Preferred Stock

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ETF investors may want to consider preferred stocks as government yields hover near record lows Low inflation helps bond investors generate a higher real yield, or yield after accounting for the inflation bite International government bond yields have been depressed to near zero levels With government yields hovering near record lows, exchange traded fund investors may […]

The markets are likely in for a volatile year. Nevertheless, exchange traded fund investors have a few options to help diminish portfolio risks and help hedge against the swings. Russ Koesterich, Global Chief Investment Strategist and Head of the Model Portfolio & Solutions Business at BlackRock, attributes the market volatility to a number of factors, […]

As the markets brace for the Federal Reserve to begin hiking interest rates, bond exchange traded fund investors should thinking rate risk and ways to mitigate the negative effects higher rates. On the recent webcast, Fixed Income Strategies Ahead of the Fed, Scott Eldridge, Director of Fixed Income ETF Product Strategy at Invesco PowerShares Capital […]

Investors seeking greater income generation may turn to a number of alternative investments and exchange traded funds that can provide attractive yields. For instance, investors who want to add a little more dividend into their mix can consider master limited partnerships, or MLPs. To qualify as an MLP, the companies pass through at least 90% […]

With the Federal Reserve largely expected to begin hiking interest rates soon, fixed-income assets could weaken, but bond exchange traded fund investors still have some alternative options to help maintain yields and hedge against the rate risks. On the upcoming webcast, Fixed Income Strategies Ahead of the Fed, James Reiger, Global Head of Fixed Income […]

Investors who are focusing on income generation can take a look at preferred stock exchange traded funds to bolster yields. For example, the iShares U.S. Preferred Stock ETF (NYSEArca: PFF) has a 6.05% 12-month yield, PowerShares Preferred Portfolio (NYSEArca: PGX) has a 5.94% 12-month yield, Global X SuperIncome Preferred ETF (NYSEArca: SPFF) has a 6.75% […]

With 10-year Treasury yields up more than 12% over the past month, plenty of income-generating are being pressured. The list includes, but is not limited to, longer-dated bonds and real estate investment trusts. Looking at the lethargic one-month performances Consumer Staples Select Sector SPDR (NYSEArca: XLP), the largest consumer staples ETF, and the Utilities Select […]

As workers hang up their hats and plan for their golden years, retirees are browsing through exchange traded funds to meet their income needs, and there are a lot of yield-producing options to choose from. For instance, there are over 500 ETFs that offer better yields than 10-year U.S. Treasuries, and investors can breakdown the […]

We had a few inquiries earlier this week on why there was so much selling pressure in preferred stocks, tracked by PFF (iShares S&P U.S. Preferred Stock, Expense Ratio 0.47%, Yield 2.66%) as there was very heavy volume the past two sessions after an especially steep Wednesday sell-off. Alas, with the global equity rally we […]

With the economy essentially stalling out over the first quarter, diminishing the likelihood of an interest rate hike any time soon, investors may be tempted to steer toward attractive yield-generating assets, such as preferred stock exchange traded funds. Income investors may like preferred stock ETFs since the asset class offer stable dividends, don’t come with […]

Amid historically low interest rates and no threat that the Federal Reserve would deviate from that course, exchange traded funds holding preferred stocks became favored destinations for yield-hunting income investors. With the interest rate outlook appearing far less sanguine as the Fed readies to boost borrowing costs, perhaps as soon as June, advisors and investors […]

In this prolonged low interest rate environment, the S&P U.S. Preferred Stock Index has performed well, returning 2.92% year-to-date.   Meanwhile, the S&P 500 (TR) is up a modest 0.6% and long term bonds tracked in the S&P/BGCantor 20+ Year U.S. Treasury Bond Index are up 4.53% in total return.  So far, the preferred stock market with characteristics of […]

This article was written by Invesco PowerShares Senior Fixed & Equity Income Product Strategist Josesph Becker. With the Federal Reserve (Fed) ending its third and final round of quantitative easing (QE) in October, investors are trying to assess the impact on income-producing asset classes. While the complete effect of Fed policy normalization remains to be […]

U.S. Preferred securities continue to provide healthy returns for investors.  The S&P U.S. Preferred Stock Index has returned 0.79% for the month and currently returned 13.81% total return year-to-date. The ratings break-out between constituents of the preferred index has the S&P U.S. Investment Grade Preferred Stock Index even with its high yield counterparts at 0.83% […]

