Exchange traded fund providers continue to roll out new products designed to satisfy investors’ craving for yield.
BlackRock’s iShares has launched the iShares S&P International Preferred Stock Index Fund (IPFF). It has an expense ratio of 0.55%.
“The fund is the first ETF that offers access to local currency, preferred securities that are offered in developed markets outside the U.S.,” BlackRock said in a press release.
Preferred shares usually have higher dividends but don’t carry voting rights. They also take priority over common stock in a bankruptcy.
“Income-seeking investors are starved for yield opportunities, but traditional income sources today are offering historically low yields,” said Darek Wojnar, head of iShares product development at BlackRock. “At the same time, it has been challenging for investors to easily tap into potentially attractive income sources beyond their home markets,” he said, adding the ETF provides currency diversification away from the U.S. dollar.
Preferred stock ETFs already on the market include iShares S&P Preferred Stock Fund (PFF), PowerShares Financial Preferred (PGF), PowerShares Preferred (PGX) and SPDR Wells Fargo Preferred Stock (PSK).
Since most preferred stocks are issued by financial companies, the new the iShares S&P International Preferred Stock has an 84.7% portfolio weighting in the financial sector, according to BlackRock.
“Ongoing volatility, huge pressures on traditional, developed country investment markets and the weakening of formerly secure sources of income are compelling investors to look farther ahead for incremental performance opportunities,” the investment manager said.
BlackRock plans to expand its lineup of products targeting fixed income and international investments. In October, investors flocked to ETFs offering access to emerging markets and high yield bonds in search of diversification, the company added.
iShares S&P Preferred Stock Fund
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