PGX: 6% Yield And A Decay Story

Jun. 11, 2024 11:33 AM ETInvesco Preferred ETF (PGX), , , , 4 Comments
Fred Piard
Investing Group Leader
(5min)

Summary

  • Invesco Preferred ETF is a high-yield fund investing in fixed rate preferred securities with at least a B3 rating.
  • The PGX ETF yield is close to 6% and 67% of the portfolio has an investment grade.
  • PGX price and distributions went down by about 40% in 15 years, while cumulative inflation was over 50%.
  • An ex-financials preferred stocks ETF looks a bit better, but also shows some decay.
  • Quantitative Risk & Value members get exclusive access to our real-world portfolio. See all our investments here »

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PGX strategy

Invesco Preferred ETF (NYSEARCA:PGX) is a high-yield fund paying monthly distributions. It has 263 holdings, a 30-day SEC yield of 5.97% and a total expense ratio of 0.50%. It started investing operations on 01/31/2008 and tracks the ICE

Most funds with a yield above 6% suffer from capital and distribution decay. It is also an issue in many closed-end funds. However, capital decay can be avoided or mitigated by rotational strategies, instead of using funds as buy-and-hold instruments. I designed a 5-factor ranking system in 2016, and monitored its performance during several years. I started publishing the eight best ranked CEFs in Quantitative Risk & Value (QRV) after the March 2020 meltdown. Get started with a two-week free trial now. 

This article was written by

Fred Piard
15.94K Followers

Fred Piard, PhD. is a quantitative analyst and IT professional with over 30 years of experience working in technology. He is the author of three books and has been investing in data-driven systematic strategies since 2010.

Fred runs the investing group Quantitative Risk & Value where he shares a portfolio invested in quality dividend stocks, and companies at the forefront of tech innovation. Fred also supplies market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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