JPT - Preferred Stock Closed-End Funds: Reviewing The Category
Preferred Stock CEFs
Preferred stock is, in my view, an important asset class for an income portfolio. It has characteristics of common stock and of bonds. As such, it tends to enhance income from fixed-income asset classes and moderate volatility from equity asset classes. But for the year, preferred stock has struggled, along with all interest-rate sensitive assets. Such downturns often bring buying opportunities.
To illustrate how the year has played out for most interest-rate sensitive asses, let's compare the largest preferred stock ETF, iShares U.S. Preferred Stock ETF (PFF) with index ETFs