Income seekers who are cashing in on the high yields offered by preferred stock exchange traded funds should start to look over their positions as a rising interest rate environment will significantly impact these hybrid assets. So far this year, the preferred stock ETFs have outperformed the broader market. The iShares U.S. Preferred Stock ETF […]

The history of preferred stock exchange traded funds in the U.S. is an interesting one. The iShares U.S. Preferred Stock ETF (NYSEArca: PFF) and the PowerShares Preferred Portfolio (NYSEArca: PGX), by far the two largest preferred ETFs, debuted in early 2007 and 2008, respectively, but what initially looked like dubious timing for any new ETF, […]

From time to time we have covered the Preferred Stock ETF category, as it has always displayed an impressive ability to “hold” assets in terms of the listed ETFs in the space are concerned. The biggest product in terms of assets under management, PFF (iShares S&P U.S. Preferred Stock, Expense Ratio 0.48%) has actually received […]

This year’s toast of the town among bond exchange traded funds has been Treasury ETFs, particularly of the longer-dated variety. As 10-year Treasury yields have plunged 15.6%, investors have raced back to Treasury ETFs, helping the iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) and the iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) rank […]

What are Preferreds? Preferred shares are hybrid equity securities, with characteristics that lie between the traditional fixed income and equity asset classes.  Like common shares, preferred shares represent ownership in a company and are listed as equity on the balance sheet; the ownership isn’t entirely the same though.  Preferreds have preferential rights to dividend payments […]

Exchange traded funds that track preferred stocks provide investors with an attractive source of yields. However, as witnessed last year, preferred shares are vulnerable to rising interest rate environments. As benchmark 10-year Treasury yields stay below 3%, Investors have found preferred stocks as an attractive alternative source of income. For instance the iShares U.S. Preferred […]

The iShares U.S. Preferred Stock ETF (NYSEArca: PFF), PowerShares Preferred Portfolio (NYSEArca: PGX) and other ETFs holding preferred stocks were stung by rising Treasury yields in 2013. While not as bad as long-duration bond funds, PFF and PGX have an average 2013 loss of 1.4%. The PowerShares Financial Preferred Portfolio(NYSEArca: PGF) is off 1.6% for […]

No longer is an investor’s search for yield confined to stocks and U.S. government bonds. The exchange traded products industry has helped drive the changing landscape of income investing by offering a growing number of income-generating instruments, many of which have unique themes and concepts. Income investors can now use ETFs to tap a plethora […]

Preferred indices started the year with some very strong returns. First quarter 2013 saw the S&P U.S. Preferred Stock Index (TR) return 3.13%. By the end of April, the overall index was up 4.40% year-to-date while the floating rate component of the index, as measured by the S&P U.S. Floating Rate Preferred Stock Index (TR), […]

Due to their hybrid nature, the potential risks of preferred securities are related to the interest rate environment, issuer’s credit quality and liquidity. Interest Rate Risk: Due to their bond-like fixed dividend payments, preferreds are vulnerable to changes in interest rates.  There is an inverse relationship between preferred prices and changes in interest rates.  In […]

Companies may issue preferred stocks for a variety of reasons.  The three reasons below are the most common. Preferred stock issuances give companies a relatively cheap way to acquire additional capital.  The preferred market is dominated by banks and related financial institutions, which are required by regulators to have adequate Tier 1 capital to support […]

Retirees who are managing their portfolios should not chase after returns. Instead, most exchange traded fund investors saving for retirement should include strategic allocations and find opportunities in alternative income investments. For instance, Michael Fabian, a managing partner at FMD Capital management, suggests taking a look at preferred stocks and REITs, two themes that have […]

Traders and investors will be closely watching for tapering commentary that emerges from the Federal Reserve meeting later today. Owners of preferred stock ETFs could be hoping the Fed opts to delay tapering and keep its ultra-loose monetary policies in place for as long as possible. Preferred stock ETFs were among the prime beneficiaries of […]

When it comes to dividend exchange traded funds, regular income payouts are an attractive feature, but the investments also provide portfolios with diversified, long-term market exposure. Investors can utilize dividend ETFs to access a diverse range of dividend-paying stocks with one single trade, instead of picking out a couple company stocks that could tank or […]

Finding asset classes and sectors that have been stung by tapering chatter and the subsequent rise in 10-year Treasury yields is not difficult. Unfortunately, some of the asset classes that are most vulnerable to rising rates are also prized by income investors. That list includes utilities stocks, master limited partnerships, real estate investment trusts and […]