From time to time we have covered the Preferred Stock ETF category, as it has always displayed an impressive ability to “hold” assets in terms of the listed ETFs in the space are concerned.
The biggest product in terms of assets under management, PFF (iShares S&P U.S. Preferred Stock, Expense Ratio 0.48%) has actually received a good amount of coverage lately in the television and print media, and has
actually pulled in new assets as well on the heels of this, adding at least $100 million lately.
The fund has an extremely impressive $9.9 billion in net assets under management, making it the largest fund in the space by a wide margin above PGX (PowerShares Preferred Portfolio, Expense Ratio 0.50%) and PGF (PowerShares Financial Preferred Portfolio, Expense Ratio 0.60%) which have $2.1 billion and $1.4 billion in assets under management respectively, which are certainly not numbers to sneeze at.
PFF tends to be the “benchmark” name in the space however, in terms of trading volume as well, with an impressive 1.4 million shares traded daily. PGX and PGF trade about 765,000 shares and 229,000 shares per day respectively.
The theme that we have noticed in this space, is that the early launches to the space (the three aforementioned funds all debuted between 2006-2008), have demonstrated a clear “first mover” advantage and have also impressively attracted what looks like “buy and hold” assets, steadily taking in net inflows over time.
As we near the end of May and with Bond prices moving mostly higher but in some cases sideways at this point, both retail and institutional investors are having conversations about “Yields” again as far as their portfolios are concerned and where potential opportunities will be, say outside of U.S. Treasuries. PFF for example has a 6.53% yield while PGX and PGF have yields of 6.19% and 6.14% respectively.
Other products exist in the space, and although newer to the market, have displayed some promise in terms of ability to raise visibility and assets. We see PSK (SPDR Wells Fargo Preferred Stock, Expense Ratio 0.45%) and PFXF (Market Vectors Preferred Securities ex-Financials, Expense Ratio 0.40%) as newer, potential alternatives in the space as well, as these funds have attracted $254 million and $168 million since inception respectively.
Other smaller funds in the space that are worth keeping an eye on include SPFF (Global X SuperIncome Preferred, Expense Ratio 0.58%), FPE (First Trust Preferred Securities and Income, Expense Ratio 0.85%), and IPFF (iShares International Preferred Stock, Expense Ratio 0.55%) to name a few.
iShares U.S. Preferred Stock ETF
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
Street One Financial is an educational/research firm utilizing the Broker Dealer services of Precision Securities, a FINRA registered Broker/Dealer.