Short interest for iShares Preferred and Income Securities ETF gives investors a sense of the degree to which investors are betting on the decline of iShares Preferred and Income Securities ETF's stock. Short interest data is updated every two weeks.

iShares Preferred and Income Securities ETF (NASDAQ:PFF), Short Interest Report

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On CNBC’s &#34;Halftime Report Final Trades,&#34;  Anastasia Amoroso of JP Morgan Private Bank named  iShares Preferred and Income Securities ETF (NYSE: PFF) as her 

Moderna, ConocoPhillips, Vertex Pharmaceuticals And This ETF: CNBC&#39;s &#39;Final Trades&#39;

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ETRACS 2xMonthly Pay Leveraged Preferred Stock Index ETN due September 25, 2048

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On CNBC&rsquo;s &quot;<a href="https://www.cnbc.com/video/2023/04/12/final-trades-vertex-conocophillips-moderna-more.html">Halftime Report Final Trades</a>,&quot; Anastasia Amoroso of JP Morgan Private Bank named iShares Preferred and Income Securities ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pff#NYSE">PFF</a>) as her <a href="https://www.benzinga.com/news/23/04/31766634/rpm-international-rambus-and-2-other-stocks-insiders-are-selling"> final trade. </a>
Jim Lebenthal of Cerity Partners said Vertex Pharmaceuticals Incorporated (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vrtx#NASDAQ">VRTX</a>)&nbsp;is a &quot;new position&quot; for him.
Vertex announced Health Canada market authorization for ORKAMBI in children with cystic fibrosis aged 1 to less than 2 years.
Don&rsquo;t forget to check out our <a href="https://www.benzinga.com/premarket/"> premarket coverage here</a>.
Stephen Weiss of Short Hills Capital Partners named Moderna, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/mrna#NASDAQ">MRNA</a>) as his final trade.
Moderna said its first influenza candidate, mRNA-1010, did not accrue sufficient cases at the interim efficacy analysis to declare early success in the Phase 3 Northern Hemisphere efficacy trial and the independent DSMB recommended continuation of efficacy follow-up.
Joseph Terranova of Virtus Investment Partners picked ConocoPhillips (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>).
ConocoPhillips disclosed a detailed 10-year operating and financial plan at an analyst &amp; investor meeting. The company projects strong cash flow, with compounded annual growth rate (CAGR) in cash from operations and FCF of around 6% and 11%.
Price Action: ConocoPhillips shares rose 0.7% to close at $107.53, while Moderna rose 0.2% to settle at $155.56 on Wednesday. Vertex Pharmaceuticals shares added 0.5% to settle at $326.37 during the session. 
Check This Out: <a href="https://www.benzinga.com/trading-ideas/long-ideas/23/04/31767443/top-5-financial-stocks-that-are-set-to-fly-in-april"> Top 5 Financial Stocks That Are Set To Fly In April </a>
Photo via Pixabay.&nbsp;

Moderna, ConocoPhillips, Vertex Pharmaceuticals And This ETF: CNBC's 'Final Trades'

The Office of North Carolina Representative Virginia Foxx has reported a sale of iShares Preferred and Income Securities ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PFF#NASDAQ">PFF</a>) stock on April 4, 2023. According to the Periodic Transaction Report the transaction was placed on April 4, 2023.
What Happened: A Periodic Transaction Report from the House of Representatives Clerk's Office on April 4, 2023 showed that Foxx sold $50,001 - $100,000 of <a href="www.benzinga.com/quote/PFF">iShares Preferred and Income Securities ETF</a> stock.
iShares Preferred and Income Securities ETF shares are trading down 0.11% at $30.93 at the time of writing.
<h3>The Importance of Congressional Transactions</h3>
Congressional transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.
A Congressional transaction is when any Representative or Senator either buys or sells an individual stock. Anyone working in Congress must file a Periodic Transaction Report to inform the public of their recent transaction within 30 days of being notified of the transaction and within 45 days of the transaction date.
When a Senator or Representative makes a new purchase, that could be an indication that they expect the stock to rise.
A sale, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
In April 2012, Former President Barack Obama signed the STOCK Act into law. The act prohibits members of Congress from using private information given to them by their position for personal gain such as buying or selling a stock. The act also expanded disclosure requirements for members of Congress by requiring them to file a monthly disclosure. 
<h3>Trade Recap</h3>
A April filing states that North Carolina Representative Virginia Foxx sold shares of iShares Preferred and Income Securities ETF. The exact amount of the transaction remained unknown but the filing states a range of $50,001 - $100,000.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

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Recent Report Shows That Rep. Virginia Foxx Sold Up to $100K Worth of iShares Preferred and Income Securities ETF Stock

A common tactic among issuers of exchange-traded funds when bringing new products to market that are similar to existing funds is to undercut established rivals on fees. That is what Global X did Wednesday when it launched the Global X U.S. Preferred ETF (BATS: PFFD).
The Global X U.S. Preferred ETF charges 0.23 percent per year, or $23 on a $10,000 investment, well below the preferred ETF category average of 0.48 percent. The iShares U.S. Preferred Stock ETF (NASDAQ: <a class="ticker" href="/stock/pff#NASDAQ">PFF</a>), the largest preferred stock ETF trading in the U.S., has an annual expense ratio of 0.47 percent.
Preferred stocks are hybrid securities with bond- and equity-like traits. The asset class is beloved for its high yields and regular dividends, but that also makes it vulnerable to rising Treasury yields. Preferred stockholders rank ahead of common equity investors in the event of issuer default or bankruptcy. While not guaranteed, preferred dividends are priorities for issuing companies because failure to pay preferred dividends can harm a company&#39;s credit rating.
<h3>More About The New Preferred ETF</h3>
PFFD tracks the BofA Merrill Lynch Diversified Core U.S. Preferred Securities Index, providing investors with broad-based exposure to U.S. preferred securities.
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10048419/renewed-enthusiasm-for-bank-loan-etfs">Banking On Bank Loans</a>
Preferred stocks &ldquo;play an important role in potentially improving a portfolio&#39;s yield, which may be particularly appealing to investors during this persistently low interest rate environment,&rdquo; said New York-based Global X <a href="http://www.prnewswire.com/news-releases/global-x-funds-announces-launch-of-the-global-x-us-preferred-etf-pffd-300518820.html">in a statement</a>. &ldquo;Preferreds are junior to bonds on a firm&#39;s capital structure, therefore often resulting in higher yields than similar fixed income securities. In addition, the income received from preferred stocks is often classified as qualified dividend income, which is taxed at a lower rate than the income received from corporate bonds, which is usually taxed as ordinary income.&rdquo;&nbsp;
The new ETF&#39;s &ldquo;underlying index includes fixed, floating and variable-rate preferred securities with a minimum amount outstanding of $100 million,&rdquo; according to Global X. Issues are capped at 10 percent of the fund&#39;s weight. Currently, the largest issue in PFFD is 3.3 percent of the fund&#39;s weight and the new ETF&#39;s top 10 holdings combine for just about 18 percent of its weight.
<h3>Not The First</h3>
PFFD is the second preferred ETF in the Global X stable, following the Global X SuperIncome Preferred ETF (NYSE: <a class="ticker" href="/stock/spff#NYSE">SPFF</a>). That ETF debuted over five years ago and now has almost $246 million in assets under management and a 30-day SEC yield of nearly 6.8 percent.
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10048455/etf-fee-competition-expect-more-of-the-same">Expect More ETF Fee Battles</a>

