Best PowerShares ETFs: Variable Rate Preferred Portfolio (VRP)
What makes the PowerShares Variable Rate Preferred Portfolio (NYSEARCA:VRP) stand out among other funds is that it helps income investors stay ahead with preferreds even in the face of rising interest rates.
Although they are called “preferred stocks,” preferreds have bond-like qualities that make the asset class potentially vulnerable to higher and escalating interest rates. VRP is designed to reduce investors’ exposure to the impact of higher rates on preferred stocks; but you do have to pay for that protection, as the VRP’s 30-day SEC yield of 4.5% is lower than the PGX’s current yield closer to 5.6%.
Still, data suggests that investors are warming up to VRP. Over the past year, investors have allocated nearly $960 million in new money to the fund — a total exceeded by just three other PowerShares ETFs over that period.