PFFV vs PREF

PFFVBGlobal X Variable Rate Preferred ETF

PREFBPrincipal Spectrum Preferred Securities Active ETF

In short

PFFV Most preferred funds hand you a fixed coupon and a lot of rate sensitivity. PFFV screens for variable-rate preferreds only, so coupons reset off short-term benchmarks instead of standing still, at 0.25% a year with monthly payouts.

PREF Most preferred ETFs shop the $25-par retail aisle. PREF goes where the institutions trade: $1,000-par preferreds, hand-picked by an active team since 2017, with income paid out monthly.

Stated mandate

PFFV The fund seeks to provide investment results generally corresponding to the price and yield performance of the ICE U.S. Variable Rate Preferred Securities Index before fees and expenses.

PREF The fund is actively managed and does not seek to track a specified index.

Why people hold it

• PFFV Costs 0.25% a year, about half the typical preferred ETF fee and a fraction of what an actively run peer like FPE charges (0.83%).
• The whole point: an index of variable-rate preferreds, whose coupons reset off short-term benchmarks rather than locking in for the life of the security.
• Passive and plain-vanilla. Roughly 60 US preferred issues picked by published index rules, with income paid out monthly.
• Stacks up as one of the stronger builds in a crowded preferred-ETF field, mostly on cost and a clean, rules-based mandate.

• PREF Targets $1,000 par preferreds, the institutional-lot corner most preferred funds skip, with a mandate built around current income rather than index replication.principalam.com
• No benchmark to hug. Managers hold roughly 160 positions in preferred stock and junior subordinated debt from US and non-US issuers, and can shift as the market shifts.principalam.com
• Income lands monthly, not quarterly.
• Trading since 2017 and now a multi-billion-dollar fund: a seasoned strategy with a real book of assets behind it, not a launch-week experiment.

Worth knowing

• PFFV Preferred issuance skews to banks and insurers, so this is concentrated financials credit in bond clothing, spread across only about 60 positions.
• Resets cut both ways. The same floating mechanism that lifts coupons when short-term rates climb also drags them down when rates fall.
• Moderately traded and mid-sized rather than a heavyweight, so bid-ask spreads matter more here than in the largest preferred funds.

• PREF Active pricing: 0.55% a year against a 0.44% peer-group median, and broad financials index funds like VFH and XLF charge under a tenth of a percent for a very different job.
• There is no index to check the work against, so outcomes ride on the team's security selection.
• Preferreds rank below bonds in the capital stack and the issuers skew financial, so stress in banks and insurers shows up here.principalam.com

Full PFFV profile⁠

Full PREF profile⁠