Among the high-yielding asset classes benefiting from the Federal Reserve holding off on raising interest rates to this point in the year are preferred stocks and the corresponding exchange-traded funds.
TheiShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) has a 30-day SEC yield of 5.3 percent and is up 6.6 percent year-to-date. Income investors embraced preferred stocks, in large part, because of high yields, but as the spike in Treasury yields earlier this year and in 2013 taught investors, high-yielding assets are <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">vulnerable to rising rates</a>.
<h3>The Appeal Of A Preferred Stock</h3>
A preferred stock is a type of security that offers characteristics of both bonds and equities. The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">primary source</a> of allure with preferreds is yield, although preferred shareholders are higher on the totem pole in the event of issuer bankruptcy or default than are common equity holders.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/09/8413447/a-rookie-etf-to-consider">A Rookie ETF To Consider</a></bzrelatedlink>
However, investors&#39; desire for income via preferreds could be tested in the near term. The August jobs report out Thursday could provide the Federal Reserve an avenue with which to soon raise interest rates. As it is, Fed fund futures point to a rate hike in December. Data suggest a rush away from preferreds could be painful because so much money has piled into ETFs such as PFF.
&ldquo;The surging AUM mostly occurred since the start of 2015 as the asset class registered $10 billion plus of inflows. Preference stock ETFs were in fact the most popular fixed income asset class of last year in terms of relative inflows, as the $4.8 billion that flowed into the asset class over 2015 represented 30 percent of the AUM seen at the start of the year, more than any of the seven bond ETF asset classes tracked by Markit ETF Analytics,&rdquo; said Markit <a href="http://www.markit.com/Commentary/Get/31082016-Credit-Preferred-stocks-become-preferred-ETFs">in a recent note</a>.
<h3>Ignorance Is (Rarely) Bliss</h3>
Of all the crowded trades market observers are pontificating about this year, think Treasurys, low volatility ETFs and gold, just to name a few, preferreds never enter the conversation. Ignorance is not always bliss, not a time when PFF has added $2.9 billion in new assets year-to-date, a fair percentage of its total AUM, and certainly not when the Fed could be nearing another rate hike.
Conversely, the benchmark ETF offering exposure to convertible bonds, the best-performing fixed income asset during Fed tightening cycles, has seen just $103.9 million in year-to-date inflows.
Clearly, investors like the promise of almost guaranteed income from preferreds, indicating they are not expecting the Fed to embark upon an all-out tightening cycle.
&ldquo;The differing levels of investor enthusiasm towards the two asset classes shows that investors in the current market would rather pass on capital upside in order to receive the type of guaranteed income that made preference stock such a popular investment with Warren Buffet,&rdquo; added Markit.
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With U.S. interest rates hovering around historic lows, the income from many fixed-income investors is dwindling. And with few, if any, sign from the Federal Reserve that interest rates are going to rise anytime soon, investors are increasingly seeking higher-yielding assets within the fixed income universe.
That includes this year&#39;s well-documented return to preferred stocks and the corresponding exchange-traded funds. Income investors embraced preferred stocks, in large part, because of high yields, but as the spike in Treasury yields earlier this year and in 2013 taught investors, high-yielding assets are <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">vulnerable to rising rates</a>.
Of course, sensitivity to rising rates comes by way of a bond&#39;s duration; the longer the duration, the more sensitive it is to fluctuations in interest rates.
<h3>What Are Preferreds?</h3>
A preferred stock is a type of security that offers characteristics of both bonds and equities. The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">primary source</a> of allure with preferreds is yield, although preferred shareholders are higher on the totem pole in the event of issuer bankruptcy or default than are common equity holders.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7911570/why-its-a-good-idea-to-prefer-preferred-etfs">Why It's A Good Idea To Prefer Preferred ETFs</a></bzrelatedlink>
The Elkhorn S&amp;P High Quality Preferred ETF (BATS: EPRF) represents a new avenue to an old asset class, and, as it matures, EPRF could prove to be a better preferred mousetrap.
The Elkhorn S&amp;P High Quality Preferred ETF follows the S&amp;P U.S. High Quality Preferred Stock Index, &ldquo;which selects fixed-rate investment grade preferred issues (BBB- or higher) from U.S. listed preferred stocks and maintains an allocation of 75 percent to cumulative preferreds,&rdquo; according to Illinois-based <a href="http://www.elkhorn.com/etf/detail.aspx?ticker=eprf">Elkhorn</a>.
Call risk is an issue to consider with preferred strategies, and EPRF might have some advantages on that front as well.
<h3>The Appeal Of EPRF</h3>
&ldquo;The analysis of the <a href="http://us.spindices.com/indices/fixed-income/sp-us-preferred-stock-index">S&amp;P U.S. Preferred Stock Index</a> shows that if all preferreds at increased risk of being called are indeed called over the next three years, preferreds would lose approximately 17bps per year versus high yield. For yield-focused investors, the preferreds&rsquo; call risk appears insignificant,&rdquo; said Elkhorn&#39;s Graham Day on the <a href="http://www.indexologyblog.com/2016/08/15/think-rates-will-stay-low-consider-preferreds-over-high-yield-bonds/">S&amp;P Dow Jones Indexology blog</a>.
EPRF&#39;s underlying &ldquo;high-quality index includes investment-grade constituents only, whereas 44 percent of the broader preferred index includes speculative-grade stocks and another 14 percent is not rated. Similar to corporate bonds, preferred stocks are sensitive to changes in interest rates, however, also similar to equity, preferred stocks exhibit more volatility than most fixed income asset classes,&rdquo; according to <a href="http://www.indexologyblog.com/2016/06/20/sp-u-s-high-quality-preferred-stock-index-a-venn-of-an-index/">S&amp;P Dow Jones Indices</a>.
At a time when investors are emphasizing quality, notable is the fact that EPRF is the only preferred ETF going out of its way to do the same.
&ldquo;Within the preferreds space, high quality, investment grade preferreds offer investors access to preferreds while providing unique exposure outside of banks or the UK as well as a defensive tilt to hedge against down markets. In summary, preferreds appear well positioned against high yield bonds for investors looking for a combination of higher yields and lower risks,&rdquo; added Day.
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Reasons To Stick With Preferreds And This ETF

