Fabian points to the relatively steady rise in the iShares S&P U.S. Preferred Stock Index Fund (NYSEArca: PFF), which has gained 13.2% over the past year. PFF has a 5.73% 12-month yield. [Are 6% Yields in Preferred Stock ETFs Worth the Risks?]
However, Fabian cautions that while the preferred ETF’s past year performance may look more like a diversified bond fund, there are bouts of extreme volatility. For instance, in July 2011, PFF plunged 10% in a short period.
First Trust Preferred Securities and Income ETF
For more information on preferred stock ETFs, visit our preferred stock category.
Max Chen contributed to this article.