SEE MORE: Preferred Stock ETFs for a Low-Yield Environment

However, about two-thirds of preferred securities are made up of traditional financial companies, including banks, which have largely unperformed this year.

PFXF, though, specifically excludes financial sector exposure. The preferred securities ex-financial ETF, though, does include a hefty 30.6% tilt toward real estate investment trusts, along with 22.6% electric companies, 16.2% telecom, 4.9% agriculture, 4.2% insurance, 4.1% manufacturing,  3.6% pipelines, 3.3% oil & gas, 2.0% food and 1.9% healthcare.

Potential investors should also be aware of the risks in a rising rate environment. Looking ahead, while preferred stocks provide investors with an attractive source of yields, the assets are vulnerable in a rising interest rate environment. If rates rise, the holdings will likely decline in price to elevate their yield to attractive levels.

Financial advisors who are interested in learning more about preferred securities can register for the Thursday, October 6 webcast here.