Preferred stocks and the relevant exchange-traded funds are once again a popular destination for income investors thanks in large part to the Federal Reserve continually holding off on raising interest rates to this point in the year.
<h3>High Quality Preferred Joins BATS</h3>
Relative to other corners of the fixed income ETF landscape, the preferred space is sparsely populated, indicating there is room for innovation and competition. Some of that new competition and innovation arrived last month with the debut of the Elkhorn S&amp;P High Quality Preferred ETF (BATS: EPRF). What makes EPRF unique is its underlying index, which possesses an emphasis on quality not found with traditional preferred equity benchmarks.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/06/8128053/fed-indulges-this-preferred-etf">Fed Indulges This Preferred ETF</a></bzrelatedlink>
The Elkhorn S&amp;P High Quality Preferred ETF follows the S&amp;P U.S. High Quality Preferred Stock Index, &ldquo;which selects fixed-rate investment grade preferred issues (BBB- or higher) from U.S. listed preferred stocks and maintains an allocation of 75 percent to cumulative preferreds,&rdquo; according to Illinois-based <a href="http://www.elkhorn.com/etf/detail.aspx?ticker=eprf">Elkhorn</a>.
<h3>High Yield And Preferreds</h3>
Like other high-yielding asset classes, preferred stocks and the corresponding ETFs are viewed as negatively correlated to hawkish changes in U.S. borrowing costs. Income investors embraced preferred stocks, in large part, because of high yields, but as the spike in Treasury yields last year and in 2013 taught investors, high-yielding assets are <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">vulnerable to rising rates</a>. 
EPRF&#39;s underlying &ldquo;high-quality index includes investment-grade constituents only, whereas 44 percent of the broader preferred index includes speculative-grade stocks and another 14 percent is not rated.&nbsp; Similar to corporate bonds, preferred stocks are sensitive to changes in interest rates, however, also similar to equity, preferred stocks exhibit more volatility than most fixed income asset classes,&rdquo; according to <a href="http://www.indexologyblog.com/2016/06/20/sp-u-s-high-quality-preferred-stock-index-a-venn-of-an-index/">S&amp;P Dow Jones Indices</a>. 
As has been noted in this space, preferred stocks have perks. Preferred stocks and ETFs have another advantage: Even if the issuer cuts or suspends the dividend on its common stock, it essentially must continuing pay preferred dividends.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/06/8128056/the-long-term-case-for-housing-etfs">The Long-Term Case For Housing ETFs</a></bzrelatedlink>
&ldquo;Unlike common stock, most preferred dividends are cumulative, meaning dividend payments accrue even if not paid when scheduled. If a firm suspends paying dividends, it must pay preferred shareholders in full before paying any dividends to common shareholders,&rdquo; said S&amp;P Dow Jones Indices <a href="http://www.indexologyblog.com/2016/04/29/preferences-of-preferred-stock/">in a recent note</a>.
<h3>Unique Advantages For EPRF</h3>
However, EPRF has its own set of advantages. As S&amp;P Dow Jones Indices, investment-grade and cumulative preferreds, such as the issues found in EPRF, often have lower drawdowns during times of market stress than traditional preferred stocks.

Why This Could Be The Preferred ETF Of The Future

This year&#39;s flows action in the world of exchange-traded funds has largely been defined by risk-off sentiment. That includes advisors and investors flocking to fixed income ETFs.
At various points this year, six of the top 10 asset-gathering ETFs were bond funds. Although that number has dropped to four, that does not diminish investors&#39; thirst for bond ETFs. In fact, that desire was on display in May as bond ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7969910/low-fee-bond-etfs-are-where-its-at">kept packing on assets</a>.
<h3>Asset Gathering</h3>
&ldquo;Investors put an additional $4.2 billion of net new money into fixed income ETFs in May, pushing the year to date flows figure to $42 billion, according to Factset data. While demand remained strong for actively managed fixed income mutual funds this year, up until last week, a wide variety of lower-cost ETFs that offer intra-day liquidity and typically seek to passively replicate an index have been gaining share in 2016,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Monday. 
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/06/8076757/its-getting-pricey-to-chase-yield">It's Getting Pricey To Chase Yield</a></bzrelatedlink>
The iShares Core U.S. Aggregate Bond Fund (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>) is this year&#39;s top asset-gathering bond ETF and only the SPDR Gold Trust (ETF) (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) has added more new assets year-to-date than AGG. Making AGG&#39;s haul all the more impressive is the fact that has added more than double the new money as its primary rival, the Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>). However, BND is still among the top 10 asset-gathering ETFs. 
<h3>Bond ETF Flows And Yield Hunting</h3>
Bond ETF flows also highlight investors&#39; appetite for yield, and that hunt for yield is helping ETFs holding preferred stocks and senior loans <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/8033498/sizing-up-senior-loan-etfs">added new assets </a>this year.
&ldquo;Another popular ETF in May was the PowerShares Senior Loan Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>)), which invests in the 100 largest bank loans with floating rate coupons. BKLN gathered $510.1 million of new assets in May, erasing the outflows the ETF suffered through the first four months of 2016. Unlike fixed-rate ETFs, coupons of BKLN&#39;s holdings adjust higher as interest rates rise,&rdquo; said S&amp;P Capital IQ.
Floating rate notes and senior loans are unique in that their yield is tied to a benchmark such as LIBOR, rather than being fixed. Loans are also higher on the capital structure than other unsecured obligations, and some even carry floors to insure you earn a respectable yield even if rates stay low. Their coupon rate typically resets every 90 days, resulting in a duration shorter than three months, <a href="http://www.benzinga.com/etfs/specialty-etfs/14/05/4586380/uncertainty-on-the-rise-for-bank-loan-etfs">Benzinga previously reported</a>.
&quot;Meanwhile, iShares US Preferred Stock ETF (iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>)) pulled in $436.9 million of new money last month. The ETF holds approximately 300 securities that combine bond characteristics, such as a fixed stream of income and are senior to common stocks, with common stock characteristics, such as ownership in the company and trading on an exchange. PFF, which has a 0.47 percent expense ratio, sports a 5.8 percent 30-day SEC yield,&rdquo; added S&amp;P Capital IQ.

