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What is a preferred stock ETF?

Preferred Stock ETFs invest in preferred stocks, which is a class of ownership in a corporation that has a higher claim on assets and earnings than common stocks. These securities make dividend payments, which are set at issuance, along with the par value of the preferred stock. Preferred shares are considered hybrid debt/equity instruments.

What is the best-performing preferred stock ETF?

The best-performing preferred stock ETF, based on performance over the past year, is the Virtus InfraCap U.S. Preferred Stock ETF ( PFFA ). We examine the top three preferred stock ETFs below. All numbers below are as of Sept. 1, 2022, except where indicated.

Should you invest in Preferred Stock ETFs?

Investors who want to buy preferred stocks may look to exchange-traded funds (ETFs) that specialize in this type of equity. Through preferred stock ETFs, investors receive income from multiple stocks while also enjoying the comfort of having their investment spread across several companies, thereby mitigating risk.

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