After getting pummeled in the swift market correction, preferred stock exchange traded funds have staged a comeback as investors seeking attractive yields and low valuations pounce on the ETFs.
On Monday, bank preferred stocks experienced their worst single-day sell-off since 2009, with big losers like Bank of America (NYSE: BAC) seeing common shares down 20% during trading, reports Andrew Bary for Barron’s.
However, while there is lingering concern over the banking system, the bank-preferred market is beginning to show some lucrative yields, again.
The largest ETFs in the category include PowerShares Financial Preferred (NYSEArca: PGF), PowerShares Preferred (NYSEArca: PGX), SPDR Wells Fargo Preferred Stock (NYSEArca: PSK) and iShares S&P U.S. Preferred Stock (NYSEArca: PFF).
The iShares ETF had a 12-month yield of 7.3% as of July 29, according to manager BlackRock. [Preferred Stock ETF Primer]