BKLN

Guess What? Investors Still Love Bond ETFs

Income investors are loving life in 2016. The Federal Reserve has yet to raise interest rates, and with each passing month without a rate hike, it appears increasingly likely that the most rate hikes coming this year will be two.

	Predictably, this scenario has been a boon for plenty of income-generating asset classes and sectors, including preferred stocks and exchange-traded funds. A preferred stock is a type of security that offers characteristics of both bonds and equities. The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">primary source</a> of allure with preferreds is yield, although preferred shareholders are higher on the totem pole in the event of issuer bankruptcy or default than are common equity holders.
<h3>
	A Few Preferred Names</h3>

	The iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>), which tracks the S&amp;P U.S. Preferred Stock Index, is among the preferred ETFs benefiting from the Fed&#39;s reluctance to raise rates. Year-to-date, PFF has added $738.3 million in new assets. With a trailing 12-month yield of 5.8 percent, it is easy to see why <a href="http://www.benzinga.com/news/16/02/6191280/hiding-out-with-a-preferred-stock-etf">investors are fond of PFF</a>.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/02/6191280/hiding-out-with-a-preferred-stock-etf">Hiding Out With A Preferred Stock ETF</a></bzrelatedlink>

	Preferred stocks and ETFs have another advantage: Even if the issuer cuts or suspends the dividend on its common stock, it essentially must continuing pay preferred dividends.

	&ldquo;Unlike common stock, most preferred dividends are cumulative, meaning dividend payments accrue even if not paid when scheduled. If a firm suspends paying dividends, it must pay preferred shareholders in full before paying any dividends to common shareholders,&rdquo; said S&amp;P Dow Jones Indices <a href="http://www.indexologyblog.com/2016/04/29/preferences-of-preferred-stock/">in a recent note</a>.

	PFF has an international counterpart, which has benefited from low and negative interest rates throughout the ex-U.S. developed world. The iShares International Preferred Stock ETF (NYSE: <a class="ticker" href="/stock/ipff#NYSE">IPFF</a>), which follows the S&amp;P International Preferred Stock Index, has added nearly $77 million in fresh capital this year. That is an especially tally when considering IPFF now has $108.7 million in assets under management.

	IPFF, which yields 6.1 percent on a trailing 12-month basis, devotes a combined 90.5 percent of its weight to Canada and U.K. preferreds. IPFF is more exposed to the impact of oil prices on preferreds than is PFF.

	&ldquo;The S&amp;P International Preferred Stock Index has over 20 percent exposure to companies in the energy sector; meanwhile, the S&amp;P U.S. Preferred Stock Index has no exposure. As a result, the U.S. index has significantly outperformed its international counterpart. Since August 2014, the S&amp;P U.S. Preferred Stock Index was up 10.0 percent, while the S&amp;P International Preferred Stock Index was down -27.5 percent as of March 2016,&rdquo; added S&amp;P Dow Jones Indices.

IPFF

Why It's A Good Idea To Prefer Preferred ETFs

Less than two months removed from the Federal Reserve&#39;s first interest rate hike in nearly a decade, volatile global equity markets have renewed investors&#39; enthusiasm for rate-sensitive asset classes.
That theme explains why five of this year&#39;s top 10 asset-gathering exchange-traded funds are fixed income funds and one of the other five is the Utilities SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>). Although investors have pulled $62 million from the iShares S&amp;P U.S. Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) since the start of the year, the time could be right for investors to consider PFF and rival preferred stock ETFs.
Sensitivity to rising rates comes by way of a bond&#39;s duration; the longer the duration, the more sensitive it is to fluctuations in interest rates.
<h3>Preferred Stocks</h3>
A preferred stock is a type of security that offers characteristics of both bonds and equities. The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">primary source</a> of allure with preferreds is yield, though preferred shareholders are higher on the totem pole in the event of issuer bankruptcy or default than are common equity holders. In the case of PFF, the ETF is undoubtedly tempting with a trailing 12-month yield of almost 5.8 percent.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6191212/an-active-etf-with-an-all-star-pedigree">An Active ETF With An All-Star Pedigree</a></bzrelatedlink>
As is the case with bonds, preferreds are sold at par value, or offer a fixed or floating rate of income, so prices fluctuate with interest rates, wrote William Scapell, director of fixed income and preferred securities portfolio manager at Cohen &amp; Steers, for <a href="http://www.investmentnews.com/article/20150524/REG/305249994/preferred-securities-seen-as-attractive">InvestmentNews</a>.
&ldquo;Most preferred issues tend to be banks and other financial companies. Following massive regulatory changes in the financial sector, the U.S. banking sector is considerably less leveraged and arguably safer than it was pre-crisis. So, while more boring than they once were, U.S. financials may be well positioned to potentially provide a dividend stream,&rdquo; said BlackRock Global Chief Investment Strategist Russ Koesterich <a href="https://www.blackrockblog.com/2016/01/29/ride-volatility/">in a recent note</a>.
<h3>PFF</h3>
PFF certainly fits the bill as an avenue for skirting volatility. The ETF&#39;s beta is just 0.17 with a three-year standard deviation of just under 4.1 percent. PFF, which tracks the S&amp;P U.S. Preferred Stock Index, is home to 281 preferred issues.
Preferred stock ETFs are among the assets that can&#39;t be counted on&ldquo;to produce massive, double-digit returns. Investors looking for more aggressive profits probably need to test their nerves and try to time the market bottom. For the rest, a better approach may be seeking more modest returns with lower volatility, via a focus on portfolio construction, risk exposures and less traditional asset classes,&rdquo; added Koesterich.
Image Credit: <a href="https://pixabay.com/en/landscape-grassland-field-meadow-768547/">Public Domain</a>

Intraday Update

Hiding Out With A Preferred Stock ETF

While listed as stocks, &ldquo;preferred&rdquo; shares are a hybrid between stocks and bonds. They provide a fixed dividend that takes priority over payouts on common stock. At the same time, they are highly sensitive to interest rates like bonds, i.e., as rates rise, prices generally fall, and vice versa. As such, the conventional thinking approaching the likely Fed rate hike in mid-December was that preferred stocks would suffer along with other higher yielding instruments that serve as competition for low-rate fixed income securities. Indeed, in the days leading up to the Fed meeting, preferred stocks sold off sharply as an impending rate hike became more apparent.

