Best 13 Preferred Stock ETFs in 2021
Investing in the stock market can be a challenging task for expert, intermediate, and beginner investors. This is because the market has different types of investment options. However, if you prefer to preserve your capital other than the returns you will get, preferred stock ETFs are your best option. Additionally, this type of stock is best for you who wants a diversified portfolio to achieve high income.
Preferred stock ETFs are characterized as having low market risk and high dividend value. Apart from increased income, when you invest in preferred stocks, you are assured of stable income.
Therefore, if you want to invest in preferred stock, we have a detailed guide that will help you learn more.
What is the Preferred Stock Fund? Why Do I Need It?
If it’s your first time hearing about the term ‘preferred stock’ or heard about it, but you don’t have any clue, I will inform you more about it today.
The preferred stock fund is neither stock nor bond. This is because it has features from the two. According to financial experts’, they also term it as hybrid due to its features.
We say that it is similar to stock because it has equity securities and has income qualities comparable to a bond. Furthermore, they are the same as bonds because they are allocated a par value, and you will pay a specified interest rate.
When you receive your dividends, it will not be taxed as income but as a long-term capital gain.
Another thing that makes preferred stock similar to bonds is that its value depends on the increase and decrease of its interest rate.
Therefore, when you decide to invest in this type of ETF, you should be ready for its merits and demerits. This type of stock has high dividends; it is given priority during bankruptcy, and it has less risk.
On the other hand, the price of a preferred stock depends on the rate of interest. This means you cannot estimate its value. You will not have the right to vote as an investor in a company. Moreover, it has negligible growth and has liquidation risks, such as common stocks.
The reason you should choose preferred stock over bonds and common bonds is that it offers constant returns. However, this is not assured in case a company has financial problems. Another thing that should make you buy a preferred stock is to receive your dividends before other ordinary investors.
These three features are what define preferred stock.
· Adequate liquidity
· High dividend value
· Minimal expenses
This doesn’t often more so when you choose the right preferred stock ETF. In the next part, you will get to know about the thirteen best-preferred stock ETFs to invest in 2021.
The Best 13 Preferred Stock ETFs
Here are thirteen of the best-preferred stock ETFs you should invest in 2021.
Innovator ETFs Trust II
Among the preferred stock, we analyzed Innovator ETFs Trust II is the best. This exchange-traded fund was inception 23rd May 2016 by Innovator Capital management, LLC, which manages this ETF. Penserra Capital Management, LLC also helps them to manage it.
It invests in the fixed income market in the United States of America. Innovator ETFs Trust II has a dividend yield of 4.60% and a yearly payout of $1.14.
The price range of this stock over the last 52 weeks is between $17.93 to $24.98.
This ETF has a $153.57 million asset under management, whiles its expense ratio is 0.47%.
Invesco Preferred Portfolio ETF (PGX) Stock
Invesco’s preferred stock was formed on 28th January 2008, and its commencement was on 31st January 2008.
Since Invesco Capital Management, LLC manages it. Currently, it has a dividend rate of 4.93% with an annual payout of $0.75. PGX’s 52-week range is between $9.62 to $15.21.
This ETF is the best when comparing it to its peers such as Invesco Financial Preferred ETF and Invesco Variable Rate Preferred ETF.
The total value of assets under its management is present $6.70 billion. Additionally, the expense ratio is 0.52%. PGX has a turnover rate of 18%, and its percentage of its assets in the top ten is 12.73%.
Global X Superincome Preferred ETF (SPFF)
As an investor, your main priority is getting high returns. And you will get this when you buy the Global X Superincome Preferred ETF (SPFF). The launch of SPFF was on 16th July 2012, and Global X Management Company, LLC manages this ETF.
SPFF has a 52-week range value of $7.31 to $11.77. Its current turnover rate is at 105.48%, while 36.66% is the percentage of its assets in the top ten.
The value of assets under management by SPFF is currently at $197.53 million. If you are considering this ETF, then its expense ratio is at 0.58%.
The dividend yield of Global X Superincome Preferred ETF is at 5.77%, whereas the annual payout is $0.68.
iShares Preferred and Income Securities ETF (PFF)
Among all the preferred stock ETFs we analyzed, we found out that iShares Preferred and Income Securities (PFF) is the central exchange-traded fund. This is because it has $19.19 billion in assets under management.
