective. As a result, during the Wind-Down Period, the Funds distributions may decrease, and such distributions may include a return of capital. It is expected that common shareholders will receive cash in any
liquidating distribution from the Fund regardless of their participation in the Funds automatic dividend reinvestment plan. However, if on the Dissolution Date the Fund owns securities for which no market exists or securities that are trading
at depressed prices, such securities may be placed in a liquidating trust. The Fund cannot predict the amount, if any, of securities that will be required to be placed in a liquidating trust. The Fund may receive proceeds from the disposition of
portfolio investments that are less than the valuations of such investments by the Fund and, in particular, losses from the disposition of illiquid securities may be significant. The disposition of portfolio investments by the Fund could also cause
market prices of such instruments, and hence the NAV and market price of the common shares, to decline. In addition, disposition of portfolio investments will cause the Fund to incur increased brokerage and related transaction expenses.
Moreover, in conducting such portfolio transactions, the Fund may need to deviate from its investment policies and may not achieve
its investment objective. The Funds portfolio composition may change as its portfolio holdings mature or are called or sold in anticipation of an Eligible Tender Offer or the Dissolution Date. During such period(s), it is possible that the
Fund will hold a greater percentage of its total assets in shorter term and lower yielding securities and cash and cash equivalents than it would
51
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
otherwise, which may impede the Funds ability to achieve its investment objective and adversely impact the Funds performance and
distributions to common shareholders, which may in turn adversely impact the market value of the common shares. In addition, the Fund may be required to reduce its leverage, which could also adversely impact its performance. The additional cash or
cash equivalents held by the Fund could be obtained through reducing the Funds distributions to common shareholders and/or holding cash in lieu of reinvesting, which could limit the ability of the Fund to participate in new investment
opportunities. The Fund does not limit its investments to securities having a maturity date prior to or around the Dissolution Date, which may exacerbate the foregoing risks and considerations. A common shareholder may be subject to the foregoing
risks over an extended period of time, particularly if the Fund conducts an Eligible Tender Offer and is also subsequently terminated by or around the Dissolution Date.
If the Fund conducts an Eligible Tender Offer, the Fund anticipates that funds to pay the aggregate purchase price of shares
accepted for purchase pursuant to the tender offer will be first derived from any cash on hand and then from the proceeds from the sale of portfolio investments held by the Fund. In addition, the Fund may be required to dispose of portfolio
investments in connection with any reduction in the Funds outstanding leverage necessary in order to maintain the Funds desired leverage ratios following a tender offer. The risks related to the disposition of securities in connection
with the Funds dissolution also would be present in connection with the disposition of securities in connection with an Eligible Tender Offer. It is likely that during the pendency of a tender offer, and possibly for a time thereafter, the
Fund will hold a greater than normal percentage of its total assets in cash and cash equivalents, which may impede the Funds ability to achieve its investment objective and decrease returns to shareholders. The tax effect of any such
dispositions of portfolio investments will depend on the difference between the price at which the investments are sold and the tax basis of the Fund in the investments. Any capital gains recognized on such dispositions, as reduced by any capital
losses the Fund realizes in the year of such dispositions and by any available capital loss carryforwards, will be distributed to shareholders as capital gain dividends (to the extent of net long-term capital gains over net short-term capital
losses) or ordinary dividends (to the extent of net short-term capital gains over net long-term capital losses) during or with respect to such year, and such distributions will generally be taxable to common shareholders. If the Funds tax
basis for the investments sold is less than the sale proceeds, the Fund will recognize capital gains, which the Fund will be required to distribute to common shareholders. In addition, the Funds purchase of tendered common shares pursuant to a
tender offer will have tax consequences for tendering common shareholders and may have tax consequences for non-tendering common shareholders.
The purchase of common shares by the Fund pursuant to a tender offer will have the effect of increasing the proportionate interest
in the Fund of non-tendering common shareholders. All common shareholders remaining after a tender offer may be subject to proportionately higher expenses due to the reduction in the Funds total assets
resulting from payment for the tendered common shares. Such reduction in the Funds total assets may result in less investment flexibility, reduced diversification and greater volatility for the Fund, and may have an adverse effect on the
Funds investment performance. Such reduction in the Funds total assets may also cause common shares to become thinly traded or otherwise negatively impact secondary trading of common shares. A reduction in net assets, and the
corresponding increase in the Funds expense ratio, could result in lower returns and put the Fund at a disadvantage relative to its peers and potentially cause the Funds common shares to trade at a wider discount to NAV than it otherwise
would. Furthermore, the portfolio of the Fund following an Eligible
52
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Tender Offer could be significantly different and, therefore, common shareholders retaining an investment in the Fund could be subject to greater
risk. For example, the Fund may be required to sell its more liquid, higher quality portfolio investments to purchase common shares that are tendered in an Eligible Tender Offer, which would leave a less liquid, lower quality portfolio for remaining
shareholders. The prospects of an Eligible Tender Offer may attract arbitrageurs who would purchase the common shares prior to the tender offer for the sole purpose of tendering those shares which could have the effect of exacerbating the risks
described herein for shareholders retaining an investment in the Fund following an Eligible Tender Offer.
The Fund is
not required to conduct an Eligible Tender Offer. If the Fund conducts an Eligible Tender Offer, there can be no assurance that the number of tendered common shares would not result in the Fund having aggregate net assets below the Dissolution
Threshold, in which case the Eligible Tender Offer will be canceled, no common shares will be repurchased pursuant to the Eligible Tender Offer and the Fund will dissolve on the Dissolution Date (subject to possible extensions). Following the
completion of an Eligible Tender Offer in which the number of tendered common shares would result in the Fund having aggregate net assets greater than or equal to the Dissolution Threshold, the Board of Trustees may, by a Board Action Vote,
eliminate the Dissolution Date without shareholder approval. Thereafter, the Fund will have a perpetual term. The investment manager may have a conflict of interest in recommending to the Board that the Dissolution Date be eliminated because the
investment manager would continue to receive management fees on the remaining assets of the Fund while it remains in existence. The Fund is not required to conduct additional tender offers following an Eligible Tender Offer and conversion to
perpetual existence. Therefore, remaining common shareholders may not have another opportunity to participate in a tender offer. Shares of closed-end management investment companies frequently trade at a
discount from their NAV, and as a result remaining common shareholders may only be able to sell their Shares at a discount to NAV.
Preferred Securities Risk. Under normal market conditions, the Fund will invest at least 80% of its Managed Assets in a portfolio of preferred and other income securities. There are various risks associated with investing in
preferred securities, including those described below. In addition, the on-going COVID-19 outbreak has increased certain risks associated with investing in preferred
securities. The impact of the COVID-19 outbreak could persist for years to come and the full impact to financial markets is not yet known. See Geopolitical Risk below for additional information regarding the COVID-19 outbreak.
|
|
|
Deferral and Omission Risk. Preferred securities may include provisions that permit the
issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer. In certain cases, deferring or omitting distributions may be mandatory. If the Fund owns a preferred security that is
deferring its distributions, the Fund may be required to report income for tax purposes although it has not yet received such income. In addition, recent changes in bank regulations may increase the likelihood for issuers to defer or omit
distributions.
|
|
|
|
Credit and Subordination Risk. Credit risk is the risk that a preferred security in the
Funds portfolio will decline in price or the issuer of the security will fail to make dividend, interest or principal payments when due because the issuer experiences a decline in its financial status. Preferred securities are generally
subordinated to bonds and other debt instruments in a
|
53
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
|
companys capital structure in terms of having priority to corporate income, claims to corporate assets and liquidation payments, and therefore will be subject to greater credit risk than more senior debt
instruments.
|
|
|
|
Interest Rate Risk. Interest rate risk is the risk that preferred securities will decline in
value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall, and therefore the Fund may underperform during periods of rising interest rates. The Fund may be subject to
a greater risk of rising interest rates than would normally be the case due to the current period of historically low rates and the effect of government monetary policy initiatives and resulting market reaction to those initiatives. Preferred
securities without maturities or with longer periods before maturity may be more sensitive to interest rate changes.
|
|
|
|
Prepayment and Extension Risk. Prepayment risk is the risk that changes in interest rates,
credit spreads or other factors will result in the call (repayment) of a preferred security more quickly than expected, such that the Fund may have to invest the proceeds in lower yielding securities, or that expectations of such early call will
negatively impact the market price of the security. Extension risk is the risk that changes in the interest rates or credit spreads may result in diminishing call expectations, which can cause prices to fall.
|
|
|
|
Floating-Rate and
Fixed-to-Floating-Rate Securities Risk. The market value of floating-rate securities is a reflection of discounted expected cash flows based on expectations for
future interest rate resets. The market value of such securities may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. This risk
may also be present with respect to fixed-to-floating-rate securities in which the Fund may invest. A secondary risk associated with declining interest rates is the risk
that income earned by the Fund on floating-rate and fixed-to-floating-rate securities will decline due to lower coupon payments on floating-rate securities.
