ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Thematic Investing Channel
  2. Preferred Stock Dividend Exposure Can Outpace Inflation
Thematic Investing Channel
Share

Preferred Stock Dividend Exposure Can Outpace Inflation

Ben HernandezJan 20, 2022
2022-01-20

With consumer prices continuing to push higher, inflationary pressures are keeping fixed income investors on their toes, but there are options such as preferred stock dividend exposure.

Inflation can add a large dose of worry to a fixed income investor’s portfolio, eroding income over time. That becomes especially disconcerting if inflation becomes more persistent instead of transitory.

Investors have a wide array of options when it comes to trying to outpace inflation, which can include adding precious metals or even digital assets as cryptocurrencies start to gain more popularity amongst investors. Another way is to try and get the highest yield possible, but that also involves taking on more credit risk.

Yields outside the U.S. can also be an option, but with the pandemic in tow, it also poses a risk to global markets. Another option is to strategically maintain fixed income exposure in the U.S. via dividends from preferred stock.

1 Dividend ETF to Prefer

Getting this type of preferred stock exposure is available with the Global X U.S. Preferred ETF (PFFD A). The fund seeks to provide investment results that correspond generally to the price and yield performance of the ICE BofA Diversified Core U.S. Preferred Securities Index, which is designed to track the broad-based performance of the U.S. preferred securities market.

“Preferred stock is often analyzed alongside corporate & high yield bonds because of its yield-focused characteristics and fixed income-like behavior,” Global X research notes. “Preferreds sit junior on the capital structure to traditional bonds, and trade on an exchange offering additional liquidity.”

“For portfolio construction purposes, we believe they should be considered alongside corporate debt, high yield, and other income-generating asset classes like emerging market bonds and senior loans as a source of potential income,” Global X adds. “Particularly when compared to corporate debt, we believe now may be the time to rotate money away from the more traditional portions of the fixed income market and into preferreds.”

Overall, PFFD offers investors:

  • High income potential: PFFD invests in a broad basket of preferred stock in the U.S., an asset class that has historically offered high yield potential.
  • Low expense ratio: PFFD’s expense ratio of 0.23% is less than half the competitor average.
  • Monthly distributions: PFFD makes distributions on a monthly basis.

For more news, information, and strategy, visit the Thematic Investing Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X