Pareto upgrades boost portfolio yield from 8.53% to 11.33% by swapping to better securities within the same issuer.

Pareto upgrades involve swapping investments for strictly superior securities within the same issuer, improving yield without added risk. By repeatedly applying this strategy, yield on invested capital rose from 8.53% to 11.33% in under two years, demonstrating strong compounding effects. Current opportunities include upgrading from ABR-E to ABR-D preferred shares, which offer an 18 basis point higher yield with similar risk and upside. This technique exploits market inefficiencies often overlooked by investors, enabling steady, low-risk yield improvements over time.