|
|
|
|
Call, Reinvestment and Income Risk. During periods of declining interest rates, an issuer may
be able to exercise an option to redeem its issue at par earlier than scheduled which is generally known as call risk. Recent regulatory changes may increase call risk with respect to certain types of preferred securities. If this occurs, the Fund
may be forced to reinvest in lower yielding securities. This is known as reinvestment risk. Preferred securities frequently have call features that allow the issuer to repurchase the security prior to its stated maturity. An issuer may redeem
preferred securities if the issuer can refinance the preferred securities at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer, or in the event of regulatory changes affecting the capital treatment
of a security. Another risk associated with a declining interest rate environment is that the income from the Funds portfolio may decline over time when the Fund invests the proceeds from new share sales at market rates that are below the
portfolios current earnings rate.
|
|
|
|
Liquidity Risk. Certain preferred securities may be substantially less liquid than many other
securities, such as common stocks or U.S. government securities. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying
the securities on its books.
|
|
|
|
Limited Voting Rights Risk. Generally, traditional preferred securities offer no voting rights
with respect to the issuer unless preferred dividends have been in arrears for a specified number of
|
54
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
|
periods, at which time the preferred security holders may elect a number of directors to the issuers board of directors. Generally, once all the arrearages have been paid, the preferred security holders
no longer have voting rights. Hybrid-preferred security holders generally have no voting rights.
|
|
|
|
Special Redemption Rights. In certain varying circumstances, an issuer of preferred securities
may redeem the securities prior to a specified date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in U.S. federal income tax or securities laws. As with call provisions, a redemption by the
issuer may have a negative impact on the return of the security held by the Fund. See Call, Reinvestment and Income Risk above and Regulatory Risk below.
|
|
|
|
New Types of Securities. From time to time, preferred securities, including hybrid-preferred
securities and contingent capital securities, have been, and may in the future be, offered having features other than those described herein. The Fund reserves the right to invest in these securities if the investment manager believes that doing so
would be consistent with the Funds investment objectives and policies. Since the market for these instruments would be new, the Fund may have difficulty disposing of them at a suitable price and time. In addition to limited liquidity, these
instruments may present other risks, such as high price volatility.
|
Debt Securities Risk.
Debt securities generally present two primary types of riskcredit risk, which refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due, and interest rate risk, which is
the risk that debt securities will decline in value because of changes in market interest rates. Debt securities also are subject to other similar risks as preferred securities, including call risk, extension risk and liquidity
risk.
Risk of Concentration in the Financials Sector. Because the Fund invests 25% or more
of its total assets in the financials sector (and may invest a substantial portion of its assets in the financial sector, including in one or more industries in the financial sector), it will be more susceptible to adverse economic or regulatory
occurrences affecting this sector, such as changes in interest rates, loan concentration, regulation and competition. In many countries, companies in the financials sector are regulated by governmental entities, which can increase costs for new
services or products and make it difficult to pass increased costs on to consumers. In certain areas, deregulation of financial companies has resulted in increased competition and reduced profitability for certain companies. The profitability of
many types of financial companies may be adversely affected in certain market cycles, including periods of rising interest rates, which may restrict the availability and increase the cost of capital, and declining economic conditions, which may
cause credit losses due to financial difficulties of borrowers. Because many types of financial companies are vulnerable to these economic cycles, the Funds investments in these companies may lose significant value during such periods.
Below Investment Grade and Unrated Securities Risk. The Fund may invest a significant portion of its assets in
below investment grade securities or securities that are unrated but judged to be below investment grade by the investment manager. Lower-rated securities, or equivalent unrated securities, which are commonly known as high yield
securities or junk securities generally involve greater volatility of price and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade
securities. It is reasonable to expect that any adverse economic conditions could disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those
securities to repay principal and interest on those securities.
55
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
NRSROs are private services that provide ratings of the credit quality of debt obligations, including convertible securities.
Ratings assigned by an NRSRO are not absolute standards of credit quality and do not evaluate market risks or the liquidity of securities. NRSROs may fail to make timely changes in credit ratings and an issuers current financial condition may
be better or worse than a rating indicates.
In addition, the Fund may invest a significant portion of its assets in
unrated securities (securities which are not rated by an NRSRO) if the investment manager determines that purchase of the securities is consistent with the Funds investment objectives and policies. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the investment manager may not accurately evaluate the securitys comparative credit rating. If a security is unrated, the investment manager will assign a rating using its own analysis of
issuer quality.
Contingent Capital Securities Risk. CoCos, sometimes referred to as contingent convertible
securities, are debt or preferred securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer, for example, an automatic write-down of principal or a mandatory conversion into common stock of
the issuer under certain circumstances, such as the issuers capital ratio falling below a certain level. CoCos may be subject to an automatic write-down (i.e., the automatic write-down of the principal amount or value of the securities,
potentially to zero, and the cancellation of the securities) under certain circumstances, which could result in the Fund losing a portion or all of its investment in such securities. In addition, the Fund may not have any rights with respect to
repayment of the principal amount of the securities that has not become due or the payment of interest or dividends on such securities for any period from (and including) the interest or dividend payment date falling immediately prior to the
occurrence of such automatic write-down. An automatic write-down could also result in a reduced income rate if the dividend or interest payment is based on the securitys par value. If a CoCo provides for mandatory conversion of the security
into common shares of the issuer under certain circumstances, such as an adverse event, the Fund could experience a reduced income rate, potentially to zero, as a result of the issuers common shares not paying a dividend. In addition, a
conversion event would likely be the result of or related to the deterioration of the issuers financial condition (e.g., such as a decrease in the issuers capital ratio) and status as a going concern, so the market price of the
issuers common shares received by the Fund may have declined, perhaps substantially, and may continue to decline, which may adversely affect the Funds NAV. Further, the issuers common shares would be subordinate to the
issuers other security classes and therefore worsen the Funds standing in a bankruptcy proceeding. In addition, most CoCos are considered to be high yield or junk securities and are therefore subject to the risks of investing
in below investment grade securities. See below Below Investment Grade and Unrated Securities Risk below.
Foreign (Non-U.S.) and Emerging Market Securities Risk. Risks of investing in
foreign securities, which can be expected to be greater for investments in emerging markets, include currency risks, future political and economic developments and possible imposition of foreign withholding or other taxes on income or proceeds
payable on the securities. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping
standards and requirements as domestic issuers.
The Fund may hold foreign securities of developed market issuers and
emerging market issuers. Investing in securities of companies in emerging markets may entail special risks relating to potential economic, political or social instability and the risks of expropriation, nationalization, confiscation, trade
56
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
sanctions or embargoes or the imposition of restrictions on foreign investment, the lack of hedging instruments, and repatriation of capital
invested. Emerging securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The limited size of emerging securities markets and limited trading value compared to the volume of
trading in U.S. securities could cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market size may cause prices to be unduly influenced by traders who control large positions.
Adverse publicity and investors perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets. Many emerging market countries have experienced substantial,
and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates and corresponding currency devaluations have had and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
Foreign Currency and Currency Hedging Risk. Although the Fund will
report its NAV and pay dividends in U.S. dollars, foreign securities often are purchased with and make interest and dividend payments in foreign currencies. Therefore, the Funds investments in foreign securities will be subject to foreign
currency risk, which means that the Funds NAV could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of
currency controls or other political developments in the United States or abroad. These fluctuations may have a significant adverse impact on the value of the Funds portfolio and/or the level of Fund distributions made to shareholders. Certain
foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal, dividends and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
The Fund may (but is not required to) engage in investments that are designed to hedge the Funds foreign currency
risks, including foreign currency forward contracts, foreign currency futures contracts, put and call option on foreign currencies and foreign currency swaps. Such transactions may reduce returns or increase volatility, perhaps substantially. While
these practices will be entered into to seek to manage these risks, these practices may not prove to be successful or may have the effect of limiting the gains from favorable market movements.
Foreign currency forward contracts, foreign currency futures contracts, OTC options on foreign currencies and foreign currency
swaps are subject to the risk of default by the counterparty and can be illiquid. These currency hedging transactions, as well as the futures contracts and exchange-listed options in which the Fund may invest, are subject to many of the risks of,
and can be highly sensitive to changes in the value of, the related currency or other reference asset. As such, a small investment could have a potentially large impact on the Funds performance. Whether or not the Fund engages in currency
hedging transactions, the Fund may experience a decline in the value of its portfolio securities, in U.S. dollar terms, due solely to fluctuations in currency exchange rates. Use of currency hedging transactions may cause the Fund to experience
losses greater than if the Fund had not engaged in such transactions.
The Funds transactions in foreign
currencies may increase or accelerate the Funds recognition of ordinary income and may affect the timing or character of the Funds distributions.
