PFFD vs PSK

PFFDAGlobal X U.S. Preferred ETF

PSKBState Street SPDR ICE Preferred Securities ETF

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.

PSK Most preferred funds take the market as it comes. PSK's index counts only investment-grade-rated, $25-par preferreds, a quality filter written into the rules. Running since 2009, paying monthly.

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.

PSK The fund seeks to track the total return of the ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index before fees and expenses. Its mandate covers non-convertible preferred securities meeting specified size, listing, currency, rating, and liquidity requirements.

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.

• PSK Index rules admit only non-convertible preferreds rated investment grade, at $25 par with $250M minimum size. That screen is written in, not a manager's call.ssga.com
• 0.45% a year, a touch under the typical fee in a preferred category where costs tend to run high.
• Trading since 2009 under State Street, with monthly distributions and roughly 160 issues in the book.
• Sits in the upper half of its preferred-ETF peer group in our review, backed by a long-running fund at a large, established shop.

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

• PSK Cheaper shelf-mates exist: PFFV runs 0.25% and EVPF 0.20%, though each slices the preferred market its own way.
• Preferreds sit low in the capital stack and move with both rates and credit, so price swings run wider than a plain bond fund's.
• A mid-sized, moderately traded fund rather than one of the category's household-name giants.

Full PFFD profile⁠

Full PSK profile⁠