“We are excited to launch PFFD, offering investors a low cost option for accessing the preferred market. The asset class’s attractive yield potential, coupled with potential tax benefits make preferreds an important consideration for an income-oriented portfolio,” Jon Maier, chief investment officer at Global X, said in a note.
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The U.S. Preferred ETF tries to reflect the performance of the BofA Merrill Lynch Diversified Core U.S. Preferred Securities Index, which is comprised of preferred securities from the U.S., which includes different categories of preferred stock, such as floating, variable and fixed-rate preferreds, cumulative and non-cumulative preferreds, and trust preferreds. Components of the Underlying Index primarily include financials, real estate, telecommunications and utilities companies.
Sector weights include financials 73.9%, industrials 16.2%, utilities 9.7% and quasi government 0.2%. Credit quality breakdown includes AAA 0.2%, AA 1.4%, A 1.0%, BBB 56.5%, BB 37.0%, B 0.9%, CCC 0.2% and not rated 2.8%.
For more information on new fund products, visit our new ETFs category.