57
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Convertible Securities Risk. Although to a lesser extent than with nonconvertible fixed income securities, the market value
of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of convertible securities tends to vary with
fluctuations in the market value of the underlying common stock. A unique feature of convertible securities is that as the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a yield basis, and
so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the prices of the convertible securities tend to rise as a reflection of the value of the
underlying common stock. While no securities investments are without risk, investments in convertible securities generally entail less risk than investments in common stock of the same issuer.
Derivatives Risk. Derivatives transactions can be highly volatile and involve various types and degrees of risk, depending
upon the characteristics of the particular derivative, including the imperfect correlation between the value of such instruments and the underlying assets, the possible default of the other party to the transaction and illiquidity of the derivative
instruments. Derivatives transactions may entail investment exposures that are greater than their cost would suggest, meaning that a small investment in derivatives could have a large potential impact on the Funds performance, effecting a form
of investment leverage on the Funds portfolio. In certain types of derivatives transactions the Fund could lose the entire amount of its investment; in other types of derivatives transactions the potential loss is theoretically unlimited.
The market for many derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant,
rapid and unpredictable changes in the prices for derivatives transactions. The Fund could experience losses if it were unable to liquidate a derivative position because of an illiquid secondary market. Although both OTC and exchange-traded
derivatives markets may experience lack of liquidity, OTC non-standardized derivatives transactions are generally less liquid than exchange-traded instruments. The illiquidity of the derivatives markets may be
due to various factors, including congestion, disorderly markets, limitations on deliverable supplies, the participation of speculators, government regulation and intervention, and technical and operational or system failures. In addition, the
liquidity of a secondary market in an exchange-traded derivative contract may be adversely affected by daily price fluctuation limits established by the exchanges which limit the amount of fluctuation in an exchange-traded contract price
during a single trading day. Once the daily limit has been reached in the contract, no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open positions. Prices have in the past moved beyond the daily limit on
a number of consecutive trading days. If it is not possible to close an open derivative position entered into by the Fund, the Fund would continue to be required to make cash payments of variation (or mark-to-market) margin in the event of adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell portfolio securities to meet variation margin requirements at a time
when it may be disadvantageous to do so. The absence of liquidity may also make it more difficult for the Fund to ascertain a market value for such instruments. The inability to close derivatives transactions positions also could have an adverse
impact on the Funds ability to effectively hedge its portfolio.
Successful use of derivatives transactions also
is subject to the ability of the investment manager to predict correctly movements in the direction of the relevant market and, to the extent the transaction is entered into for hedging purposes, to ascertain the appropriate correlation between the
transaction
58
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
being hedged and the price movements of the derivatives. Derivatives transactions entered into to seek to manage the risks of the Funds
portfolio of securities may have the effect of limiting gains from otherwise favorable market movements. The use of derivatives transactions may result in losses greater than if they had not been used (and a loss on a derivatives transaction
position may be larger than the gain in a portfolio position being hedged), may require the Fund to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the
Fund can realize on an investment, or may cause the Fund to hold a security that it might otherwise sell. Amounts paid by the Fund as premiums and cash or other assets held as collateral with respect to derivatives transactions may not otherwise be
available to the Fund for investment purposes. The use of currency transactions can result in the Fund incurring losses as a result of the imposition of exchange controls, political developments, government intervention or failure to intervene,
suspension of settlements or the inability of the Fund to deliver or receive a specified currency.
The Fund may enter
into swap, cap or other transactions to attempt to protect itself from increasing interest or dividend expenses resulting from increasing short-term interest rates on any leverage it incurs or increasing interest rates on securities held in its
portfolio. A decline in interest rates may result in a decline in the value of the transaction, which may result in a decline in the NAV of the Fund. A sudden and dramatic decline in interest rates may result in a significant decline in the NAV of
the Fund. Depending on the state of interest rates in general, the use of interest rate hedging transactions could enhance or harm the overall performance of the Fund.
In the event the Fund enters into forward currency contracts for hedging purposes, the Fund will be subject to currency exchange
rates risk. Currency exchange rates may fluctuate significantly over short periods of time and also can be affected unpredictably by intervention of U.S. or foreign governments or central banks, or the failure to intervene, or by currency controls
or political developments in the United States or abroad. The Funds success in these transactions will depend principally on the ability of the investment manager to predict accurately future foreign currency exchange rates. Additional risks
associated with derivatives trading include counterparty risk, liquidity risk and tracking/correlation risk.
The
Funds investments in forward currency contracts and interest rate swaps would subject the Fund to risks specific to derivatives transactions, including: the imperfect correlation between the value of such instruments and the underlying assets
of the Fund, which creates the possibility that the loss on such instruments may be greater than the gain in the value of the underlying assets in the Funds portfolio; the loss of principal; the possible default of the other party to the
transaction; and illiquidity of the derivative investments. Furthermore, the ability to successfully use derivative instruments depends on the ability of the investment manager to predict pertinent market movements, which cannot be assured. Thus,
the use of derivative instruments for hedging, currency or interest rate management, or other purposes may result in losses greater than if they had not been used.
Structured notes and other related instruments carry risks similar to those of more traditional derivatives such as futures,
forward and option contracts. However, structured instruments may entail a greater degree of market risk and volatility than other types of debt obligations.
The Fund will be subject to credit risk with respect to the counterparties to certain derivatives transactions entered into by the
Fund. Derivatives may be purchased on established exchanges or through privately negotiated OTC transactions. Each party to an OTC derivative bears the risk that the counterparty will default.
59
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such
circumstances. The counterparty risk for cleared derivatives transactions is generally lower than for uncleared OTC derivatives transactions since generally a clearing organization becomes substituted for each counterparty to a cleared derivative
contract and, in effect, guarantees the parties performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or
its members, will satisfy their obligations to the Fund.
Rule 144A Securities Risk. Rule 144A Securities are
considered restricted securities because they are not registered for sale to the general public and may only be resold to certain qualified institutional buyers. Institutional markets for Rule 144A Securities that exist or may develop may provide
both readily ascertainable values for such securities and the ability to promptly sell such securities. However, if there are an insufficient number of qualified institutional buyers interested in purchasing Rule 144A Securities held by the Fund,
the Fund will be subject to liquidity risk and thus may not be able to sell the Rule 144A Securities at a desirable time or price.
Regulation S Securities Risk. Regulation S securities are offered through non-U.S. offerings without registration with the SEC pursuant to Regulation S of the Securities Act. Regulation
S securities may be relatively less liquid as a result of legal or contractual restrictions on resale. Because Regulation S securities are generally less liquid than registered securities, the Fund may take longer to liquidate these positions than
publicly traded securities or may not be able to sell them at the price desired. Furthermore, companies whose securities are not publicly traded may not be subject to the disclosure and other investor protection requirements that would be applicable
if their securities were publicly traded or otherwise offered in the United States. Accordingly, Regulation S securities may involve a high degree of business and financial risk and may result in losses to the Fund.
LIBOR Risk. Many financial instruments are tied to the London Interbank Offered Rate, or LIBOR, to determine
payment obligations, financing terms, hedging strategies, or investment value. LIBOR is the offered rate for short-term Eurodollar deposits between major international banks. The Head of the UK Financial Conduct Authority (the FCA) and LIBORs
administrator, ICE Benchmark Administration (IBA) announced that most LIBOR settings will no longer be published after June 30, 2023, with the remainder of LIBOR publications to end at the end of 2021. It is possible that the FCA may compel the IBA
to publish a subset of LIBOR settings after these dates on a synthetic basis, but any such publications would be considered non-representative of the underlying market. Alternatives to LIBOR are in development in many major financial
markets, including a Secured Overnight Financing Rate (SOFR), a broad measure of secured overnight U.S. Treasury repo rates, which is intended to replace U.S. dollar LIBOR. Bank working groups and regulators in other countries have suggested other
alternatives for their markets, including the Sterling Overnight Interbank Average Rate (SONIA) in England. Other countries are introducing their own local-currency-denominated alternative reference rates for short-term lending and global consensus
on alternative rates is lacking.
There remains uncertainty and risk regarding the willingness and ability of issuers
and lenders to include enhanced provisions in new and existing contracts or instruments, the suitability of the proposed replacement rates, and the process for amending existing contracts and instruments remains unclear. As such, the transition away
from LIBOR may lead to increased volatility and illiquidity in markets that
60
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
are tied to LIBOR, reduced values of, inaccurate valuations of, and miscalculations of payment amounts for LIBOR-related investments or investments
in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and reduced effectiveness of hedging strategies, adversely affecting the Funds performance or NAV. In addition, any alternative reference rate may be an
ineffective substitute resulting in prolonged adverse market conditions for the Fund. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the cessation of LIBOR
publications.
Other Investment Companies Risk. To the extent the Fund invests a portion of its assets in
investment companies, including open-end funds, closed-end funds, ETFs and other types of pooled investment funds, those assets will be subject to the risks of the
purchased investment companies portfolio securities, and a shareholder in the Fund will bear not only his or her proportionate share of the Funds expenses, but also indirectly the expenses of the purchased investment companies.
