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Global X Adds New U.S. Preferred Stock ETF

tlydon@globaltrend.com (Tom Lydon)

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.