2024-03-12 00:17:35 ET
Summary
- VanEck Preferred Securities ex Financials ETF returns have lagged riskier common stock alternatives over the past year.
- 61.74% of ETF assets are allocated to sectors such as REITs, Utilities, and Telecoms that traditionally employ significant amounts of debt.
- The indebted preferred issuers in PFXF's portfolio will benefit from lower interest rates by the Federal Reserve.
- The monthly distribution profile boosts the Fund's appeal to income-oriented investors, and the ETF may benefit from the return of the search for yield trade.
- Exposure to long-dated preferred securities and a potential delay in Federal Reserve rate cuts are key risks for PFXF.
Introduction
The VanEck Preferred Securities ex Financials ETF ( PFXF ) has delivered a 6.71% return over the past year, lagging riskier alternatives such as common stocks:
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For further details see:
PFXF: Levered Preferred Issuers Set To Benefit From Lower Interest Rates