FXED vs PFF

FXEDFSound Enhanced Fixed Income ETF

PFFAiShares Preferred and Income Securities ETF

In short

FXED An actively managed income portfolio parked in an aisle of index preferred trackers. Sound's managers hand-pick corporate bonds, high yield, BDCs and REITs instead of following a benchmark, pay monthly, and charge 1.89% a year for the work.

PFF Preferred stock is a clumsy market to shop one issue at a time. PFF, running since 2007, bundles roughly 500 US dollar preferreds and hybrids into a single heavily traded ticker and pays out monthly.

Stated mandate

FXED The Fund seeks current income while also offering the possibility of capital appreciation.

PFF The fund seeks to track an index of U.S. dollar-denominated preferred and hybrid securities, providing exposure to preferred stock and subordinated debt with an income-oriented mandate.

Why people hold it

• FXED Go-anywhere income mandate: investment grade and high yield corporate bonds, BDCs, REITs and sovereign debt ETFs, not one index sleeve of bank preferreds.soundincomestrategies.comsec.gov
• Income comes first by design: the stated objective is current income, with capital appreciation only a possibility, and the fund pays monthly.
• Run since its 2020 launch by Sound Income Strategies, an RIA built around income portfolios, with security picking done by humans rather than an index rulebook.soundincomestrategies.comsec.gov

• PFF One ticker buys roughly 500 US dollar preferreds and hybrids tracking the ICE Exchange-Listed Preferred & Hybrid Securities Index, a corner most investors can't assemble issue by issue.
• Distributions land monthly rather than quarterly, a steadier rhythm for anyone spending the income.
• A multi-billion-dollar fund that trades actively, so getting in and out is rarely the hard part.
• Live since 2007, through the financial crisis and several rate cycles, with the same income-oriented mandate from a large index shop.

Worth knowing

• FXED Cost is the headline trade-off: 1.89% a year, above the category median, against index peers like PFFD at 0.23% and PFF at 0.45%. Active calls have to clear that hurdle.
• A small, thinly traded fund, so spreads can be wide and larger orders may move the price.
• No index to check it against: results ride on the manager's security selection, and our review places it toward the back of its preferred-income peer group.sec.gov

• PFF 0.45% a year is the going rate in this niche (the peer median), but it's many times what broad stock index trackers like VT charge.
• Preferreds and subordinated debt are hybrids: they rank below an issuer's senior bonds, so this trades on credit and rate conditions more than on earnings growth.
• The mandate is US dollar issuers only, so there's no international preferred exposure here.

Full FXED profile⁠

Full PFF profile⁠