Rising rates have also thwarted new and unique approaches to preferred ETFs. The Market Vectors Preferred Securities ex Financials ETF (NYSEArca: PFXF) is off more than 8% this year, though it should be noted that fund has brought in $37.4 million in fresh capital. PFXF, unlike rival funds, is not heavily allocated to the financial services sector.
The actively managed First Trust Preferred Securities and Income ETF (NYSEArca: FPE) is comprised of preferred and hybrid securities based on relative yield, credit quality, capital structure, credit ratings, credit fundamentals, security characteristics, liquidity, market conditions and interest rate environment. FPE is off to a decent start with almost $54 million in AUM, but has shed 10.5% since its February debut. [An Active ETF for Preferred Shares]
iShares U.S. Preferred Stock ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of PGF.