One exchange traded fund (ETF) that hasn’t received much attention lately is Barclays’ iShares S&P U.S. Preferred Stock Index Fund (PFF). One of the reasons for its lack of coverage could be that it’s down 2.0% for the last three months, having launched in March. However, when we look at the larger picture, we see that it’s been rebounding since the market low on Aug. 15.

In fact, as Gary Gordon for ETF Expert notes, PFF fell 10% in the summer housing and credit crunch. One of the reasons PFF suffered such a far fall was because it has 75% invested in financials. Its drop was as bad as broader U.S. indexes such as the S&P 500 and almost as bad as the nasty plunge for the Financial Select Sector SPDR (XLF). This summer was a rough time for PFF. But what about now?

Financials are on their way back up, and some experts have said there might be bargains in that sector. PFF and XLF have recovered to the position they occupied on July 20, which is the day the global credit crisis hit. However, there could be a twist: Although financials account for 75% of PFF, its top holding is Ford at 9.5%, followed by Freeport at 8.6%. Financials don’t show up until the third-largest holding, which is Citigroup at 4.7%.

Tags: Financial, Sector ETFs, UNG