Shareholders would therefore be subject to duplicative expenses to the extent the Fund invests in other investment companies. Risks associated with investments in closed-end funds also generally include the
risks associated with the Funds structure as a closed-end investment company, including market risk, leverage risk, risk of market price discount from NAV, risk of anti-takeover provisions and non-diversification. In addition, investments in closed-end funds may be subject to dilution risk, which is the risk that strategies employed by a closed-end fund, such as rights offerings, may, under certain circumstances, have the effect of reducing its share price and the Funds proportionate interest. In addition, restrictions under the 1940 Act may
limit the Funds ability to invest in other investment companies to the extent desired.
The SEC has adopted Rule 12d1-4 permitting fund of fund arrangements subject to various conditions, and rescinding the present rule and certain exemptive relief previously granted. Once in effect, Rule
12d1-4 may adversely affect the Funds ability to invest in other investment companies and could also significantly affect the Funds ability to redeem its investments in other investment companies,
making such investments less attractive. The effects of rule and other regulatory changes are not known as of the date of this report, but they could cause the Fund to incur losses, realize taxable gains distributable to shareholders, incur greater
or unexpected expenses or experience other adverse consequences.
Common Stock Risk. The Fund may invest in
common stocks. Common stocks are subject to special risks. Although common stocks have historically generated higher average returns than fixed-income securities over the long-term, common stocks also have experienced significantly more volatility
in returns. Common stocks may be more susceptible to adverse changes in market value due to issuer specific events or general movements in the equities markets. A drop in the stock market may depress the price of common stocks held by the Fund.
Common stock prices fluctuate for many reasons, including changes in investors perceptions of the financial condition of an issuer or the general condition of the relevant stock market, or the occurrence of political or economic events
affecting issuers. For example, an adverse event, such as an unfavorable earnings report, may depress the value of common stock in which the Fund has invested; the price of common stock of an issuer may be particularly sensitive to general movements
in the stock market; or a drop in the stock market may depress the price of most or all of the common stocks held by the Fund. Also, common stock of an issuer in the Funds portfolio may decline in price if the issuer fails to make anticipated
dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial
61
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
condition. The common stocks in which the Fund will invest are typically subordinated to preferred securities, bonds and other debt instruments in
a companys capital structure in terms of priority to corporate income and assets, and, therefore, will be subject to greater risk than the preferred securities or debt instruments of such issuers. In addition, common stock prices may be
sensitive to rising interest rates as the costs of capital rise and borrowing costs increase.
Government Securities
Risk. Not all obligations of the U.S. Government, its agencies and instrumentalities are backed by the full faith and credit of the U.S. Treasury. Some obligations are backed only by the credit of the issuing agency or instrumentality, and in
some cases there may be some risk of default by the issuer. Any guarantee by the U.S. Government or its agencies or instrumentalities of a security held by the Fund does not apply to the market value of such security or to Fund shares. In addition,
a security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices of such securities are not guaranteed and
will fluctuate. In addition, because many types of U.S. Government securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities.
Municipal Securities Risk. Municipal securities are debt obligations issued by states or by political subdivisions or
authorities of states. Municipal securities are typically designated as general obligation bonds, which are general obligations of a governmental entity that are backed by the taxing power of such entity, or revenue bonds, which are payable from the
income of a specific project or authority and are not supported by the issuers power to levy taxes. Municipal securities are long-term fixed rate debt obligations that generally decline in value with increases in interest rates, when an
issuers financial condition worsens or when the rating on a bond is decreased. Many municipal securities may be called or redeemed prior to their stated maturity. Lower-quality revenue bonds and other credit-sensitive municipal securities
carry higher risks of default than general obligation bonds. In addition, the amount of public information available about municipal securities is generally less than that for corporate equities or bonds. Special factors, such as legislative
changes, local and business developments, and public perception, may adversely affect the yield and/or value of the Funds investments in municipal securities. Other factors include the general conditions of the municipal securities market, the
size of the particular offering, the maturity of the obligation and the rating of the issue.
The cost associated with
combating the outbreak of COVID-19 and its negative impact on tax revenues has adversely affected the financial condition of state and local governments. In the past, a number of municipal issuers have
defaulted on obligations, were downgraded or commenced insolvency proceedings during economic or market turmoil or a recession. The effects of this outbreak could affect the ability of state and local governments to make payments on debt obligations
when due and could adversely impact the value of their bonds, which could negatively impact the performance of the Fund.
Restricted and Illiquid Securities Risk. The Fund may invest in investments that may be illiquid (i.e., securities
that may be difficult to sell at a desirable time or price). Illiquid securities are securities that are not readily marketable and may include some restricted securities, which are securities that may not be resold to the public without an
effective registration statement under the Securities Act or, if they are unregistered, may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Illiquid investments involve the risk that the securities
will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying the securities on
62
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
its books. Restricted securities and illiquid securities are often more difficult to value and the sale of such securities often requires more time
and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of liquid securities trading on national securities exchanges or in the OTC markets. Contractual restrictions on the resale of securities
result from negotiations between the issuer and purchaser of such securities and therefore vary substantially in length and scope. To dispose of a restricted security that the Fund has a contractual right to sell, the Fund may first be required to
cause the security to be registered. A considerable period may elapse between a decision to sell the securities and the time when the Fund would be permitted to sell, during which time the Fund would bear market risks.
Leverage Risk. The use of leverage is a speculative technique and there are special risks and costs associated with
leverage. The NAV of the Funds shares may be reduced by the issuance and ongoing costs of leverage. So long as the Fund is able to invest in securities that produce an investment yield that is greater than the total cost of leverage, the
leverage strategy will produce higher current net investment income for the shareholders. On the other hand, to the extent that the total cost of leverage exceeds the incremental income gained from employing such leverage, shareholders would realize
lower net investment income. In addition to the impact on net income, the use of leverage will have an effect of magnifying capital appreciation or depreciation for shareholders. Specifically, in an up market, leverage will typically generate
greater capital appreciation than if the Fund were not employing leverage. Conversely, in down markets, the use of leverage will generally result in greater capital depreciation than if the Fund had been unlevered. To the extent that the Fund is
required or elects to reduce its leverage, the Fund may need to liquidate investments, including under adverse economic conditions which may result in capital losses potentially reducing returns to shareholders. The use of leverage also results in
the investment management fees payable to the investment manager being higher than if the Fund did not use leverage and can increase operating costs, which may reduce total return. In some market conditions, the Fund may not be able to employ
leverage to the extent or at the cost desired. This could prevent the Fund from executing its portfolio strategies or could otherwise depress shareholder returns. There can be no assurance that a leveraging strategy will be successful during any
period in which it is employed.
Additional Risk Considerations
Tax Risk. No assurance can be given as to what percentage of the distributions paid on the common shares of the Fund, if
any, will consist of tax-advantaged qualified dividend income or long-term capital gain or what the tax rates on various types of income will be in future years. The maximum long-term capital gain tax rate
applicable to qualified dividend income is currently 20%, 15%, or 0% for individuals depending on the amount of their taxable income for the year. An additional 3.8% Medicare tax will also apply in the case of some individuals. In addition, it may
be difficult to obtain information regarding whether distributions by non-U.S. entities in which the Fund invests should be regarded as qualified dividend income. Furthermore, to receive qualified dividend
income treatment, the Fund must meet holding period and other requirements with respect to the dividend-paying securities in its portfolio, and the shareholder must meet holding period and other requirements with respect to the Funds common
shares. Holding periods may be affected by certain of the Funds transactions in options and other derivatives. There can be no guarantee that U.S. federal tax laws will not change in the future.
63
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Active Management Risk. As an actively managed portfolio, the value of the Funds investments could decline because the
financial condition of an issuer may change (due to such factors as management performance, reduced demand or overall market changes), financial markets may fluctuate or overall prices may decline, or the investment managers investment
techniques could fail to achieve the Funds investment objectives or negatively affect the Funds investment performance.
Portfolio Turnover Risk. The Fund may engage in portfolio trading when considered appropriate, but short-term trading will not be used as the primary means of achieving the Funds investment objectives. There are no
limits on portfolio turnover, and investments may be sold without regard to length of time held when, in the opinion of the investment manager, investment considerations warrant such action. A higher portfolio turnover rate results in
correspondingly greater brokerage commissions and other transactional expenses that are borne by the Fund. High portfolio turnover may result in the realization of net short-term capital gains by the Fund that, when distributed to shareholders,
would be taxable to such shareholders as ordinary income.
Non-Diversified
Status. Because the Fund, as a non-diversified investment company, may invest in a smaller number of individual issuers than a diversified investment company, an investment in the Fund presents greater
risk to you than an investment in a diversified company.
