Global X Variable Rate Preferred ETF

PFFV

Börsenwert 334 Mio. $

The Global X Variable Rate Preferred ETF (PFFV) offers a higher yield (7.2% SEC, 8.5% TTM) and lower expense ratio (0.25%) than VRP, making it attractive for income-focused investors. The Invesco Variable Rate Preferred ETF (VRP) provides greater diversification (365 holdings) and higher portfolio quality, with 84% investment grade issuers and less exposure to mREITs. PFFV's elevated yield is driven by a nearly 20% allocation to mortgage REIT preferreds, introducing higher risk and greater price downside in volatile markets.

Global X Variable Rate Preferred ETF (PFFV) offers an impressive ~7% SEC yield, with over 75% of distributions as qualified dividends, favoring high-tax-bracket investors. PFFV's portfolio is heavily concentrated in financials (~90%) and mid-quality credit, with ~30% unrated holdings and only ~35% rated BBB or above. Interest-rate uncertainty and low-duration exposure make PFFV a cautious buy for credit-risk-seeking investors seeking yield without significant duration risk.

Historically, PFFV has had worse returns than alternative investments with safer assets. A lower Fed Funds Rate will lead to lower dividends for PFFV. There is a good case that it will be cut, but no reason to think it will increase. Q1 is often a time of weakness for Preferred Shares.

The Global X Variable Rate Preferred ETF offers a 7% yield from 58 US-listed variable rate preferred securities. PFFV is heavily concentrated in financials (91.3%) and carries significant credit risk, with only 35% investment grade holdings. PFFV has underperformed high-yield bond benchmark HYG since inception, with asset value erosion and decent dividend growth.

Global X Variable Rate Preferred ETF invests in variable-rate preferred stocks, primarily in the financial sector, offering exposure to fixed-to-floating, resettable, and floor rate instruments. The ETF has a low expense ratio of 0.25% and has delivered stable 3-year returns of around 4.35%, with average credit quality between BBB- and BB+. Fixed-to-floating stocks below par offer the highest yields, while resettable and floor rate holdings provide diversified income streams and credit profiles.

The fund invests primarily in variable-rate preferred stocks, including fixed-to-floating, resettable, and floor-rate instruments, with a strong emphasis on the financial sector. With a low expense ratio of 0.25% and a three-year NAV return of 4.26%, PFFV provides cost-efficient exposure to variable-rate preferreds. The fund is composed of 45% fixed-to-floating, 20% floor-rate, and 35% resettable preferred stocks, split between issues trading above and below par.

Global X Variable Rate Preferred ETF offers a diversified portfolio of U.S. variable rate preferred stocks, primarily in the financial sector, with a 7.33% current yield. PFFV's holdings include fixed-to-floating, resettable, and floor rate stocks, with an average credit rating of Baa3, providing stable income and potential for appreciation. Investing in PFFV means exposure to a mix of fixed-to-floating, floor rate, and resettable stocks, offering varied yields and credit ratings for diversified risk management.

Wall Street experienced a bloodbath on March 10, 2025 as the selling pressures that weighed on U.S. stocks last week continued. The Nasdaq slumped 4% on the day, marking its biggest one-day loss since September 2022.

PFFF is a preferred shares index ETF with a compelling risk-return profile. PFFF's current 7.2% dividend yield and performance track-record are both better than average. Credit risk is only moderate, with the fund almost evenly divided between BBB and BB preferreds.

Global X Variable Rate Preferred ETF has a 7.23% SEC yield and holds about 50 US-listed preferred stocks with variable rates. PFFV is concentrated in the top issuers, especially in financial companies. The Fund price return is concerning, yet the 2-year distribution growth looks good.