Many investors can acknowledge the value of adding current income but may not want or need further fixed income exposure. Especially as the interest rate picture continues to shift, investors may want to stay more toward the equities side of things. The quality preferred ETF QPFF, then, may present a strong option to watch with its exposure to preferred stocks.
See more: Midcaps to Lead the Way in 2025? Lean Into Value
Why look to preferreds? While a soft landing appears far more likely now than a year ago, it is not locked in. Rate cuts have provided a helpful boost, but inflation remains noticeably stubborn. Should the rate cut process take a pause, that may spook markets and deter the relief needed in key sectors. In tech, for example, AI valuations have kept the space moving forward. But should cuts fail to materialize, questions may be asked about revenue from AI projects.
A Quality Preferred ETF Approach to 2025
The quality preferred ETF QPFF can help by combining equities and fixed income-esque securities in one place. The American Century Quality Preferred ETF (QPFF ), which will hit its important three-year ETF milestone in February, charges 33 basis points for its services. The strategy actively invests in U.S. and non-U.S. preferred securities.
It draws opportunities from the ICE-Exchange-listed Preferred & Hybrid Securities Index. The quality preferred ETF screens using fundamental and technical metrics like credit risk, size, liquidity, and momentum. QPFF targets financials sector firms and looks for quality opportunities therein.
Together, that approach has helped the fund return 20.5% over the last one-year period, per American Century Investments. It offered a 7% return as of October 31, as well. Together, that performance, alongside its current income, could make it appealing not only for older clients, but younger ones too. Looking forward, it could make for a solid satellite addition to portfolios in a potentially positive but uncertain 2025.
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