Preferred Stock exchange-traded funds (ETF) are those ETFs which invest in a different class of company shares. To understand preferred stock ETFs, one should understand the preferred stocks. Generally, there are stocks which are available for trading on stock exchanges which common public can buy and sell. These are called common stocks and are the most popular, and often the only kind of stock, a company issues. Additionally, a few companies may also issue another class of shares called the preferred stocks. Preferred stocks are a class of shares which represent a better ownership in a company. Owners of preferred stocks have a higher and priority claim on the assets and income of the company as compared to the owners of the common stocks. This means that in case the company goes bankrupt, the preferred stock owners will have a priority (or preferred) claim on whatever is left of the business, before the common stock owners can claim. After preferred stock owners are paid, then the remaining assets and earnings are allocated to the common stock owners. Like common stocks, the preferred stocks also make dividend payments. However, trading and availability of preferred stocks is limited. Additionally, holders of this kind of stock may not have any say, or may have a limited say, in regular operations of the company. For instance, they may not have any voting rights which are available to the common stock holders. Following is the list of all 20 exchange-traded funds that FKnol has in its database for ETFs which belong to the Preferred Stock category:
The iShares Convertible Bond ETF tracks an index of USD-denominated convertible bonds weighted by market value. The index contains only cash-pay convertibles and excludes mandatory and preferred convertibles. ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class: Bonds
The SPDR Bloomberg Barclays Convertible Securities ETF tracks a market-cap weighted index of U.S. convertible securities, with an outstanding issue size greater than $500 million. ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class: Bonds
The ETF Preferred Stock belonging to the Preferred Stock category, North America sub-sector and trading in the US market has the following ETF profile. ...See
First Trust SSI Strategic Convertible Securities ETF (FCVT)
First Trust SSI Strategic Convertible Securities ETF is an actively managed fund of convertible securities from within and outside the US ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class: Bonds
The iShares U.S. Preferred Stock ETF tracks an index of preferred stock traded on the NYSE and NASDAQ. Stocks are selected by rules-based, proprietary methods and weighted by modified market cap. ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class: Preferred Stock
The ETF Preferred Stock belonging to the Preferred Stock category, Micro-Cap sub-sector and trading in the US market has the following ETF profile. ...See
The Invesco Variable Rate Preferred Portfolio tracks a market-cap-weighted index of variable- and floating-rate preferred stocks selected by a proprietary process. ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class: Multi-Asset
AAM Low Duration Preferred & Income Securities ETF (PFLD)
PFLD tracks a market-value weighted U.S. index of short-term preferred and hybrid securities that are multifactor-selected. ...Detailed Profile Dividend Frequency: Monthly Dividend History
Asset Class:
The ETF Preferred Stock belonging to the Preferred Stock category, North America sub-sector and trading in the US market has the following ETF profile. ...See
In the simplest forms, the preferred stock ETFs pool in money from ETF investors and invest it in the preferred stocks. A few variants are available for preferred stocks based on the type of securities. For instance, there are convertible bonds or simply preferred stocks. A company can also raise money by issuing bonds. A special category of bonds are the convertible bonds, which may have a condition attached to its issuance that allows the bonds to be converted to preferred stocks after a certain period of time when the stated condition is met. There can be sector-focused or theme-focused preferred stock ETFs, like infrastructure or REIT preferred stock ETF. Explore the List of REIT ETFs. There are preferred stock ETFs which have a region-specific focus (like U.S.-based) or may have global exposure, and other category includes those which offer regular dividends. Other preferred stock ETFs may invest in varying securities, which include futures contracts, options and swap contracts. The ones investing in convertible bonds may come with low expense ratio, while the ones which invest in multiple assets or purely in preferred stocks may have relatively higher expense ratio. One must also keep in mind that although the investment made by such ETFs are in the company stocks which also have common stocks, the money always goes in the preferred shares (and not the common ordinary shares which go by the same name). These preferred shares trade differently at a different price.
Where do Preferred Stock ETFs Invest?
A long list of companies and different financial instruments exist where the Preferred Stock exchange-traded funds may invest the money collected from the ETF investors. Below is a small sample of companies whose stocks may qualify for investment by Preferred Stock ETFs, though there can be many more businesses and financial instruments where these ETFs can park the capital for returns:
▶ Wells Fargo (WFC): Wells Fargo & Company, incorporated on January 24, 1929, is a bank holding company. The Company is a diversified financial services company. The Company has three operating segments: Community Banking, ....Detailed Company Profile....Dividend History
▶ PNC Financial Services (PNC): The PNC Financial Services Group, Inc., incorporated on January 19, 1983, is a diversified financial services company. The Company has businesses engaged in retail banking, corporate and institutional banking, asset ....Detailed Company Profile....Dividend History
▶ Citigroup Inc. (C): Citigroup Inc. (Citi), incorporated on March 8, 1988, is a financial services holding company. The Companys whose businesses provide consumers, corporations, governments and institutions with a range of financial products ....Detailed Company Profile....Dividend History
▶ Ally Financial Inc. (ALLY): Ally Financial Inc. provides various financial products and services to consumers, businesses, automotive dealers, and corporate customers primarily in the United States and Canada. It operates throug....Detailed Company Profile....Dividend History
▶ J P Morgan Chase and Co (JPM): JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, ....Detailed Company Profile....Dividend History
▶ Bank of America Corp (BAC): Bank of America Corporation, incorporated on July 31, 1998, is a bank holding company (BHC) and a financial holding company. The Company is a financial institution, serving individual consumers, small- ....Detailed Company Profile....Dividend History