	Then a funny thing happened. After the rate hike occurred, preferred stocks began to rally. And the development has even gone somewhat beyond the &ldquo;sell the rumor, buy the news&rdquo; stage at this point. Judging by at least one popular preferred stock ETF, the PowerShares Fin. Preferred&nbsp;Port. (ETF) (NYSEARCA:PGF), preferred stocks have actually moved to new 52-week highs. And bear in mind that this does not even adjust for PGF&rsquo;s hefty 5.63% yield.

	<img alt="" src="https://40.media.tumblr.com/3fa887f93070ae6e66a32a75139fad6c/tumblr_inline_o03rdkWZiW1sq14jh_500.jpg" style="width: 500px; height: 362px;" />

	So what is the deal here? Why is this scenario not unfolding along conventional wisdom? Well, for one, financial companies do stand to benefit in some ways from rising interest rates. Therefore, perhaps that fact is countering the ill-effects of the rate hike on the competitiveness of preferred stocks&rsquo; yields. Further, while the Fed did hike the short-term Fed Funds rate, the jury is still clearly out on a rising longer-term rate environment. If longer-term rates remain subdued, the attractiveness of securities like preferred stocks could persist.

	Regardless of the underlying fundamental &ldquo;reason&rdquo; that preferred stocks have jumped in the wake of the Fed rate hike, here is the real reason as we see it: it was the least obvious, most counter-intuitive reaction. As the old market bromide goes, &ldquo;if it&rsquo;s obvious, it&rsquo;s obviously wrong.&rdquo; And as unsatisfying an explanation as that may be for most people, it is an utterly reasonable and adequate explanation to us.

	This touches on the very core of the investment process, which is determined by human natural reactions. And, at least in the investment world, human nature will invariably dictate that one do the wrong thing at the wrong time. So while we don&rsquo;t know if preferred stocks will continue to do well going forward, we do know one thing.

	In investing, when faced with going the obvious route or the counter-intuitive route, counter-intuitive is the &ldquo;preferred&rdquo; way for us. 
	________

	<a href="http://jlfmi.tumblr.com/About">More</a> from Dana Lyons, JLFMI and My401kPro.

	The commentary included in this blog is provided for informational purposes only. It does not constitute a recommendation to invest in any specific investment product or service. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

Education

PowerShares Exchange Traded Fund Financial Preferred Portfolio

Lyons: Counter-Intuitive Investing Is The 'Preferred' Way

As investors digest the fact that the Federal Reserve is increasingly determined to raise interest rates following its December meeting, a plethora of rate-sensitive asset classes, sectors and exchange-traded funds are likely to come under intense scrutiny.
	Just look at last week&#39;s repudiation of utilities stocks and ETFs. Similar treatment could extend to real estate stocks and ETFs, as well as master limited partnerships, long duration bonds and other favored areas of income generation.
 The same probably holds true <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5967263/for-etf-investors-its-all-about-yellen">for preferred stocks and ETFs</a> such as the iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>).
<h3>Maybe Don't Ditch...</h3>
However, income investors might not want to be too hasty in ditching PFF and rival preferred ETFs, even as interest rates climb.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5966979/come-together-low-volatility-meets-equal-weight-in-these-etfs">Come Together: Low Volatility Meets Equal-Weight In These ETFs</a></bzrelatedlink>
&ldquo;While it is true that preferred stocks may see price declines as traditional long-term bonds would, the losses may be more than offset by the potential yield. Additionally, because we expect the rate rises to be gradual, we wouldn&rsquo;t expect to see big downward spikes in preferred prices. Preferred stocks may also be attractive due to the fact that they&rsquo;re issued mainly by financial companies, like banks. That&rsquo;s because banks have historically tended to do well in rising rate environments, as they can benefit from making loans at higher interest rates,&rdquo; according to a recent blog post <a href="https://www.blackrockblog.com/2015/11/04/case-for-preferred-stocks/">by BlackRock</a>, PFF&#39;s issuer.
<h3>Income Investors And Preferred Stocks</h3>
Income investors embraced preferred stocks, in large part, because of high yields, but as the spike in Treasury yields earlier this year and in 2013 taught investors, high-yielding assets are <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">vulnerable to rising rates</a>.
Of course, sensitivity to rising rates comes by way of a bond&#39;s duration; the longer the duration, the more sensitive it is to fluctuations in interest rates. 
A preferred stock is a type of security that offers characteristics of both bonds and equities. The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">primary source</a> of allure with preferreds is yield, though preferred shareholders are higher on the totem pole in the event of issuer bankruptcy or default than are common equity holders. In the case of PFF, the ETF is undoubtedly tempting with a trailing 12-month yield of almost 6.2 percent.
&ldquo;Because preferred stocks have a fixed dividend and may not fluctuate the way common stocks do when the market changes, they can potentially reduce the overall volatility of an equity or high yield portfolio. Keep in mind, however, that preferred stocks are more volatile than traditional fixed income and can carry more risk when financial sectors are under pressure,&rdquo; added BlackRock.
Although investors may be fretting about higher interest rates, that mentality is not reflected in their treatment of PFF; the ETF has added nearly $526 million in new assets since the start of the fourth quarter. 
Image Credit: <a href="https://pixabay.com/en/mark-marker-hand-leave-516277/">Public Domain</a>

Don't Abandon Preferred ETFs

One way or the other, the Federal Reserve will be making a decision on interest rates on Thursday. Either benchmark U.S. interest rates are going to continue hovering near or zero or, as some market participants expect, those rates will rise by 25 basis points.

	Examining recent flows data for select rate-sensitive exchange traded funds is a task unlikely to give investors a clear idea regarding what the Fed is going to decide. For example, the high-yields and bond-like properties of preferred stocks would seemingly make that asset class vulnerable to higher interest rates, but investors have recently been pouring money into the iShares U.S. Preferred Stock ETF (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) and the PowerShares Preferred Portfolio (NYSE: <a class="ticker" href="/stock/pgx#NYSE">PGX</a>), among&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">other preferred ETFs</a>.

	Conversely, investors have been far less sanguine about utilities ETFs. In fact, they have been downright skittish as highlighted by the $549.3 million in month-to-date departures from the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>), the largest utilities ETF.
<h3>
	Why This Makes Sense</h3>

	Investors&#39; angst as it pertains to the utilities ahead of potentially hawkish moves by the Fed makes sense. In the case of XLU, it is the most negatively correlated to interest rates of the nine sector SPDR ETFs. History confirms the laggard status of utilities stocks following interest rate increases.

