PREF - BofA initiates coverage on 11 preferred ETFs

2023-06-06 10:36:28 ET

Bank of America introduced coverage on 11 exchange traded funds with positive views. The group consists of preferred ETFs, which focus on hybrid securities that have some characteristics of both stocks and bonds.

The bank outlined four reasons they like preferred ETFs. The first was the fact that yields in the group are the highest across bond ETFs. Secondly, historical risk-adjusted returns are strong. Thirdly, BofA believes dividends are more secure for these securities than with common stock. Finally, qualified dividend income offers tax advantages.

See below a list of BofA’s preferred ETF ratings model along with the fund’s year-to-date price action:

BofA’s Top-Rated Funds

• Global X US Preferred ETF ( NYSEARCA: PFFD ) +0.2% .
• iShares Preferred & Income Securities ETF ( NASDAQ: PFF ) +0.5% .
• VanEck Preferred Securities ex-Financials ETF ( NYSEARCA: PFXF ) +3.2% .

BofA’s Neutral-Rated Funds

• Invesco Preferred ETF ( NYSEARCA: PGX ) +1.7% .
• SPDR ICE Preferred Securities ETF ( PSK ) +2% .
• Invesco Financial Preferred ETF ( PGF ) +1% .
• Principal Spectrum Preferred Securities Active ETF ( PREF ) -2.1% .
• Invesco Variable Rate Preferred ETF ( VRP ) -0.4% .

BofA’s Bottom-Rated Funds

1. Global X SuperIncome Preferred ETF ( SPFF ) -5%.
2. First Trust Institutional Preferred Securities & Income ETF ( FPEI ) -5.5% .
3. First Trust Preferred Securities and Income ETF ( FPE ) -5.4% .

For further details see: