ETF selected: Invesco Preferred Shares UCITS ETF Dist

What's in this ETF?

In this ETF, you'll find mostly preferred shares of banking and financial institutions (76.6% of the investment) such as JPMorgan Chase, Wells Fargo and Bank of America.

The remainder is made up of industrial companies (11.5%) and energy and water treatment companies (10.1%). Investment is almost exclusively in the USA (95.3%).

The ETF, which is fairly modest in size ($173.3 million in assets under management), is passively managed, meaning that it replicates an index. Dividends are distributed quarterly.

What are its advantages?

  • Preferred shares provide regular, stable income that is known in advance.
  • The ETF is also listed on Euronext Milan in Euro, which excludes the Dollar exchange rate risk.

Negative points

  • AUM is rather low. This is not a negative point in itself, but it does mean that you need to keep an eye on liquidity when trading.
  • Performance since Covid has been mediocre, as a fixed-rate investment cannot keep pace with soaring interest rates. Preference shares could regain their appeal once interest rates start to fall.
  • Fees are fairly high (0.50%).
  • The ETF is highly concentrated in banking and financial stocks. As a result, diversification is fairly limited.

ETF identity card:

ISIN code: IE00BDVJF675

Ticker: PRFD

Fees: 0.50