BlackRock Fund Advisors manage its launch on 26th March 2007 and. PFF has a dividend yield of 4.85%, an annual payout of $1.85, and a payout ratio of 601.90%.
The value of this ETF over 52 weeks is between $24.06 to $38.24. Moreover, it has an expense ratio of 0.46%.
First Trust Preferred Securities and Income ETF (FPE)
FPE’s launch and management are by First Trust Advisors, L.P. This preferred stock is co-managed by Stonebridge Advisors, LLC.
Unlike other funds that focus on the US market, the FPE invests in fixed income markets worldwide. It started on 11th February 2013.
It has $5.83 billion as assets under management, while the expense ratio of investing in FPE is 0.85%.
It has a turnover rate of 28%, whereas its assets in the top ten are equal to 16.23%.
SPDR Wells Fargo Preferred Stock ETF (PSK)
PSK has a valued asset under management at $1.34 billion. Additionally, its expense ratio is 0.45%. SPDR Wells Fargo Preferred Stock exchange-traded fund major on fixed income assets all over the globe. It has a dividend yield of 6.97%, while the annual payout is at $3.08. The price of PSK on a 53-week range is between $29.74 to $44.22.
Invesco Financial Preferred ETF (PGF)
Managed by Invesco Capital Management, LLC, PGF is one of the best-preferred stock funds you should buy. Its price on a 52-week range is between $13.02 to $19.22. Currently, it has $1.64 billion of assets under its management. The expense ratio of this ETF fund is 0.61%.
Global X U.S. Preferred ETF (PFFD)
This fixed income exchange-traded fund invests in securities such as cumulative and non-cumulative preferred, trust preferred and floating, fixed-rate, and variable preferred.
Its inception was on 11th September 2017 and is managed by Global X Management Company, LLC.
The assets under management by PFFD is $875.52 million. The expense ratio of PFFD is 0.23%.
It has a dividend yield of 5.07% and a yearly payout of $1.31. Moreover, its turnover rate is 32.93% and has 17.92% of assets in the top ten.
VanEck Vectors Preferred Securities ex Financials ETF (PFXF)
Under the management of Van Eck Associate Corporation, the PFXF is a preferred stock launched on 16th July 2012.
It has $816.53 million of assets under management, and its expense ratio is 0.41%. The dividend yield of PFXF is 5.32%, while the annual payout is $1.09.
Its price on a 52-week range is $12.69 to $20.54. PFXF’s turnover rate is 45%, and it has one hundred and thirty-eight holdings.
Virtus InfraCap U.S. Preferred Stock ETF (PFFA)
Virtus ETF Adviser LLC started and ran this preferred stock. With $208.95 million of assets under management, PFFA has a high expense ratio of 2.01%.
Its dividend yield rate is 8.23%, while the annual payout is $1.80. PFFA has a turnover of 150%. The price of this fund for 52 weeks is $7.29 to $24.74. However, its worth as of 22nd December 2020 is $21.88.
Global X Variable Rate Preferred ETF (PFFV)
This exchange-traded fund mainly invests in fixed income assets in the US. It is categorized as preferred stock and also as a convertible bond. PFFV’s 52-week lowest price is $23.97, while its highest price is $27.56. According, to its trading data, it has $1.4 million of assets under management. Its inception was on 22nd June 2020, and it has an expense ratio of 0.25%.
InfraCap REIT Preferred ETF (PFFR)
Formed on 7th February 2017, PFFR has an expense ratio of 0.45%. It has assets under management of $57.33 million. PFFR has a dividend yield of 6.24% and an annual payout of $1.46. This fund has ninety-nine number of holdings with a turnover of 66%. PFFR’s 52-week price range of $11.49 to $24.45.
Innovator S&P High-Quality Preferred ETF (EPRF)
EPRF was launched on 23rd May 2016, and its issuer is Elkhorn Investment. This fixed-income fund has an expense ratio of 0.47% and $153.57 million of assets under management. The annual payout of this fund is $1.14, whereas the dividend yield is 4.60%. Its 52-week price range is $17.93 to $24.98, lowest and highest, respectively.
These are the best thirteen preferred stock exchange-traded funds that you should invest in 2021. They have the best return and are secure because they have a smaller number of risks.