We have noted heightened activity in “Low Volatility” products recently such as USMV and SPLV, and it is apparent that institutional investors and advisors still have an appetite for equities, but they would settle for less upside and less downside in embracing “lower beta” names that likely deliver reasonably appealing yields as well.
This brings us today to visit the segment of “Preferred Stocks,” which generally fit the bill in both “lower vol” and delivering appealing yields.
Currently, 6 ETF products fall within this realm, with PFF being by far the largest, and holding nearly $9 billion in assets currently. [Preferred Stock ETFs Yielding Over 6%]
Other funds in the category include PGX, PGF, PSK, IPFF, and CNPF.
PFF, PGX, and PSK are generally compared together as peers, as they both are tilted towards U.S. Domestic preferred names.
Year to date, PFF has risen 8.37% versus PSK up 6.40%, and PGX increasing 4.97%. 30-Day SEC Yields of these funds are the following (PFF, 6.23%, PSK, 6.00%, and PGX, 6.81%. PGF may be intriguing for those whom are looking for preferred stock exposure but currently like the valuations of the Financials sector, as the fund tracks an index of 30 equities in the financial industry.
For those looking for international preferred exposure, CNPF concentrates among Canadian listed preferred names, and IPFF tracks the S&P International Preferred Stock Index, and has its heaviest weightings in Developed countries outside of the U.S., including Great Britain, Canada, and Sweden for example.
iShares S&P US Preferred Stock Fund (NYSEArca: PFF)