Income ETFs – iShares U.S. Preferred Stock ETF (PFF)
The last income ETF is one of my favorites, and it’s one that I’ve written about before.
The iShares U.S. Preferred Stock ETF (PFF) offers a diversified group of stock-bond “hybrids” known as preferred shares. I love preferred stock because it has a higher place in the capital stack than common shares of a stock. If the company gets into trouble, you have a greater chance of coming out whole than if you hold the common, which is often wiped out. Also, common stock dividends must be suspended before preferred stock.
Preferred stock tends to trade in a very tight range like bonds do, yet provide substantial dividend yields.
This income ETF is skewed towards very solvent financials, and yields 6.5%. Expenses run at 0.48%.
As of this writing, Lawrence Meyers was long PFF. He is president of Asymmetrical Media Strategies, a crisis PR firm, and PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at firstname.lastname@example.org and follow his tweets at @ichabodscranium.