5 of the Best Preferred Stock ETFs for High and Stable Dividends

5 of the Best Preferred Stock ETFs for High and Stable Dividends

Investors seeking a blend of income stability and higher yields than traditional bonds often turn to preferred stocks. These hybrid securities offer fixed dividends like bonds while retaining some characteristics of common stocks. One of the easiest ways to gain exposure to preferred stocks is through exchange-traded funds (ETFs), which provide diversification and liquidity.

Below, we highlight five of the best preferred stock ETFs that offer high and stable dividends, making them attractive for income-focused investors.

1. iShares Preferred and Income Securities ETF (PFF)

• Dividend Yield: ~6.5%
• Expense Ratio: 0.46%
• Assets Under Management (AUM): ~$13 billion

PFF is the largest and most liquid preferred stock ETF, tracking the ICE Exchange-Listed Preferred & Hybrid Securities Index. The fund holds a diverse portfolio of preferred shares, primarily from financial institutions, utilities, and real estate companies. With its strong dividend yield and deep liquidity, PFF is a staple for income-focused investors.

2. Invesco Preferred ETF (PGX)

• Dividend Yield: ~6.2%
• Expense Ratio: 0.52%
• AUM: ~$4.5 billion

PGX follows the ICE BofA Core Plus Fixed Rate Preferred Securities Index, emphasizing investment-grade preferred stocks. This ETF provides consistent monthly dividends and is heavily weighted in the financial sector. Its relative stability and high yield make it a solid choice for conservative income investors.

3. SPDR Wells Fargo Preferred Stock ETF (PSK)

• Dividend Yield: ~6.1%
• Expense Ratio: 0.45%
• AUM: ~$1.5 billion

PSK seeks to track the performance of the Wells Fargo Hybrid and Preferred Securities Aggregate Index. It focuses on investment-grade preferred securities, making it a relatively lower-risk option. With a balanced approach between yield and credit quality, PSK is well-suited for those seeking stability.

4. Global X U.S. Preferred ETF (PFFD)

• Dividend Yield: ~6.4%
• Expense Ratio: 0.23%
• AUM: ~$2 billion

PFFD is an attractive choice for cost-conscious investors, boasting one of the lowest expense ratios in the preferred stock ETF space. The fund provides broad exposure to U.S. preferred stocks while delivering solid monthly income. The lower fees can help maximize net returns over time.

5. First Trust Preferred Securities and Income ETF (FPE)

• Dividend Yield: ~6.7%
• Expense Ratio: 0.85%
• AUM: ~$5 billion

Unlike most preferred stock ETFs, FPE is actively managed, allowing for strategic shifts based on market conditions. This flexibility can help enhance yield and manage risk. While its expense ratio is higher than passive ETFs, its active approach has led to competitive performance over time.

Final Thoughts

Preferred stock ETFs offer an excellent way to secure stable, high-yield dividends with less volatility than common stocks. Whether you prioritize liquidity (PFF), low fees (PFFD), or active management (FPE), there is an ETF to match your investment goals. By adding preferred stock ETFs to a diversified portfolio, income investors can enjoy a steady cash flow while mitigating risks associated with individual stock selection.