Principal Spectrum Preferred Securities Active ETF (PREF)
ARCA ARCA Primary Summary
PREF Chart
PREF: Preferred ETF With Low Volatility, Average Return And A Lot Of Banks
Principal Spectrum Preferred Securities Active ETF is an income-oriented ETF focusing on preferred securities, primarily from financial companies. The total return of PREF keeps pace with inflation, but long-term shareholders have seen both their capital and income going down. PREF has lower volatility compared to peers but lags in yield, total return, and risk-adjusted performance, making VRP and PFXF more attractive.
PREF: Active Preferred Equity Fund That Does Not Impress
PREF is an actively managed ETF investing at least 80% in preferred securities, primarily from financial institutions, with 91% of assets rated BBB. The fund is heavily concentrated in the financial sector, with 55% exposure to banks and 16% to insurance, posing risks during banking crises. PREF has not consistently outperformed its passive peer, PFF, despite active management, raising questions about its value proposition.
Principal Spectrum Preferred Securities Active ETF Dividends
| PREF 1 month ago Paid | Monthly | $0.07 Per Share |
| PREF 2 months ago Paid | Monthly | $0.07 Per Share |
| PREF 3 months ago Paid | Monthly | $0.07 Per Share |
| PREF 4 months ago Paid | Monthly | $0.08 Per Share |
| PREF 5 months ago Paid | Monthly | $0.07 Per Share |
Principal Spectrum Preferred Securities Active ETF Earnings
| PREF 1 month ago Paid | Monthly | $0.07 Per Share |
| PREF 2 months ago Paid | Monthly | $0.07 Per Share |
| PREF 3 months ago Paid | Monthly | $0.07 Per Share |
| PREF 4 months ago Paid | Monthly | $0.08 Per Share |
| PREF 5 months ago Paid | Monthly | $0.07 Per Share |
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Principal Spectrum Preferred Securities Active ETF Profile
| ARCA Exchange | US Country |
Overview
The described entity operates as an investment fund, primarily focusing on allocating its assets in preferred securities. It consistently adheres to a strategy of investing a minimum of 80% of its net assets, in addition to any borrowed amounts for investment purposes, into preferred securities at the time of acquisition. These securities encompass a broad range of investment vehicles including preferred stocks, specific depositary receipts, and various formats of junior subordinated debt, which characteristically offer the option to defer interest payments without triggering an immediate default scenario. Notably, the fund demonstrates a concentrated investment approach by dedicating more than 25% of its net assets towards securities within one or several industries located in the financial services sector, indicating a strategic focus on the financial industry's offerings.
Products and Services
- Preferred Stock:
Preferred stock constitutes a significant portion of the fund's investment portfolio. This class of stock typically provides shareholders with a fixed dividend, payable before any dividends are paid to common stockholders, and may offer preferential treatment in asset liquidation. This type of investment appeals to those seeking steady income streams and a higher claim on assets than common shareholders.
- Depositary Receipts:
Among its investment instruments, the fund also focuses on certain depositary receipts. Depositary receipts represent shares in foreign companies, allowing for easy investment in foreign stock markets without the complications of dealing with foreign securities laws and the challenges of direct investment in a foreign market. This diversifies the investment portfolio and exposes investors to global markets.
- Junior Subordinated Debt:
The fund invests in various types of junior subordinated debt, which generally includes the capability for issuers to defer the payment of interest without precipitating an immediate default situation. Junior subordinated debt is ranked below other forms of debt, meaning in the event of liquidation, other debtholders are paid first. This type of debt often carries higher yields due to its increased risk, making it an attractive option for investors seeking higher returns in their income portfolios.
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