PGX - PGX: Rising Rates Are Bad News For Preferred Equities

• Long-term rates have been skyrocketing and the Treasury bond market crashing.
• Investors should pay attention to the bond market crash because it may proceed to another crash in risk assets such as stocks, preferred equities, and junk bonds.
• Due to their convexity, preferred equities can decline substantially given an increase in inflation and long-term interest rates.
• Preferred equity ETFs such as PGX carry immense exposure to banks which are particularly exposed to the ongoing situation due to their high leverage and Treasury assets.

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