Do you know what's in your preferred stock ETF? The PowerShares Financial Preferred Portfolio...


Do you know what's in your preferred stock ETF? The PowerShares Financial Preferred Portfolio (PGF) has nearly all holdings in perpetual preferreds - fixed yields with no maturity dates, thus particularly vulnerable to rising rates. The iShares Preferred Stock ETF (PFF) has just 45%. Mutual preferred funds, though more expensive, might offer even better protection against higher rates - they're able to participate in the OTC market where much of the action in floating-rate preferreds takes place.

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Comments (4)
  • davidingeorgia
    , contributor
    Comments (2661) | Send Message
     
    Or just do some research on your own and buy your own basket of preferred stocks from what you think are solid companies. Your only expense will be your time spent on it.
    4 May 2013, 06:28 PM Reply Like
  • mike m.m. m.
    , contributor
    Comments (19) | Send Message
     
    Hi davidingeorgia! Wondering if you could give me your thoughts on the effect of PFF weathering the storm with future rise in interest rates. I've owned PFF for 3 1/2 years and has done quite well. Especially when you factor in the monthly dividends. do I need to be concerned about share price dropping significantly? thank you for your help in advance.
    5 May 2013, 03:17 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    This "news" item sounds like an advert.
    5 May 2013, 05:17 PM Reply Like
  • David Jackson
    , contributor
    Comments (1279) | Send Message
     
    Wonder whether these are cases of some people looking for yield without fully understanding the risks. One of the effects of low interest rates.
    6 May 2013, 04:53 AM Reply Like
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