Expanding on its preferred stock exchange traded fund line up, Global X is launching another fund that tracks preferred shares but will focus on the U.S. markets.
On July 17, the Global X SuperIncome Preferred ETF (SPFF) will begin trading. SPFF will try to reflect the performance of the S&P Enhanced Yield North American Preferred Stock Index, which follows the highest yielding preferred securities in the U.S. and Canada. SPFF has an expense ratio of 0.58%.
The ETF has 47 holdings, and the top holdings include Credit Suisse 5.3%, American International 3.9%, Aegon NV 3.7%, Wells Fargo Capital 3.6% and Prudential Financial 3.5%.
Sub-sector allocations include financials 74%, insurance 8.4%, real estate 6.1%, energy 4.3%, industrials 2.7%, basic materials 2.4% and telecom 2.1%.
Preferred stocks have a higher claim on assets and earnings than common stocks and dividends are paid to preferred shares before common stocks. However, preferred shareholders do not have voting rights and have a lower potential for capital appreciation. [ETF Chart of the Day: Preferred Shares]
Global X also offers a preferred stock ETF that provides exposure to Canadian preferred shares: Global X Canada Preferred ETF (CNPF) , which has a 3.91% yield.
Other preferred stock ETFs include:
- iShares S&P US Preferred Stock Index (PFF) : 5.89% yield.
- PowerShares Preferred Portfolio (PGX) : 6.44% yield.
- PowerShares Financial Preferred Portfolio (PGF) : 6.72% yield.
- SPDR Wells Fargo Preferred Stock ETF (PSK) : 6.3% yield.
- iShares &P International Preferred Stock Index Fund (IPFF) : 30-day SEC yield 3.25%.
For more information on new fund launches, visit our new ETFs category.
Max Chen contributed to this article.