Preferred stocks are a type of hybrid security that exhibit the characteristics of equity and bond instruments. The shares are issued by financial institutions, utilities and telecom companies. [What is an ETF? — Part 21: Preferred Stocks]
PowerShares Preferred Portfolio (NYSEArca: PGX) is another popular choice for the sector. The ETF has a 30-day SEC yield of 6.6%.
Like post preferred stock funds, PGX is heavily weighted toward the financial sector. The ETF has a 91.8% stake in financials, according to Invesco PowerShares. [ETF Spotlight: SPDR Preferred Stock]
iShares S&P U.S. Preferred Stock Index Fund