PGX ETF: Too Many Red Flags
We think the Invesco Preferred ETF's duration of 9.47 years is concerning in today's volatile interest rate environment, making it less desirable for risk-averse investors. The ETF's 70%+ concentration in financials introduces sector risk, especially given the current economic uncertainty and potential for cyclical reversion. Spread and discount rate risks have entered the building, meaning preferred shares a probably worth cherry-picking.
PGX: Nothing To Like Here, But We Have An Alternative
PGX's passive structure and retail investors' lack of effort lead to overvaluations; alternatives can outperform PGX with better yields and credit ratings. PGX invests in fixed-rate preferred stocks, baby bonds, and securities above par, but suffers from high management fees and suboptimal trading practices. Our alternatives offer higher yields and better credit ratings without management fees, providing superior returns compared to PGX's portfolio.
2 Preferred Stock ETFs for 2025
Preferred stock ETFs may be a compelling opportunity for 2025. Tailwinds for preferred ETFs this year include deregulation, stable interest rates, and a steepening yield curve.
The Investor's Guide to Preferred Stock ETFs
Preferred stock ETFs may be a compelling opportunity for income investors. The Invesco Preferred ETF (PGX) is designed for investors looking for both income and capital appreciation.
PGX: 6% Yield And A Decay Story
Invesco Preferred ETF is a high-yield fund investing in fixed rate preferred securities with at least a B3 rating. The PGX ETF yield is close to 6% and 67% of the portfolio has an investment grade. PGX price and distributions went down by about 40% in 15 years, while cumulative inflation was over 50%.
