PFFD vs PRFD

PFFDAGlobal X U.S. Preferred ETF

PRFDCPIMCO Preferred And Capital Securities Active Exchange-Traded Fund

In short

PFFD Preferred stock is a corner where fund fees usually run rich. PFFD turned up in 2017 charging 0.23% for a broad basket of U.S. preferreds, and it has paid monthly ever since. Cheap, plain-vanilla exposure to an income niche.

PRFD PIMCO points its credit desk at preferreds, including the regulatory-capital paper banks issue to institutions rather than only retail-listed shares. Active, monthly-paying, running since 2023.

Stated mandate

PFFD PFFD seeks to track the performance of the ICE BofA Diversified Core U.S. Preferred Securities Index before fees and expenses. It provides broad exposure to U.S. preferred stocks.

PRFD The Fund seeks total return with a secondary objective of income generation. It normally invests at least 80% of its assets in diversified preferred and capital securities, including regulatory-capital instruments issued by U.S. and non-U.S. financial institutions.

Why people hold it

• PFFD Charges 0.23% a year, which Global X notes is less than half the average fee among competing preferred funds.globalxetfs.com
• Holds roughly 220 U.S. preferreds tracking the ICE BofA Diversified Core index. Benchmark-like exposure, not a manager's shortlist.globalxetfs.com
• Pays distributions monthly, and has done so every year since its 2017 launch.globalxetfs.com
• A multi-billion-dollar fund that trades actively, so entering and exiting is rarely the hard part.

• PRFD At least 80% of assets go to preferred and capital securities, including regulatory-capital instruments from US and non-US financial institutions. Wider ground than US-listed preferreds alone.
• Actively run rather than index-tracking: managers choose the issues, chasing total return with income as the stated secondary objective.
• Pays monthly and spreads exposure across a couple hundred positions instead of a short list of jumbo bank issues.
• Standard 1940 Act fund wrapper, so shareholders get 1099 tax reporting rather than a partnership K-1.

Worth knowing

• PFFD Preferreds come mostly from banks and insurers, and the index has been concentrated in banking, so the ride tracks financial-sector health.globalxetfs.com
• These securities behave more like long bonds than stocks: interest rate moves push prices around, as the fund's risk disclosures describe.globalxetfs.com
• Monthly does not mean fixed. The payout size floats with what the portfolio collects.globalxetfs.com

• PRFD Active management costs: the 0.88% expense ratio sits above index rivals in the same aisle, such as EVPF at 0.20% and PSK at 0.45%.
• Trades lightly next to the category's household names, so bid-ask spreads can be wider, particularly in stressed markets.
• The fund discloses that distributions may include return of capital, meaning part of a monthly payout can be capital returned rather than income earned.

Full PFFD profile⁠

Full PRFD profile⁠