ETF spotlight on the SPDR Wells Fargo Preferred Stock ETF (NYSEArca: PSK), part of an ongoing series.

Assets: $274.3 million

Objective: The SPDR Wells Fargo Preferred Stock ETF tries to reflect the performance of the Wells Fargo Hybrid and Preferred Securities Aggregate Index, which is a modified market-cap weighted index of non-convertible preferred stock and securities like depositary preferred securities and perpetual subordinated debt.

Holdings: Top holdings include: Wells Fargo & Co New 2.7%, Barclays Bank Plc 2.4%, HSBC Hldgs Plc 2.3%, PNC Financial Services Group Inc. 2.3% and Credit Suisse Guernsey Brh 2.2%.

What You Should Know:

  • State Street Global Advisors sponsors the fund.
  • PSK has an expense ratio of 0.45%.
  • The fund has 134 holdings and the top 10 make up 21.0% of the overall portfolio.
  • Sector allocations include: financials 81.0%, utilities 6.3%, telecom services 2.8%, industrials 2.5% and consumer discretionary 0.9%.
  • The PSK has a dividend yield of 6.63%.
  • The fund is up 1.9% over the past month, up 3.9% over the last three months and up 11.5% year-to-date.
  • The ETF is 2.1% above its 200-day exponential moving average.
  • “Preferreds are hybrid securities that have characteristics of both stocks and bonds, and are typically issued by financial institutions, utilities, and telecom firms,” according to Morningstar analyst Timothy Strauts. “It makes regular income payments and is rated by the major credit-rating agencies. Preferreds have no voting rights, are senior in the capital structure to common stock, and have priority over common stock in the payment of dividends.”
  • “It is priced similarly to long-term corporate bonds with a little higher credit risk,” strauts added.

The Latest News:

  • Global X recently launched the Global X SuperIncome Preferred ETF (NYSEArca: SPFF), follows some of the highest yielding preferred stocks from both the U.S. and Canada. [Why Preferred Stock ETFs are Hot]
  • Van Eck also recently added the Market Vectors Preferred Securities ex-Financials ETF (NYSEArca: PFXF), which excludes financials sector preferred stocks.

SPDR Wells Fargo Preferred Stock ETF

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.