VanEck Preferred Securities ex Financials ETF

PFXF

Market cap $2.21B

If you're looking for monthly dividends with high yields, there are more ways to derive that income without chasing significant risk.

Many investors are looking to reduce equity volatility while adding more non-Treasury income to their portfolios. In this environment, preferred stocks and the related ETFs may be valid considerations.

Many don't realize a hidden tech bloodbath is going on, especially as people's attention is on oil prices and the bigger fish in the market.

VanEck Preferred Securities ex Financials ETF offers preferred stock exposure without bank sector risk. That's appealing amid current financial sector uncertainties. PFXF has outperformed PFF since 2020, but its portfolio is concentrated in individual issuers, like Boeing, Albemarle, and Strategy, introducing idiosyncratic credit risk. While PFXF's 6.87% dividend yield is attractive, concentrated positions in volatile or speculative credits may erode NAV over time.

VanEck Preferred Securities ex Financials ETF offers exposure to non-financial preferreds with a competitive 6.78% yield and monthly distributions. PFXF's exclusion of financials, high duration, and significant issuer concentration, especially Boeing, make it sensitive to interest rates and credit spreads. The fund is attractive when long Treasury yields are high and S&P 500 earnings yield is compressed, but widening credit spreads could pressure prices, especially for lower-rated holdings.

Preferred securities offer income potential above bonds and lower volatility than equities. Understanding sector differences helps investors position preferreds within diversified portfolios.

Today's market environment is pushing investors to look beyond traditional fixed income for higher yield. VanEck's income-focused ETFs provide access across asset classes.

Headline yield shows income potential, but taxes reduce what you keep. Equity investors should focus on after-tax yield.

I present a 6-ETF retirement portfolio targeting a 5.7% yield, balancing income, safety, and modest growth. SCHD anchors the portfolio at 35% for high-quality U.S. dividend growth, complemented by DIVO and JEPQ for enhanced and tech-driven income. International, preferred equity, and midstream exposure via IDV, PFXF, and AMLP add diversification and yield, with flexible allocations to suit income needs.

VanEck Preferred Securities ex Financials ETF maintains a high 67.3% allocation to securities maturing in 30 years or more. This should provide a tailwind for returns in 2026 should U.S. 30-year yields decline, driven by the potential conclusion of Fed policy normalization. U.S. GDP growth is projected to accelerate in 2026, indicating a manageable credit risk environment for non-investment grade securities.