Powershares Financial Preferred Stocks ETF: Expecting Continued Gains

Sep.22.10 | About: PowerShares Financial (PGF)

I originally recommended Powershares Financial Preferred Portfolio (NYSE: PGF) on September 28, 2009 (IWB #2925) at $16. It closed Friday at $18.30. (All figures in U.S. currency.)

Sticking with my financial theme this month, I thought I should update this ETF which we recommended at $16 one year ago. Since then it has appreciated nicely closing this week at $18.30. With distributions, that works out to a gain of more than 22% over the past year. During this period the yield has been running between 7.31% and 8.5% depending on when you bought your units.

In case you have forgotten, this ETF holds a basket of high-quality financial preferred shares, which in this climate has been a great place to be. I continue to like this ETF going forward even though it's trading at a 52-week high. I believe this fund still has further to run and could reach the mid-$20s before it will be time to cash out. As investors seek greater security and yield this ETF should continue to enjoy considerable support.

Disclosure: Author is long PGF