	&quot;Telecom was the worst or second worst performing sector in terms of average cumulative returns in 6 out of the 12 months following Fed liftoff,&rdquo; said Bank of America in a&nbsp;<a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5834437/dont-mess-with-these-etfs-if-interest-rates-rise#ixzz3lxABw4Eu">note out last week</a>. The bank added &ldquo;utilities were lackluster throughout the 12 months after Fed liftoff.&rdquo;

	Investors&#39; September disdain for utilities ETFs has not been limited to XLU. The Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>) and the iShares U.S. Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) have lost $30 million combined this month.

	Some traders are even outright betting against utilities ETFs. Short interest in XLU was recently as high as 36 percent of shares outstanding, according to AltaVista Research, the&nbsp;<a href="http://www.etfresearchcenter.com/archives/Sector_SPDR_Analyzer_090115_ERC.pdf">third-highest total</a> among the nine SPDRs.

	Interestingly, utilities stocks are inexpensive relative to the S&amp;P 500, a rarity for the ultra-defensive sector that usually forces investors to pay-up for the luxury of that defensive posture. XLU&#39;s estimated 2015 price-to-earnings ratio is 15.5 compared to 16.7 for the S&amp;P 500, according to AltaVista.

	&ldquo;Environmental regulations and distributed generation represent dual threats to profitability-- witness the declining trend in Return on Equity and margins over the past few years, which may appear small but are forecast to result in less than 1% earnings growth between 2010-15E. That said, the P/E ratio has come off its highs from earlier this year, so the sector could get another look from value and income value investors, especially if the Fed delays raising,&rdquo; said AltaVista of XLU.

	The research firm has a Neutral rating on XLU.

Sector ETFs

Short Ideas

iShares Trust Dow Jones US Utilities Sector Index Fund

Ahead Of The Fed, Investors Ditch Utilities ETFs

Income investors embraced preferred stocks, in large part, because of high yields, but as the spike in Treasury yields earlier this year and in 2013 taught investors, high-yielding assets are <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">vulnerable to rising rates</a>.

	Preferred stocks are often viewed as hybrid securities, displaying both bond- and equity-like traits, and reside higher on the totem pole than do common stocks in terms of investor claims in the event of issuer default. As is the case with bonds, preferreds are sold at par value, or offer a fixed or floating rate of income, so prices fluctuate with interest rates, wrote William Scapell, director of fixed income and preferred securities portfolio manager at Cohen &amp; Steers, for <a href="http://www.investmentnews.com/article/20150524/REG/305249994/preferred-securities-seen-as-attractive" target="_blank">InvestmentNews</a>.
<h3>
	ETFs To Play</h3>

	Legacy preferred ETFs, including the iShares U.S. Preferred Stock ETF (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) and the PowerShares Preferred Portfolio (NYSE: <a class="ticker" href="/stock/pgx#NYSE">PGX</a>), sport sizable enough yields that these funds qualify as &ldquo;high-yield&rdquo; instruments, in turn making these ETFs and others like them vulnerable to higher interest rates. PFF and PGX carry 30-day SEC yields of 5.35 percent and 5.94 percent, respectively.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5832788/these-sector-etfs-could-shine-after-a-rate-hike">These Sector ETFs Could Rise After A Rate Hike</a>

	That is to say if investors were betting that the Federal Reserve will announce higher interest rates following the conclusion of its two-day meeting Thursday, preferred stocks and ETFs <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5834437/dont-mess-with-these-etfs-if-interest-rates-rise">would not be the place</a> investors would be running to. However, that is what they are doing.

	Since the start of the third quarter, PFF has added just over $350 million in new assets. PGX has seen $49.6 million of inflows over the past 90 days, placing it thirteenth among all PowerShares ETFs, <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">according to issuer data</a>.

	The fourth-place ETF on that PowerShares list is the PowerShares Variable Rate Preferred Portfolio Fund (NYSE: <a class="ticker" href="/stock/vrp#NYSE">VRP</a>), which makes sense because VRP is the one preferred ETF <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5782521/the-preferred-preferred-etf-for-fed-shenanigans#ixzz3llHVF2RN">designed specifically with </a>higher interest rates in mind.

	&ldquo;Debt securities with floating or variable rates may help protect investors from a rising rate environment. Even if maturities extend beyond a call date, interest rate risk can be much lower and is limited to the time until the next rate reset,&rdquo; according to a&nbsp;<a href="http://www.blog.invesco.us.com/extension-risk-when-interest-rates-rise-fixed-income-investing">new research note</a> from PowerShares.

	VRP, which has a 30-day SEC yield of 5.16 percent, has added $120.4 million in new asset over the past three months. With that yield, VRP is certainly in the high-yield conversation, so its recent burst of asset-gathering proficiency cements the notion that investors are embracing preferred ETFs at a time when it would appear risky to do so.

	Investors are also embracing actively managed preferred ETFs. In the current quarter, the First Trust Preferred Securities and Income ETF (NYSE: <a class="ticker" href="/stock/fpe#NYSE">FPE</a>) has taken in $86.4 million of its $349.6 million in assets under management.

Preferred Stock ETFs Provide Potential Fed Clues

With a historically low interest rate environment for the last five years, ETFs holding preferred stock have been a favorable destination for yield-seeking income investors.
<h3>
	Overview: Preferred Stock</h3>

	A preferred stock is a type of security that offers characteristics of both bonds and equities. Preferred shares fall between common stock and bonds, in that they have an income aspect to them and can also provide capital appreciation.

	In terms of hierarchy, preferred stocks are below corporate bonds and above common stocks. In layman&#39;s terms, the holder of preferred stock would be paid before the holder of common stock, but after corporate bondholders.

	With the Fed looking to raise rates sometime in 2015, now would be a good time to reassess preferred stock investments. As interest rates rise, investors may start to roll out of preferred stock ETFs in search of yield in other asset classes.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/04/5384702/lpl-financial-economist-its-now-very-difficult-for-the-f">LPL Financial Economist: It&#39;s Now &quot;Very Difficult&quot; For The Fed To Raise Rates In June</a></bzrelatedlink>
<h3>
	PowerShares Variable Rate Preferred Portfolio</h3>

	A way for investors to stay in preferred stock ETFs during an environment of rising interest rates is the PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/vrp#NYSE">VRP</a>). The 10-month old ETF has the characteristics of a traditional preferred stock ETF; however, it incorporates &quot;hybrid securities,&quot; which have a floating rate, allowing it to account for changing interest rates.

	As the Fed raises rates, the interest paid by hybrid securities will also increase, a phenomenon often referred to as floating rates.

