PFFV - VRP: Good Yield Over Time

2024-02-09 10:32:56 ET

Summary

• Variable rate preferred stocks offer adjustable dividends tied to benchmark interest rates, making them appealing during rising interest rate periods.
• Variable rate preferreds come with risks, such as fluctuating dividends and potential decreases in value with rising interest rates.
• Invesco Variable Rate Preferred ETF offers exposure to variable rate preferred securities and has a lower volatility profile compared to similar ETFs.

Variable rate preferred stock funds tend to not get much love from investors because they don't fit neatly into a stock and bond traditional framework for asset allocation, but they are certainly worth considering broadly. Variable rate preferred stocks, often referred to as floating-rate preferreds, are a type of preferred security that differs from traditional fixed-rate preferred stocks by offering dividends that adjust over time....

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