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Money Buzz 02/05

Hybrid securities, female purchasing power and more

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This story appears in the February 2005 issue of Entrepreneur. Subscribe »

Con Fusion

Mention hybrids today, and most people think cars, not securities. But the newest breed of products bearing the designation fuses elements of stocks and bonds rather than electricity and fuel.

Also known as income depositary securities (IDSs), hybrid securities offer investors the regular payment of a dividend-paying stock and some growth opportunity, as well as the interest payment of a fixed-income security. The investment structure is best suited to IPOs in certain sectors-such as the food and telecom industries-which have the steady cash flows to provide investors with regular payments, but not necessarily the high-growth prospects that a typical IPO offers.

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