	VRP is composed of 91 preferred stocks that cover six sectors. The financials make up the majority of the portfolio at 87 percent, with energy coming in at 5 percent. The top holdings include:
<ul>
<li>
		Wachovia Capital Trust III at 3.9 percent</li>
<li>
		Citigroup Capital XIII making up 3.7 percent</li>
<li>
		GMAC Capital Trust I Fixed Rate Floating Rate Trust (NYSE: ALLY-A) coming in at 3.3 percent</li>
</ul>

	VRP has a 30-day SEC yield of 4.82 percent and a yield to maturity of 4.47 percent. The ETF has an expense ratio of 0.50 percent.

	<bzrelatedink>Related Link: <a href="http://www.benzinga.com/pressreleases/15/04/b5388613/colony-capital-inc-announces-preferred-stock-offering">Colony Capital Inc. Announces Preferred Stock Offering</a></bzrelatedink>
<h3>
	iShares U.S. Preferred Stock ETF</h3>

	For comparison, the largest preferred stock ETF in the market is the iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>), which gives investors exposure to a basket U.S. preferred stocks. The ETF is made up of 312 holdings across 15 sectors, with banks at 38 percent and diversified financials at 16 percent being the most heavily weighted sectors.

	The top individual holdings include:
<ul>
<li>
		HSBC Holdings plc (ADR) (NYSE: <a class="ticker" href="/stock/hsbc#NYSE">HSBC</a>) at 2.4 percent</li>
<li>
		GMAC Capital Trust I making up 1.7 percent</li>
<li>
		Barclays PLC (ADR) (NYSE: <a class="ticker" href="/stock/bcs#NYSE">BCS</a>) totaling 1.7 percent as well</li>
</ul>

	PFF has a 30-day SEC yield of 5.48 and an expense ratio of 0.47 percent.

	Image Credit: <a href="http://pixabay.com/en/statistics-transparency-company-706381/">Public Domain</a>

ALLY-A

HSBC

Alternative To Preferred Stock ETFs

February was a volatile month for interest rates and asset classes traditionally linked to machinations in the bond markets. The CBOE Interest Rate 10 Year Note (INDEX: TNX) spiked from a low of 1.67 percent to a high of 2.00 percent last month amid a strong bid for stocks.

	This spike higher in rates led to a selloff in the iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>), Vanguard REIT Index Fund (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>) and even the Utility Select Sector SPDR ETF (Utilities SPDR (ETF)) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>). However, the asset class that shrugged off this macro-economic headwind and continued to new highs is preferred stocks.
<h3>
	What Are Preferred Stocks?</h3>

	Preferred stocks are known as a hybrid instrument that carry qualities of both equity and debt securities. These shares are higher on the capital structure than common stock owners and typically pay a hefty yield, which is where their sensitivity to interest rates is upheld.
<h3>
	iShares U.S. Preferred Stock ETF</h3>

	The iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) is the largest ETF in this space with over $12.7 billion in total assets. PFF invests in a diversified basket of over 300 preferred stocks, which are primarily focused in the financial, banking and real estate sectors.
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	&nbsp;

	PFF has gained 11 percent in total return over the last year and just recently touched new 52-week highs. This ETF also sports a 30-day SEC yield of 5.61 percent and dividends are paid monthly to shareholders.
<h3>
	PowerShares Preferred Portfolio</h3>

	Another strong contender in this category is the PowerShares Preferred Portfolio(ETF) (NYSE: <a class="ticker" href="/stock/pgx#NYSE">PGX</a>). This ETF focuses on a more concentrated mix of 213 preferred stocks, of which 88 percent are financial-based companies. The current yield on PGX is 5.90 percent.

	PFF carries an expense ratio of 0.47 percent, while PGX is slightly higher at 0.50 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/pressreleases/15/03/b5294833/amsurg-declares-quarterly-preferred-stock-dividend">AmSurg Declares Quarterly Preferred Stock Dividend</a></bzrelatedlink>
<h3>
	What Makes Preferred Stock ETFs Unique</h3>

	One of the distinct qualities of preferred stock ETFs is that their returns don&rsquo;t mirror a traditional equity or bond index. PFF, for example, has a beta to the S&amp;P 500 Index (INDEX: SPX) of just 0.24. This may be an attractive quality for income-seekers looking to diversify their portfolio in non-correlated asset classes.

	Disclosure: At the time this article was written, David Fabian and clients of FMD Capital Management owned PFF.

iShares Trust Barclays 20+ Year Treasury Bond Fund

Preferred Stock ETFs Press Higher, Ignore Interest Rate Spike

Income investors are well aware of the benefits of using preferred stocks in their portfolio to generate dividends and capital appreciation. These hybrid instruments have characteristics of both equity and debt in that they pay a fixed coupon but are higher on the capital structure than common stock holders.

	The tailwind from the stock and bond markets in 2014 has been a perfect recipe for preferred stocks to shine. A number of ETFs have taken advantage of this environment.

	The largest fund in this space is the iShares U.S. Preferred Stock ETF (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>), which has over $11 billion in total assets. This ETF holds 330 preferred securities that are primarily weighted towards large banking and financial institutions. Other smaller sectors that are included in PFF include real estate, utilities and telecommunication companies.

	Related Link: <bzrelatedlink><a href="http://www.benzinga.com/etfs/sector-etfs/14/12/5101709/the-best-bond-etf-of-2014">The Best Bond ETF Of 2014</a></bzrelatedlink>

	With just a couple trading days left in the year, PFF has achieved a total return of nearly 14 percent (with dividends included). The current 30-day SEC yield of this ETF is 5.60 percent and dividends are paid monthly to shareholders.
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		While those returns are excellent, the PowerShares Financial Preferred Portfolio (NYSE: <a class="ticker" href="/stock/pgf#NYSE">PGF</a>) has been one of the strongest ETFs in this group with a gain of over 7 percent in 2014. PGF has over $1.4 billion invested in a diversified basket of 86 holdings from a variety of financial industries. This ETF also has a slightly higher yield of 5.93 percent as well.

		Lastly, the Market Vectors ETF Trust (NYSE: <a class="ticker" href="/stock/pfxf#NYSE">PFXF</a>) has capped off 2014 with powerful momentum as well. This unique ETF takes a different spin on the preferred space by excluding financial companies from its index. The end result is a far different basket of securities that focus heavily on REITs, electric utilities and telecom companies.

		PFXF has a yield of 5.92 percent, expense ratio of 0.40 percent and over $200 million in total assets.

		The diversity amongst this group of ETFs makes for the ability to select a broad index or specific niche in this alternative income segment in order to hone in on the best strategy to fit your needs.

