PFFD ETF

Global X U.S. Preferred ETF tracks an index including U.S. preferred stocks of all kinds. PFFD is concentrated in top issuers, especially large banks. PFFD has a bond-like return with stock-like risk, underperforming a high-yield bond benchmark and several preferred stocks ETFs.

The PFFD ETF seeks to provide investors with "high yield" income by investing in a broad basket of preferred stock issues. The majority of preferred stock held in the PFFD ETF are issued by financial institutions and utility companies. Income-oriented investors are attracted by the "shiny object" of a 6.4% yield and the fact that preferred shares are higher on the distribution/assets claims ladder as compared to common stock.

Global X U.S. Preferred ETF is a fund that invests in high-yield preferred stocks, which have recently seen a price crash due to Fed rate hikes. With the Fed abandoning its "higher for longer" narrative, this could provide an opportunity for investors. The fund offers diversification and safety through a basket of over 200 preferred stocks, with a focus on financial companies.

Global X U.S. Preferred ETF is a good investment option due to its unique characteristics, market performance, and potential for high yield. The PFFD ETF's portfolio consists of preferred shares from various sectors, with financial companies dominating the holdings. PFFD offers competitive features like a low expense ratio and high yield potential, making it an attractive investment option.

PFFD provides exposure to a broad index of preferred securities. However, broad indices are financials heavy, as they are the largest issuers of preferred shares. Since the root cause of the March regional bank crisis, higher interest rates, have not been resolved, I believe systemic risks still remain. I recommend investors seeking preferred share exposure to consider the PFXF ETF as an alternative, as it excludes financials.

The Global X U.S. Preferred ETF (PFFD) is recommended for its attractive metrics, including a low expense ratio and high yield potential. The ETF is heavily weighted in the Financials sector and has a significant overweighting in Utilities, posing a risk of underperformance in a tech-led market. Despite some risks, the PFFD is considered a good choice for yield-focused investors, offering yields about a full percentage point above investment-grade corporate bonds.