Anti-Takeover Provisions. Certain provisions of the
Funds Declaration of Trust and Bylaws could have the effect of limiting the ability of other entities or persons to acquire control of the Fund or to modify the Funds structure. The provisions may have the effect of depriving you of an
opportunity to sell your shares at a premium over prevailing market prices and may have the effect of inhibiting conversion of the Fund to an open-end investment company.
Geopolitical Risk. Occurrence of global events similar to those in recent years, such as war, terrorist attacks, natural or
environmental disasters, country instability, infectious disease epidemics, such as that caused by the COVID-19 virus, state laws and government initiatives including foreclosure and eviction moratoria, market instability, debt crises and
downgrades, embargoes, tariffs, sanctions and other trade barriers and other governmental trade or market control programs, the potential exit of a country from its respective union and related geopolitical events, may result in market volatility
and may have long-lasting impacts on both the U.S. and global financial markets. Additionally, those events, as well as other changes in foreign and domestic political and economic conditions, could adversely affect individual issuers or related
groups of issuers, securities markets, interest rates, secondary trading, credit ratings, inflation, investor sentiment and other factors affecting the value of the Funds investments.
The outbreak of COVID-19 and efforts to contain its spread have resulted in, among other things, extreme volatility in the
financial markets and severe losses, reduced liquidity of many instruments, significant travel restrictions, significant disruptions to business operations, supply chains and customer activity, lower consumer demand for goods and services, service
and event cancellations, reductions and other changes, strained healthcare systems, as well as general concern and uncertainty. The impact of the COVID-19 outbreak has negatively affected the global economy, the economies of individual countries,
and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Pandemics may also exacerbate other pre-existing political, social, economic, market and financial risks. The
effects of the outbreak in developing or emerging market countries may be greater due to generally less established health care systems and supply chains. Public health crises caused by the COVID-19 outbreak may exacerbate other
64
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could impair the Funds ability to maintain operational standards (such as with respect to satisfying redemption requests),
disrupt the operations of the Funds service providers, adversely affect the value and liquidity of the Funds investments, and negatively impact the Funds performance and your investment in the Fund.
On January 31, 2020, the United Kingdom (UK) withdrew from the European Union (EU) (referred to as Brexit),
commencing a transition period that ended on December 31, 2020. The EU-UK Trade and Cooperation Agreement, a bilateral trade and cooperation deal governing the future relationship between the UK and the EU (TCA), provisionally went into
effect on January 1, 2021, and entered into force officially on May 1, 2021. Notwithstanding the TCA, following the transition period, there is likely to be considerable uncertainty as to the UKs post-transition framework, including how the
financial markets will react. As this process unfolds, markets may be further disrupted. Given the size and importance of the UKs economy, uncertainty about its legal, political and economic relationship with the remaining member states of the
EU may continue to be a source of instability.
Growing tensions, including trade disputes, between the United States
and other nations, or among foreign powers, and possible diplomatic, trade or other sanctions could adversely impact the global economy, financial markets and the Fund. The strengthening or weakening of the U.S. dollar relative to other currencies
may, among other things, adversely affect the Funds investments denominated in non-U.S. dollar currencies. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events
may have, and the duration of those effects.
Real Estate Risk. To the extent that the Fund invests in real
estate related investments, including REITs or real-estate linked derivative instruments, it will be subject to the risks associated with owning real estate and with the real estate industry generally. Property values may fall due to increasing
vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. Real estate company prices also may drop because of the failure of borrowers to pay their loans and poor management, and residential
developers, in particular, could be negatively impacted by falling home prices, slower mortgage origination and rising construction costs. REITs generally are dependent upon management skills and may not be diversified. REITs are also subject to
heavy cash flow dependency, defaults by borrowers and self-liquidation. In addition, REITs could possibly fail to (i) qualify for favorable tax treatment under applicable tax law, or (ii) maintain their exemptions from registration under
the 1940 Act. The above factors may also adversely affect a borrowers or a lessees ability to meet its obligations to the REIT. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as
a mortgagee or lessor and may incur substantial costs associated with protecting its investments.
Cyber Security
Risk. With the increased use of technologies such as the Internet and the dependence on computer systems to perform necessary business functions, the Fund and its service providers (including the investment manager) may be susceptible to
operational and information security risks resulting from cyber-attacks and/or other technological malfunctions. In general, cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others,
stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, gaining unauthorized access to digital systems for
purposes of misappropriating assets and causing
65
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service. Successful cyber-attacks against, or security breakdowns of, the Fund, the investment manager, or a custodian, transfer agent, or other affiliated or
third-party service provider may adversely affect the Fund or its shareholders. For instance, cyber-attacks may interfere with the processing of shareholder transactions, affect the Funds ability to calculate its NAV, cause the release of
private shareholder information or confidential Fund information, impede trading, cause reputational damage, and subject the Fund to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional
compliance costs. Furthermore, as a result of breaches in cyber security or other operational and technology disruptions or failures, an exchange or market may close or issue trading halts on specific securities or an entire market, which may result
in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or unable to accurately price its investments. While the Fund has established business continuity plans and systems designed to prevent
cyber-attacks, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Similar types of cyber security risks also are present for issuers of securities in which the Fund
invests, which could result in material adverse consequences for such issuers, and may cause the Funds investment in such securities to lose value.
Each of the Fund and the investment manager may have limited ability to prevent or mitigate cyber-attacks or security or technology
breakdowns affecting the Funds third-party service providers. While the Fund has established business continuity plans and systems designed to prevent or reduce the impact of cyber-attacks, such plans and systems are subject to inherent
limitations.
Regulatory Risk. The U.S. government has proposed and adopted multiple regulations that could have
a long-lasting impact on the Fund and on the mutual fund industry in general. The SECs final rules, related requirements and amendments to modernize reporting and disclosure, along with other potential upcoming regulations, could, among other
things, restrict the Funds ability to engage in transactions, impact flows into the Fund and/or increase overall expenses of the Fund. In addition, the SEC, Congress, various exchanges and regulatory and self-regulatory authorities, both
domestic and foreign, have undertaken reviews of the use of derivatives by registered investment companies, which could affect the nature and extent of instruments used by the Fund. While the full extent of all of these regulations is still unclear,
these regulations and actions may adversely affect both the Fund and the instruments in which the Fund invests and its ability to execute its investment strategy. Similarly, regulatory developments in other countries may have an unpredictable and
adverse impact on the Fund.
The SEC recently adopted Rule 18f-4 under the 1940 Act relating to a registered investment
companys use of derivatives and certain financing transactions (such as reverse repurchase transactions) that could potentially require the Fund to observe more stringent requirements than are currently imposed by the 1940 Act. Among other
things, Rule 18f-4 will require funds that invest in derivative instruments beyond a specified limited amount to apply a value-at-risk based limit to their use of certain derivative instruments and financing transactions and to adopt and implement a
derivatives risk management program. A fund that uses derivative instruments in a limited amount will not be subject to the full requirements of Rule 18f-4. In connection with the adoption of Rule 18f-4, funds will no longer be required to comply
with the asset segregation framework arising from prior SEC guidance for covering certain derivative instruments and related transactions. Rule 18f-4 may substantially curtail the
66
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Funds ability to use derivative instruments as part of the Funds investment strategy and could ultimately prevent the Fund from being
able to achieve its investment goals. Compliance with Rule 18f-4 will not be required until approximately August 2022. As the Fund comes into compliance, the Funds approach to asset segregation and coverage requirements will be impacted.
Mortgage- and Asset-Backed Securities Risk. The risks associated with mortgage-related securities include:
(1) credit risk associated with the performance of the underlying mortgage properties and of the borrowers owning these properties; (2) adverse changes in economic conditions and circumstances, which are more likely to have an adverse
impact on mortgage-related securities secured by loans on certain types of commercial properties than on those secured by loans on residential properties; (3) prepayment risk, which can lead to significant fluctuations in value of the
mortgage-related security; (4) loss of all or part of the premium, if any, paid; and (5) decline in the market value of the security, whether resulting from changes in interest rates or prepayments on the underlying mortgage collateral.
Asset-backed securities involve certain risks in addition to those presented by mortgage-related securities:
(1) primarily, these securities do not have the benefit of the same security interest in the underlying collateral as mortgage-related securities and are more dependent on the borrowers ability to pay; (2) credit card receivables are
generally unsecured, and the debtors are entitled to the protection of a number of state and Federal consumer credit laws, many of which give debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due;
and (3) most issuers of automobile receivables permit the servicers to retain possession of the underlying obligations. If these obligations are sold to another party, there is a risk that the purchaser would acquire an interest superior to
that of the holders of the related automobile receivables. In addition, because of the large number of vehicles involved in a typical issuance and technical requirements under state laws, the trustee for the holders of the automobile receivables may
not have an effective security interest in all of the obligations backing such receivables. There is a possibility that recoveries on repossessed collateral may not, in some cases, be able to support payments on these securities.
