Market Overview

2 New Preferred ETFs to Debut Tuesday

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Amid depressed interest rates on U.S. Treasuries and cash instruments, investors continue to chase yield in other asset classes with preferred stocks and ETFs that track preferred issues among the most popular options.

Investors will get two more choices among preferred ETFs on Tuesday when Van Eck Global's Market Vectors unit unveils the Market Vectors Preferred Securities ex Financials ETF (NYSE: PFXF) and Global X launches the Global X SuperIncome Preferred ETF (NYSE: SPFF).

The Global X SuperIncome Preferred ETF will be the second preferred ETF to lineup of New York-based Global X. Last year, the firm became the first ETF sponsor to introduce an ETF devoted exclusively to preferred stocks issued by Canadian firms. The Global X Canada Preferred ETF (NYSE: CNPF) has $12.1 million in assets under management and a 30-day SEC yield of 3.4 percent.

The Global X SuperIncome Preferred ETF will track the S&P Enhanced Yield North American Preferred Stock Index. Like CNPF, the new Global X preferred offering will charge 0.58 percent per year.

The Market Vectors Preferred Securities ex Financials ETF, which will be the 50th ETF to become part of the Market Vectors lineup, will track the Wells Fargo Hybrid and Preferred Securities ex Financials Index. While the index allows for the inclusion of real estate investment trusts, the Market Vectors Preferred Securities ex Financials ETF will be the first U.S.-listed preferred ETF to exclude preferred stocks issued by traditional banks.

The iShares S&P U.S. Preferred Stock Index Fund (NYSE: PFF) and the PowerShares Financial Preferred (NYSE: PGF), two of the largest ETFs tracking preferreds, allocate about 76 percent and 100 percent, respectively, to the financials services sector.

With an expense ratio of 0.4 percent, the new Market Vectors offering will undercut its existing rivals on fees.

Posted-In: Long Ideas News Bonds Broad U.S. Equity ETFs Short Ideas Dividends Dividends Specialty ETFs

 

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