“To be sure, preferred stocks are generally more volatile than bonds and this makes sense given their lower place in the capital structure,” Koesterich said.
However, the heavy concentration in financials is also driving price swings because the financial sector is now the most volatile sector in the market.
“As such, preferred funds modeled on the index are essentially acting as proxies for financial stock funds, but with equity-like risk and bond-like returns,” he wrote.
iShares S&P U.S. Preferred Stock ETF