Investment Restrictions
The Fund has adopted certain investment limitations that are fundamental and may not be changed without the approval of the holders of a majority of the outstanding common shares and, if issued, preferred shares voting as a single
class, and the approval of the holders of a majority of the preferred shares voting as a separate class. Under these limitations, the Fund may not: (1) issue senior securities (including borrowing money for other than temporary purposes) except
in conformity with the limits set forth in the 1940 Act or pursuant to exemptive relief therefrom, or pledge, mortgage or hypothecate its assets other than to secure such issuances or borrowings or in connection with permitted investment strategies;
provided that, notwithstanding the foregoing, the Fund may borrow up to an additional 5% of its total assets for temporary purposes; (2) act as an underwriter of securities issued by other persons, except insofar as the Fund may be deemed an
underwriter in connection with the disposition of securities; (3) Purchase or sell real estate, except that the Fund may invest in securities of companies that deal in real estate or are engaged in the real estate business, including REITs, and
loans and other securities secured by real estate or interests therein, and the Fund may hold and sell real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Funds ownership
of such securities and loans; (4) make loans to other persons
67
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
except through the lending of securities held by it (but not to exceed a value of one-third of total
assets), through the use of repurchase agreements, and by the purchase of debt securities; or (5) invest more than 25% of its total assets in securities of issuers in any one industry, except that the Fund will invest 25% or more of its total
assets in the financials sector, which is comprised of the banking, diversified financials, real estate (including REITs) and insurance industries. The Fund may purchase and sell commodities or commodity contracts, including futures contracts, to
the maximum extent permitted by law. When used with respect to particular shares of the Fund, a majority of the outstanding shares means (i) 67% or more of the shares present at a meeting, if the holders of more than 50% of the shares
are present or represented by proxy, or (ii) more than 50% of the shares, whichever is less. With respect to investment restriction number 5, the Fund will invest 25% or more of its total assets in the financial sector, which is comprised of
the banking, diversified financials, real estate (including REITs) and insurance industries. From time to time, the Fund may have 25% or more of its total assets invested in any one or more of those industries that make up the financials sector.
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The Board of Trustees of the Fund, including a majority of the trustees who are not parties to the Funds investment
management agreement (the Management Agreement), or interested persons of any such party (the Independent Trustees), has the responsibility under the Investment Company Act of 1940 to approve the Funds Management Agreement for its initial two
year term and its continuation annually thereafter at a meeting of the Board of Trustees called for the purpose of voting on the approval or continuation. The Management Agreement was discussed at a meeting of the Independent Trustees, in their
capacity as the Contract Review Committee, held on June 8, 2021 and at meetings of the full Board of Trustees held on March 16, 2021 and June 15, 2021. The Independent Trustees, in their capacity as the Contract Review Committee, also
discussed the Management Agreement in executive session on June 15, 2021. At the meeting of the full Board of Trustees on June 15, 2021, the Management Agreement was unanimously continued for a term ending June 30, 2022 by the
Funds Board of Trustees, including the Independent Trustees. The Independent Trustees were represented by independent counsel who assisted them in their deliberations during the meetings and executive session.
In considering whether to continue the Management Agreement, the Board of Trustees reviewed materials provided by an independent
data provider, which included, among other items, fee, expense and performance information compared to peer funds (the Peer Funds and, collectively with the Fund, the Peer Group) and performance comparisons to a larger category universe; summary
information prepared by the Funds investment manager (the Investment Manager); and a memorandum from counsel to the Independent Directors outlining the legal duties of the Board of Trustees. The Board of Trustees also considered a supplemental
peer group compiled by the Investment Manager when evaluating the Funds performance and fees and expenses. The Board took into account that the Investment Manager believes the supplemental peer group, which consists of a mix of recently
launched fixed-income closed-end funds, is more representative of the Funds expense structure. The Board of Trustees also spoke directly with representatives of the independent data provider and met with
investment management personnel. In addition, the Board of Trustees considered information provided from time to time by the Investment Manager throughout the year at meetings of the Board of Trustees, including presentations by portfolio managers
relating to the investment performance of the Fund and the investment strategies used in pursuing the Funds objective. The Board of Trustees also
68
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
considered information provided in response to a request for information submitted by counsel to the Independent Trustees, as well as information
provided in response to a supplemental request. Additionally, the Independent Trustees noted that in connection with their considerations, that they had received information from the Investment Manager about, and discussed with the Investment
Manager, the operations of its business continuity plan and related matters and the operations of third party service providers during the COVID-19 pandemic. In particular, the Board of Trustees considered the
following:
(i) The nature, extent and quality of services to be provided by the Investment Manager: The Board of
Trustees reviewed the services that the Investment Manager provides to the Fund, including, but not limited to, making the day-to-day investment decisions for the Fund,
placing orders for the investment and reinvestment of the Funds assets, furnishing information to the Board of Trustees of the Fund regarding the Funds portfolio, providing individuals to serve as Fund officers, managing the Funds
debt leverage level, and generally managing the Funds investments in accordance with the stated policies of the Fund. The Board of Trustees also discussed with officers and portfolio managers of the Fund the types of transactions conducted on
behalf of the Fund. Additionally, the Board of Trustees took into account the services provided by the Investment Manager to its other funds and accounts, including those that have investment objectives and strategies similar to those of the Fund.
The Board of Trustees also considered the education, background and experience of the Investment Managers personnel, particularly noting the potential benefit that the portfolio managers work experience and favorable reputation can have
on the Fund. The Board of Trustees further noted the Investment Managers ability to attract qualified and experienced personnel. The Board of Trustees also considered the administrative services provided by the Investment Manager, including
compliance and accounting services. After consideration of the above factors, among others, the Board of Trustees concluded that the nature, extent and quality of services provided by the Investment Manager are satisfactory and appropriate.
(ii) Investment performance of the Fund and the Investment Manager: The Board of Trustees noted that the Fund
has been in existence since October 28, 2020 and does not yet have one year of performance. The Board of Trustees considered the investment performance of the Fund compared to Peer Funds and compared to a relevant benchmark and a relevant
blended benchmark. The Board of Trustees also considered the Funds performance as compared to a supplemental peer group compiled by the Investment Advisor. The Board of Trustees noted that since inception and through March 31, 2021, the
Fund outperformed its relevant benchmark and relevant blended benchmark. The Board of Trustees also considered supplemental information provided by the Investment Manager, including a narrative summary of various factors affecting performance and
the Investment Managers performance in managing similarly managed funds and accounts. The Board of Trustees determined that Fund performance, in light of all the considerations noted above, supported the continuation of the Management
Agreement.
(iii) Cost of the services to be provided and profits to be realized by the Investment Manager from the
relationship with the Fund: The Board of Trustees considered the contractual and actual management fees paid by the Fund as well as the Funds total expense ratios. As part of its analysis, the Board of Trustees gave consideration to the
fee and expense analyses provided by the independent data provider. The Board of Trustees considered that the Funds contractual management fee and actual management fee at managed and common asset levels were higher than the Peer Group
69
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
medians, ranking the Fund in the fifth quintile for each. The Board of Trustees considered the Funds fees and expenses versus the
supplemental peer group compiled by the Investment Manager, and noted that the Funds contractual management fee and actual management fee at both managed and common asset levels are lower than the supplemental peer group medians, ranking two
out of seven peers, two out of seven peers and three out of seven peers, respectively. The Board of Trustees noted that the Funds total expense ratio including investment-related expenses at common asset levels are lower than the Peer Group
median, and the Funds total expense ratio including investment-related expenses at managed asset levels represented the Peer Group median, ranking the Fund in the second and third quintiles, respectively. The Board of Trustees also noted that
the Funds total expense ratios excluding investment-related expenses at both managed and common asset levels were higher than the Peer Group medians, ranking in the fifth quintile for each. The Funds total expense ratio including and
excluding investment-related expenses at both managed and common asset levels versus the supplemental peer group compiled by the Investment Manager are lower than the supplemental peer group medians, ranking two out of seven peers for each. The
Board of Trustees considered the impact of leverage levels on the Funds fees and expenses at managed and common asset levels. In light of the considerations above, the Board of Trustees concluded that the Funds current expense structure
was satisfactory.
The Board of Trustees also reviewed information regarding the profitability to the Investment Manager
of its relationship with the Fund. The Board of Trustees considered the level of the Investment Managers profits and whether the profits were reasonable for the Investment Manager. The Board of Trustees took into consideration other benefits
to be derived by the Investment Manager in connection with the Management Agreement, noting particularly the research and related services, within the meaning of Section 28(e) of the Securities Exchange Act of 1934, that the Investment Manager
receives by allocating the Funds brokerage transactions. The Board of Trustees further considered that the Investment Manager continues to reinvest profits back in the business, including upgrading and/or implementing new trading, compliance
and accounting systems, and by adding investment personnel to the portfolio management teams. The Board of Trustees also considered the administrative services provided by the Investment Manager and the associated administration fee paid to the
Investment Manager for such services under the Administration Agreement. The Board of Trustees determined that the services received under the Administration Agreement are beneficial to the Fund. The Board of Trustees concluded that the profits
realized by the Investment Manager from its relationship with the Fund were reasonable and consistent with the Investment Managers fiduciary duties.