		Disclosure: At the time of this writing, the author had a position in PFF.
</div>

PFXF

3 Preferred Stock ETFs Cap Off Strong Year

In a pre-holiday show, <a href="http://video.cnbc.com/gallery/?video=3000334106">CNBC Fast Money's</a> traders shared with the audience trades that they are thankful for.
Stephen Weiss has been long American Airlines Group Inc (NASDAQ: <a class="ticker" href="/stock/aal#NASDAQ">AAL</a>) for a couple of years and he had great return in this name. He believes that the stock is going to keep going higher.
Josh Brown is thankful for a position in iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>). The ETF had a return of 14 percent this year.
Jon Najarian said that it was a great opportunity to get in Michael Kors Holdings Ltd (NYSE: <a class="ticker" href="/stock/kors#NYSE">KORS</a>) at $70. He thinks that it is going to trade up to $80, from its current price of $75.83.

CNBC

Fast Money

KORS

Fast Money Halftime Report Final Trade From November 26

Preferred stock ETFs are an intriguing way to diversify as well as increase the overall yield of a portfolio.

	A <a href="http://www.benzinga.com/topic/preferred-stock">preferred stock</a> provides the income aspect of a <a href="http://www.benzinga.com/topic/fixed-income">fixed income</a> security as well as the growth potential of an <a href="http://www.benzinga.com/topic/equity">equity</a> security.

	The ETFs in the niche asset class have been trading near multi-year highs and they pay dividends well above that of U.S. Treasury bonds.

	Highlighted below is a number of preferred stock ETFs available to investors.
<h3>
	iShares S&amp;P US Preferred Stock Index Fund</h3>

	The iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) consists of 329 publicly traded preferred stocks. The holdings are spread across six countries and 15 sectors. The United States at 76 percent and the United Kingdom at 15 percent represent the most heavily weighted countries. With diversified financials at 35 percent and banks at 27 percent, there is a heavy concentration on the financials.

	The top individual holdings include preferred stocks from:
<ul>
<li>
		HSBC Holdings plc (ADR) (NYSE: <a class="ticker" href="/stock/hsbc#NYSE">HSBC</a>)</li>
<li>
		GMAC Capital Trust I Fixed Rate Floating Rate Trust (NYSE: ALLY-A)</li>
<li>
		Barclays Bank PLC (NYSE: BACR)</li>
</ul>

	The ETF is up 8 percent year to date, not including the 6.9 percent dividend yield. It charges investors an annual expense ratio of 0.47 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/pressreleases/14/10/n4931754/ally-financial-declares-dividends-on-preferred-stock">ALLY Financial Declares Dividends On Preferred Stock</a></bzrelatedlink>
<h3>
	Global X Funds</h3>

	The Global X Funds(NYSE: <a class="ticker" href="/stock/spff#NYSE">SPFF</a>) is made up of 50 of the highest yielding preferred securities in the United States and Canada. The holdings are distributed across six sectors with financials at 75 percent and telecommunications services at 8 percent being the most heavily weighted sectors.

	The top individual holdings include preferred stocks from:
<ul>
<li>
		Wells Fargo &amp; Co (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>)</li>
<li>
		AcelorMittal SA (ADR) (NYSE: <a class="ticker" href="/stock/mt#NYSE">MT</a>)</li>
<li>
		GMAC Capital Trust</li>
</ul>

	The ETF is up 1 percent year to date not including its 7.2 percent dividend yield. The ETF has an annual expense ratio of 0.58 percent.
<h3>
	SPDR Wells Fargo Preferred Stock</h3>

	The SPDR Wells Fargo Prfd Stk ETF (NYSE: <a class="ticker" href="/stock/psk#NYSE">PSK</a>) follows 119 preferred stocks across seven sectors with financials at 76 percent and telecommunication services at 6 percent.

	The top holdings include preferred stocks from:
<ul>
<li>
		PNC Financial Services Group Inc (NYSE: <a class="ticker" href="/stock/pnc#NYSE">PNC</a>)</li>
<li>
		Metlife Inc (NYSE: <a class="ticker" href="/stock/met#NYSE">MET</a>)</li>
<li>
		Goldman Sachs Group Inc (NYSE: <a class="ticker" href="/stock/gs#NYSE">GS</a>)</li>
</ul>

	The ETF is up 13 percent year to date and offers a 5.9 percent dividend yield, while charging a 0.45 percent annual expense ratio.

	Preferred stocks are vehicles that are sensitive to interest rate changes. With an expected hike in interest rates coming from the Fed in the near future, preferred stock prices could face a headwind as the &ldquo;&quot;risk free&quot; rate of U.S. Treasuries will increase and make the dividends paid by preferred stocks less attractive. The future moves of the Fed are not set in stone, however, and in the meantime the high income outweighs a lot of the potential interest rate risk.

ALLY

Here Are A Few Preferred Stock ETFs For Income And Diversity

On <a href="http://video.cnbc.com/gallery/?video=3000321480">CNBC&#39;s Fast Money Halftime Report</a>, Pete Najarain said that he is a buyer of Cirrus Logic, Inc. (NASDAQ: <a class="ticker" href="/stock/crus#NASDAQ">CRUS</a>), but he would only use options. <a href="http://www.benzinga.com/topic/cirrus-logic">Cirrus Logic, Inc.</a> traded 3.58 percent higher.

	Josh Brown likes iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>). He expects to make money on this trade by the end of the year.

	Stephanie Link thinks that American Express Company (NYSE: <a class="ticker" href="/stock/axp#NYSE">AXP</a>) had a very good quarter and that it is a very cheap stock. <a href="http://www.benzinga.com/topic/american-express-company">American Express Company</a> traded 1.80 percent higher.

	Joe Terranova is a buyer of Buckeye Partners, L.P. (NYSE: <a class="ticker" href="/stock/bpl#NYSE">BPL</a>), which gained 1.54 percent.

CRUS

Fast Money Halftime Report Final Trade From October 20

<a href="http://video.cnbc.com/gallery/?video=3000319226">CNBC Fast Money's</a> Pete Najarian said that he is a buyer of Pfizer Inc. (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>). The stock dropped 2.27 percent and closed at $28.47.
Stephen Weiss thinks that Netflix, Inc. (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>) should be bought. <a href="http://www.benzinga.com/topic/netflix">Netflix, Inc.</a> slipped 3.01 percent on Monday.
Josh Brown likes iShares S&amp;P US Pref Stock Idx Fnd (ETF) (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) because it held well during Monday's trading session. The ETF lost 0.18 percent and closed at $39.14.
Mike Murphy believes that International Paper Co (NYSE: <a class="ticker" href="/stock/ip#NYSE">IP</a>) is a buy. <a href="http://www.benzinga.com/topic/international-paper">International Paper Co</a> slipped 1.47 percent on Monday.