The iShares S&P U.S. Preferred Stock Index Fund (NYSEArca PFF) is the largest preferred stock ETF available, with 245 component holdings and a 0.48% expense ratio. Two sub-sectors make up the majority of the fund’s allocations, including diversified financials at 46.6% and banks at 25.4%. PFF has a 12-month yield of 6.99%.
The Powershares Financial Preferred Portfolio Fund (NYSEArca: PGF) tries to reflect the performance of the Wells Fargo Hybrid and Preferred Securities Financial Index, which follows holds U.S.-listed preferred securities issued by financial institutions. The fund has 45 holdings and a 0.66% expense ratio. PGF has a distribution yield of 6.91%.
PowerShares Preferred Portfolio Fund (NYSEArca: PGX) tries to reflect the performance of the BofA Merrill Lynch Core Fixed Rate Preferred Securities Index, which tracks a diversified group of investment-grade preferred securities. The fund has 92 holdings and an expense ratio of 0.50%. While the financials sector makes up a majority of the fund’s weighting, PGX also holds minor allocations toward utilities, telecom services, consumer discretionary and materials sectors. PGX has a distribution yield of 6.77%.
SPDR Wells Fargo Preferred Stock ETF (NYSEArca: PSK) tries to reflect the performance of the Wells Fargo Hybrid and Preferred Securities Aggregate Index, which is a market-cap weighted index comprised of non-convertible preferred stocks and securities, including depositary preferred securities, perpetual subordinated debt and other securities issued by banks or other financial institutes. The fund has 155 holdings and an expense ratio of 0.45%. Top sub-sectors include commercial banks, insurance, diversified financial services and real estate investment trusts. PSK has a 30-day SEC yield of 6.58%.
The iShares S&P Intl Preferred Stock Index ETF (NYSEArca: IPFF) tries to reflect the performance of the S&P International Preferred Stock Index, which tracks preferred stocks from non-U.S. developed market issuers. The fund has 66 holdings and an expense ratio of 0.55%. The financials sector is weighted at 78.5% of the ETF and energy is weighted at 11.8%. Country allocations include Canada 78.1%, U.K. 12.0%, Sweden 4.9%, Guernsey 1.7%, Singapore 1.6% and the U.S. 1.1%. IPFF has a 30-day SEC yield of 2.04%.
While exposure to foreign investments comes with greater potential risk and volatility, preferred shares issued by Canadian banks have been doing better than the U.S – IPFF has a large weighting in Canadian securities. Additionally, investors may take a more focused exposure to Canada’s preferred shares through the Global X ETF.
The Global X Canada Preferred ETF (NYSEArca: CNPF) tries to reflect the performance of the Solactive Canada Preferred Stock Index, which is based on a select group of preferred stocks from Canadian issues that trade on the Toronto Stock Exchange. The fund has 48 holdings and an expense ratio of 0.48%. The ETF is largely comprised of financial sector assets but also includes smaller allocations toward energy, telecommunications, utilities, consumer staples and consumer discretionary securities. CNPF has a distribution yield of 5.57%.