(iv) The extent to which economies of scale would be realized as the Fund grows and whether fee levels would reflect such
economies of scale: The Board of Trustees noted that, as a closed-end fund, the Fund would not be expected to have inflows of capital that might produce increasing economies of scale. The Board of Trustees
determined that, given the Funds closed-end structure, there were no significant economies of scale that were not already being shared with shareholders. In considering economies of scale, the Board of
Trustees also noted, as discussed above in (iii), that the Investment Manager continues to reinvest profits back in the business.
(v) Comparison of services to be rendered and fees to be paid to those under other investment management contracts, such as contracts of the same and other investment advisors or other clients: As discussed above in (iii),
the Board of Trustees compared the fees paid under the Management Agreement to those under other investment management contracts of other investment advisors
70
COHEN
& STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
managing Peer Funds. The Board of Trustees also compared the services rendered and fees paid under the Management Agreement to fees paid, including
the ranges of such fees, under the Investment Managers other fund management agreements and advisory contracts with institutional and other clients with similar investment mandates, noting that the Investment Manager provides more services to
the Fund than it does for institutional or subadvised accounts. The Board of Trustees also considered the entrepreneurial risk and financial exposure assumed by the Investment Manager in developing and managing the Fund that the Investment Manager
does not have with institutional and other clients and other differences in the management of registered investment companies and institutional accounts. The Board of Trustees determined that on a comparative basis the fees under the Management
Agreement were reasonable in relation to the services provided.
No single factor was cited as determinative to the
decision of the Board of Trustees, and each Trustee may have assigned different weights to the various factors. Rather, after weighing all of the considerations and conclusions discussed above, the Board of Trustees, including the Independent
Trustees, unanimously approved the continuation of the Management Agreement.
71
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction of the Board of Trustees. The Board of Trustees approves all significant agreements between the Fund and persons or companies furnishing services to it, including
the Funds agreements with its investment manager, administrator, co-administrator, custodian and transfer agent. The management of the Funds day-to day operations is delegated to its officers, the investment advisor, administrator and
co-administrator, subject always to the investment objective and policies of the Fund and to the general supervision of the Board of Trustees.
The Board of Trustees and officers of the Fund and their principal occupations during at least the past five years are set forth
below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Term of
Office2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Trustee
(Including
the Fund)
|
|
|
Length
of Time
Served3
|
|
|
|
|
|
|
Interested Trustees4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph M. Harvey5
1963
|
|
Trustee, Chairman
|
|
Until Next Election of Trustees
|
|
President of the Cohen & Steers Capital Management, Inc. (CSCM or the Advisor) (since 2003) and President of Cohen & Steers, Inc. (CNS) (since 2004). Chief Investment Officer of CSCM from 2003 to 2019.
Prior to that, Senior Vice President and Director of Investment Research of CSCM.
|
|
|
20
|
|
|
Since 2014
|
|
|
|
|
|
|
Adam M. Derechin6
1964
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Chief Operating Officer of CSCM since 2003 and CNS since 2004.
|
|
|
20
|
|
|
Since 2021
|
(table continued on next page)
72
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
(table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Term of
Office2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Trustee
(Including
the Fund)
|
|
|
Length
of Time
Served3
|
|
|
|
|
|
Independent Trustees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael G. Clark
1965
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
From 2006 to 2011, President and Chief Executive Officer of DWS Funds and Managing Director of Deutsche Asset Management.
|
|
|
20
|
|
|
Since 2011
|
|
|
|
|
|
|
George Grossman
1953
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Attorney-at-law.
|
|
|
20
|
|
|
Since 1993
|
|
|
|
|
|
|
Dean A. Junkans
1959
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
CFA; Advisor to SigFig (a registered investment advisor) since July, 2018; Adjunct Professor and ExecutiveInResidence, Bethel University since 2015; Chief Investment Officer at Wells Fargo Private
Bank from 2004 to 2014 and Chief Investment Officer of the Wealth, Brokerage and Retirement group at Wells Fargo & Company from 2011 to 2014; former Member and Chair, Claritas Advisory Committee at the CFA Institute from 2013 to 2015; Board
Member and Investment Committee member, Bethel University Foundation since 2010; formerly Corporate Executive Board Member of the National Chief Investment Officers Circle, 2010 to 2015; formerly, Member of the Board of Governors of the University
of Wisconsin Foundation, River Falls, 1996 to 2004; U.S. Army Veteran, Gulf War.
|
|
|
20
|
|
|
Since 2015
|
(table continued on next page)
73
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
(table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Term of
Office2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Trustee
(Including
the Fund)
|
|
Length
of Time
Served3
|
|
|
|
|
|
|
Gerald J. Maginnis
1955
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Philadelphia Office Managing Partner, KPMG LLP from 2006 to 2015; Partner in Charge, KPMG Pennsylvania Audit Practice from 2002 to 2008; President, Pennsylvania Institute of Certified Public Accountants (PICPA)
from 2014 to 2015; Member, PICPA Board of Directors from 2012 to 2016; Member, Council of the American Institute of Certified Public Accountants (AICPA) from 2013 to 2017; Member, Board of Trustees of AICPA Foundation from 2015 to 2020; Board member
and Audit Committee Chairman of inTEST Corporation since 2020.
|
|
20
|
|
Since 2015
|
|
|
|
|
|
|
Jane F. Magpiong
1960
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
President, Untap Potential since 2013; Board Member, Crespi High School from 2014 to 2017; Senior Managing Director, TIAA-CREF, from 2011 to 2013; National Head of Wealth Management, TIAA- CREF, from 2008 to
2011; and prior to that, President, Bank of America Private Bank from 2005 to 2008.
|
|
20
|
|
Since 2015
|
(table continued on next page)
74
COHEN &
STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
(table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Term of
Office2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Trustee
(Including
the Fund)
|
|
Length
of Time
Served3
|
|
|
|
|
|
|
Daphne L. Richards
1966
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Independent Director of Cartica Management, LLC since 2015; Investment Committee Member of the Berkshire Taconic Community Foundation since 2015 and Member of the Advisory Board of Northeast Dutchess Fund since
2016; President and CIO of Ledge Harbor Management since 2016; formerly, worked at Bessemer Trust Company from 1999 to 2014; prior thereto, held investment positions at Frank Russell Company from 1996 to 1999. Union Bank of Switzerland from 1993 to
1996; Credit Suisse from 1990 to 1993; and Hambros International Venture Capital Fund from 1988 to 1989.
|
|
20
|
|
Since 2017
|
|
|
|
|
|
|
Ramona Rogers-Windsor7
1960
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Member, Capital Southwest Board of Directors since March 2021; member, Thomas Jefferson University Board of Trustees since 2020; Managing Director, Public Investments Department, Northwestern Mutual Investment
Management Company, LLC from 2012 to 2019; member, Milwaukee Film, LLC Board of Directors from 2016 to 2019.
|
|
20
|
|
Since 2021
|
(table continued on next page)
75
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
(table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Term of
Office2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Trustee
(Including
the Fund)
|
|
Length
of Time
Served3
|
|
|
|
|
|
|
C. Edward Ward, Jr.8
1946
|
|
Trustee
|
|
Until Next Election of Trustees
|
|
Member of The Board of Trustees of Manhattan College, Riverdale, New York from 2004 to 2014. Formerly, Director of closed-end fund management for the NYSE where he worked
from 1979 to 2004.
|
|
20
|
|
Since 2004
|
1
|
The address for each trustee is 280 Park Avenue, New York, NY 10017.
|
2
|
The Board of Trustees has a mandatory retirement policy stating a Trustee must retire from the
Board on December 31st of the year in which he or she turns 75 years of age.
|
3
|
The length of time served represents the year in which the Trustee was first elected or appointed
to any fund in the Cohen & Steers fund complex.
|
4
|
Interested person as defined in the 1940 Act, of the Fund because of affiliation with
CSCM (Interested Trustees).
|
5
|
Robert H. Steers resigned from the Funds Board of Trustees and role as Chairman, effective
December 7, 2021. The Board of Trustees has appointed Joseph M. Harvey to succeed Mr. Steers as Chairman, effective December 7, 2021.
|
6
|
Mr. Derechin was elected to the Funds Board of Trustees effective December 7, 2021.
|
7
|
Ms. Rogers-Windsor was elected as a Trustee of each of the Funds in the Cohen & Steers Fund
Complex by the Board of Trustees on March 8, 2021.
|
8
|
C. Edward Ward, Jr. will retire from the Board of Trustees on December 31, 2021 pursuant to the
Funds mandatory retirement policy.
|
76
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
The officers of the Fund (other than Mr. Harvey, whose biography is provided above), their address, their year of birth and their
principal occupations for at least the past five years are set forth below.
