A Popular Preferred ETF With Strong Liquidity

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

Preferred ETFs are a smart way for income-oriented investors to gain not only share price gains but a 5-7% yield while weathering the COVID-19 market volatility.

One such ETF is iShares Preferred and Income Securities ETF (NASDAQ: PFF). This fixed-income ETF provides exposure to U.S. corporate bonds and focuses on broad credit securities.

As a result, this ETF has strong liquidity and tight spreads, making it cost-competitive with its peer funds. PFF is especially recognized for strong block-trading liquidity, which makes it an appealing fund choice for large traders.

PFF currently is the most popular preferred stock ETF with $14.86 billion in assets under management, according to ETF.com. The fund has an expense ratio of 0.46% and has a dividend yield of 5.70%.

Though its year-to-date performance is at -7.37%, PFF is making an upward climb after dipping significantly in mid-March. The fund’s May 6 open of $34.07 still was well within its 52-week range. This specific fund targets preferred securities regardless of credit rating, providing a broad and diversified portfolio.

Chart courtesy of www.stockcharts.com

The majority of PFF’s holdings are allocated to the utilities sector which currently consumes 70.92% of the fund’s portfolio. PFF’s top holdings include preferred shares of Broadcom Inc. (AVGOP), 2.02%, Wells Fargo & Co. (WFCPL), 1.63%, Bank of America Corp. (BACPL), 1.48%, Crown Castle International Corp.(CCIPA), 1.38%, and Citigroup Capital (CPN), 1.27%. 

In summary, preferred ETFs may be the way to go for investors seeking some additional income, as it provides potential upside and a strong yield. PFF is a popular open-ended fund that was chosen by FactSet as an “Analyst Pick.” It is a competitive fund among others in the same sector, and its strong liquidity is helping it to navigate the uncertainties of the current COVID-19 market.

iShares Preferred and Income Securities ETF (NASDAQ: PFF) is an ETF that may be worth inspection as a possible consideration to add to an income-oriented equity portfolio.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Exclusive  Recover Along With the Online Retail Sector
share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE


img
share on:

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader
LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader
LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener
LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program
LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader
LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor
LEARN MORE HERE