PFF?

[catdog]

I am considering a preferred stock fund.  I am looking for total return.  Here are my concerns:

1- should I carefully choose a fund that is not mostly financials

2-How will falling rates affect preferred stocks

3-Do you think higher ER's are worth it with preferreds>

Thanks for all opinions 

Catdog

[yogibearbull]

Most preferreds are from banks, and almost all of those are noncumulative - so that banks count them as capital.

But there is a preferred ETF ex-financials, PFXF. It compares well with PFF.

Be aware that preferreds are very long-term-debt, often without maturities. So, they have high rate sensitivity.

stockcharts.com/h-perf/ui?s=PFXF&compare=PFF&id=p86554531556

[Capital]

catdog , yogibearbull has, as always, given sage advice.
FWIW - I have bought some Bank Preferred stocks that are non-cumulative.
My rules of thumb is that the Bank must be paying a dividend on its common and must have a 2-1 coverage on the common dividend.
I have owned PFF in the past. Although I have never owned PFXF I am glad to know of its existence and may use it in the future.
My preference is to buy at a discount to issue price and never at a premium. 
Good luck.

[catdog]

And I believe it is at a 14% discount right now capital.

catdog

[catdog]

well that was wrong. .04% discount

catdog

[yakers]

I have a small holding of PFXF in tIRA , underwater 11.8%, bought in 2016 & 2021. I would sell it but there is no tax loss harvesting in an IRA and it is part of my preferred part of overall fixed income portfolio and I am up 59% overall in that segment, don't plan to sell anything ever, just generate dividends to use for RMDs/QCDs.

[Chahta]

Jan 21, 2024 17:55:24 GMT catdog said:

I am considering a preferred stock fund.  I am looking for total return.  Here are my concerns:

1- should I carefully choose a fund that is not mostly financials

2-How will falling rates affect preferred stocks

3-Do you think higher ER's are worth it with preferreds>

Thanks for all opinions 

Catdog

I have never dealt in preferreds. Since you are looking for TR, why choose that type of fund?

[catdog]

Chata,

Thanks for the question. I am assuming the yield cannot stay this high as rates eventually fall. If that is true I was hoping for a little capital appreciation.
I did buy it mostly for income.

catdog