|
|
|
|
|
|
|
Name, Address and
Year of Birth1
|
|
Position(s) Held
With Fund
|
|
Principal Occupation During At Least
the Past 5 Years
|
|
Length
of Time
Served2
|
|
|
|
|
James Giallanza
1966
|
|
President and Chief Executive Officer
|
|
Executive Vice President of CSCM since 2014. Prior to that, Senior Vice President of CSCM since 2006.
|
|
Since 2006
|
|
|
|
|
Albert Laskaj
1977
|
|
Treasurer and Chief Financial Officer
|
|
Senior Vice President of CSCM since 2019. Prior to that, Vice President of CSCM since 2015.
|
|
Since 2015
|
|
|
|
|
Dana A. DeVivo
1981
|
|
Secretary and Chief Legal Officer
|
|
Senior Vice President of CSCM since 2019. Prior to that, Vice President of CSCM since 2013.
|
|
Since 2015
|
|
|
|
|
Stephen Murphy
1966
|
|
Chief Compliance Officer and Vice President
|
|
Senior Vice President of CSCM since 2019. Prior to that, Managing Director at Mirae Asset Securities (USA) Inc. since 2017. Prior to that, Vice President & Chief Compliance Officer of Weiss Multi-Strategy
Adviser LLC since 2011.
|
|
Since 2019
|
|
|
|
|
William F. Scapell
1968
|
|
Vice President
|
|
Executive Vice President of CSCM since 2014. Prior to that, Senior Vice President of CSCM since 2003.
|
|
Since 2003
|
|
|
|
|
Elaine Zaharis-Nikas
1973
|
|
Vice President
|
|
Senior Vice President of CSCM since 2014. Prior to that, Vice President of CSCM since 2003.
|
|
Since 2015
|
1
|
The address of each officer is 280 Park Avenue, New York, NY 10017.
|
2
|
Officers serve one-year terms. The length of time served
represents the year in which the officer was first elected as an officer of any fund in the Cohen & Steers fund complex. All of the officers listed above are officers of one or more of the other funds in the complex.
|
77
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Cohen & Steers Privacy Policy
|
|
|
|
|
Facts
|
|
What Does Cohen & Steers Do With Your Personal Information?
|
|
|
Why?
|
|
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires
us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
|
|
|
What?
|
|
The types of personal information we collect and share depend on the product or service
you have with us. This information can include:
Social Security number and account balances
Transaction history and account transactions
Purchase history and wire
transfer instructions
|
|
|
How?
|
|
All financial companies need to share customers personal information to run their everyday business. In the section below, we list the reasons financial
companies can share their customers personal information; the reasons Cohen & Steers chooses to share; and whether you can limit this sharing.
|
|
|
|
|
|
Reasons we can share your personal information
|
|
Does Cohen & Steers
share?
|
|
Can you limit this
sharing?
|
|
|
|
For our everyday business purposes
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or reports to
credit bureaus
|
|
Yes
|
|
No
|
|
|
|
For our marketing purposes
to offer our products and services to you
|
|
Yes
|
|
No
|
|
|
|
For joint marketing with other financial companies
|
|
No
|
|
We dont share
|
|
|
|
For our affiliates everyday business purposes
information about your transactions and experiences
|
|
No
|
|
We dont share
|
|
|
|
For our affiliates everyday business purposes
information about your creditworthiness
|
|
No
|
|
We dont share
|
|
|
|
For our affiliates to market to you
|
|
No
|
|
We dont share
|
|
|
|
For non-affiliates to market to you
|
|
No
|
|
We dont share
|
|
|
|
Questions? Call 800.330.7348
|
|
|
|
|
78
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Cohen & Steers Privacy Policy(Continued)
|
|
|
|
|
Who we are
|
|
|
|
|
Who is providing this notice?
|
|
Cohen & Steers Capital Management, Inc., Cohen & Steers Asia Limited, Cohen & Steers Japan Limited, Cohen & Steers UK Limited,
Cohen & Steers Ireland Limited, Cohen & Steers Securities, LLC, Cohen & Steers Private Funds and Cohen & Steers Open and Closed-End Funds (collectively, Cohen & Steers).
|
|
|
What we do
|
|
|
|
|
How does Cohen & Steers protect my personal information?
|
|
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer
safeguards and secured files and buildings. We restrict access to your information to those employees who need it to perform their jobs, and also require companies that provide services on our behalf to protect your information.
|
|
|
How does Cohen & Steers collect my personal information?
|
|
We collect your personal information, for example, when you:
Open an account or buy
securities from us
Provide account information or give us your contact information
Make deposits or
withdrawals from your account
We also collect your personal
information from other companies.
|
|
|
Why cant I limit all sharing?
|
|
Federal law gives you the right to limit only:
sharing for
affiliates everyday business purposesinformation about your creditworthiness
affiliates from using your information to market to you
sharing for
non-affiliates to market to you
State law and individual companies
may give you additional rights to limit sharing.
|
|
|
Definitions
|
|
|
|
|
Affiliates
|
|
Companies related by common ownership or control. They can be financial and
nonfinancial companies.
Cohen & Steers does not share with affiliates.
|
|
|
Non-affiliates
|
|
Companies not related by common ownership or control. They can be financial and
nonfinancial companies.
Cohen & Steers does not share with non-affiliates.
|
|
|
Joint marketing
|
|
A formal agreement between non-affiliated financial companies that together market
financial products or services to you.
Cohen & Steers does not jointly market.
|
79
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND
Cohen & Steers Open-End Mutual Funds
COHEN & STEERS REALTY SHARES
|
|
Designed for investors seeking total return, investing primarily in U.S. real estate securities
|
|
|
Symbols: CSJAX, CSJCX, CSJIX, CSRSX, CSJRX, CSJZX
|
COHEN & STEERS REAL ESTATE SECURITIES FUND
|
|
Designed for investors seeking total return, investing primarily in U.S. real estate securities
|
|
|
Symbols: CSEIX, CSCIX, CREFX, CSDIX, CIRRX, CSZIX
|
COHEN & STEERS INSTITUTIONAL REALTY SHARES
|
|
Designed for institutional investors seeking total return, investing primarily in U.S. real estate securities
|
COHEN & STEERS
GLOBAL REALTY SHARES
|
|
Designed for investors seeking total return, investing primarily in global real estate equity securities
|
|
|
Symbols: CSFAX, CSFCX, CSSPX, GRSRX, CSFZX
|
COHEN & STEERS INTERNATIONAL REALTY FUND
|
|
Designed for investors seeking total return, investing primarily in international (non-U.S.) real estate securities
|
|
|
Symbols: IRFAX, IRFCX, IRFIX, IRFRX, IRFZX
|
COHEN & STEERS REAL ASSETS FUND
|
|
Designed for investors seeking total return and the maximization of real returns during inflationary environments by investing primarily in real assets
|
|
|
Symbols: RAPAX, RAPCX, RAPIX, RAPRX, RAPZX
|
COHEN & STEERS PREFERRED
SECURITIES
AND INCOME FUND
|
|
Designed for investors seeking total return (high current income and capital appreciation), investing primarily in preferred and debt securities issued by U.S. and
non-U.S. companies
|
|
|
Symbols: CPXAX, CPXCX, CPXFX, CPXIX, CPRRX, CPXZX
|
COHEN & STEERS LOW DURATION PREFERRED
AND INCOME FUND
|
|
Designed for investors seeking high current income and capital preservation by investing in low-duration preferred and other income securities issued by U.S.
and non-U.S. companies
|
|
|
Symbols: LPXAX, LPXCX, LPXFX, LPXIX, LPXRX, LPXZX
|
COHEN & STEERS MLP & ENERGY OPPORTUNITY FUND
|
|
Designed for investors seeking total return, investing primarily in midstream energy master limited partnership (MLP) units and related stocks
|
|
|
Symbols: MLOAX, MLOCX, MLOIX, MLORX, MLOZX
|
COHEN & STEERS GLOBAL INFRASTRUCTURE FUND
|
|
Designed for investors seeking total return, investing primarily in global infrastructure securities
|
|
|
Symbols: CSUAX, CSUCX, CSUIX, CSURX, CSUZX
|
COHEN & STEERS ALTERNATIVE INCOME FUND
|
|
Designed for investors seeking high current income and capital appreciation, investing in equity, preferred and debt securities, focused on real assets and alternative income strategies
|
|
|
Symbols: DVFAX, DVFCX, DVFIX, DVFRX, DVFZX
|
Distributed by Cohen & Steers Securities, LLC.
Please consider the investment objectives, risks, charges and expenses of any
Cohen & Steers U.S. registered open-end fund carefully before investing. A summary prospectus and prospectus containing this and other information can be obtained by calling 800-330-7348 or by visiting cohenandsteers.com. Please read the summary prospectus and prospectus carefully before investing.
80
COHEN & STEERS TAX-ADVANTAGED PREFERRED SECURITIES AND INCOME FUND