PFFV vs PRFD

PFFVBGlobal X Variable Rate Preferred ETF

PRFDCPIMCO Preferred And Capital Securities Active Exchange-Traded Fund

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.

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

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.

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

• 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.

• 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

• 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.

• 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 PFFV profile⁠

Full PRFD profile⁠