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10 Best-Performing Preferred Stock Funds

By ValueWalkStock MarketsFeb 07, 2022 12:27AM ET
www.investing.com/analysis/10-bestperforming-preferred-stock-funds-200617259
10 Best-Performing Preferred Stock Funds
By ValueWalk   |  Feb 07, 2022 12:27AM ET
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Preferred stocks are hybrid instruments that have features of both bonds and stocks. Investors sometimes prefer such stocks because they tend to be less risky and usually pay a bigger dividend than common stocks.

However, investing in a preferred stock is not as easy as investing in common stock. Preferred stocks come in several share classes, and not every brokerage can help you find the one that meets your requirements. Thus, one of the best ways to invest in preferred stocks is through mutual funds and exchange-traded funds. Let’s take a look at the 10 best-performing preferred stock funds, in reverse order.

We have used the return data from money.usnews.com covering the last year to rank the 10 best-performing preferred stock funds.

10. Principal Capital Securities Fund (4%)

Principal Capital Securities Fund Class S (MUTF:PCSFX) can invest up to 100% of its assets in below-investment-grade preferred securities. It is down by about 2% in the last three months but has returned almost 9% in the last three years. PCSFX has more than $1.2 billion in net assets. The fund's top three holdings are: U.S. Bancorp (NYSE:USB), Zurich Finance (Ireland) DAC and Dominion Energy (NYSE:D).

9. PIMCO Preferred and Capital Secs Fd (4%)

PIMCO Preferred and Capital Securities Fund (MUTF:PFANX) normally invests in a portfolio of preferred securities and capital securities. It is down by about 2% in the last three months but up by more than 9% for the last three years. PFANX has more than $2.5 billion in net assets. Its top three holdings are: PIMCO Capital Securities Fd (Cayman) Ltd, 5 Year Treasury Note Future Dec 21 and PIMCO Fds.

8. Destra Flaherty & Crumrine Pref & Inc Fd (5%)

Destra Flaherty & Crumrine Preferred and Income Fund (MUTF:DPIAX) mainly invests in a portfolio of preferred and income-producing securities. It has been almost flat in the last three months and has returned over 8% in the last three years. DPIAX has more than $320 million in net assets. The fund's top three holdings are: Fidelity® Inv MM Fds Treasury I, Banco Santander FXDFR PFS PERPETUAL USD 200000, and Liberty Mutual Group, Inc. 7.8%.

7. First Trust Preferred Sec & Inc Fd (5%)

First Trust Preferred Securities and Income Fund (MUTF:FPEAX) primarily invests in preferred and other securities with similar economic characteristics. It has been roughly flat for the last three months and has returned over 8% for the last three years. FPEAX has more than $320 million in net assets. Its top three holdings are: Barclays PLC (LON:BARC) 8%, AerCap Holdings NV (NYSE:AER) 5.88% and Emera Incorporated (TSX:EMA) 6.75%.

6. Cohen & Steers Prfrd Secs & Inc SMA Shrs (5%)

Cohen & Steers Preferred Securities and Income SMA Shares (MUTF:PISHX) usually invests in preferred and other income securities from U.S. and non-U.S. companies. It has been roughly flat in the last three months and has more than $350 million in net assets. The fund's top three holdings are: State Street Instl Treasury MMkt Instl, American Express (NYSE:AXP) 3.55% and Wells Fargo (NYSE:WFC) 3.9%.

5. Nuveen Preferred Securities & Income Fd (5%)

Nuveen Preferred Securities & Income Fund Class A (MUTF:NPSAX) normally invests in preferred and other income-producing securities. It may invest in securities rated as investment grade or below. It has been roughly flat in the last three months and has returned over 8% in the last three years. NPSAX has more than $5.7 billion in net assets. The fund's top two holdings are: HSBC Holdings (NYSE:HSBC) 6.38% and Deutsche Bank New York Branch 6%.

4. Innovative Preferred Plus Fund (8%)

Innovative Preferred Plus Fund (MUTF:IPPPX) mainly invests in undervalued preferred and debt securities and credit spread options on the S&P 500 Index. It has been roughly flat in the last three months and has more than $14 million in net assets. The fund's top three holdings are: Bank of America Corporation (NYSE:BAC) 5.875%, AerCap Holdings N.V. 5.875%, and Regions Financial Corporation (NYSE:RF) 5.75%.

3. Virtus AllianzGI Preferred Secs and Inc (9%)

Virtus AllianzGI Preferred Securities and Income Fund (MUTF:ARISX) primarily invests in preferred or debt securities issued by U.S. and non-U.S. issuers. It has been roughly flat in the last three months and has returned almost 10% for the past three years. ARISX has more than $34 million in net assets. The fund's top three holdings are: MetLife (NYSE:MET), Dreyfus Government Cash Mgmt Instl, and First Horizon 6.50% PRF PERPETUAL USD 25.

2. Salient Select Income Fund (13%)

Salient Select Income Fund (MUTF:KIFAX) invests in income-producing securities, especially in real estate companies, such as real estate investment trusts (REITs). It has declined by about 2% in the last three months and is up by over 6% in the past three years. KIFAX has more than $290 million in net assets. The fund's top two holdings are: Lexington Realty Trust Preferred 6.50% Series C Cumulative Convertible Preferred Stock and RPT Reality 7.25% Cum Conv Perp Pfd Shs of Benef Interest Series D.

1. Orinda Income Opportunities Fund (20%)

Orinda Income Opportunities Fund primarily invests in U.S. and non-U.S. securities and other investment instruments, including equity securities, debt securities and derivatives. It has declined by about 2% in the last three months and is up by over 2% in the past three years. OIOAX has more than $177 million in net assets. The fund's top three holdings are: Vornado Realty Trust (NYSE:VNO), RLJ Lodging Trust USD 1.95 Cum Conv Pfd Registered Shs Series –A, and Highwoods Properties (NYSE:HIW).

10 Best-Performing Preferred Stock Funds
 

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10 Best-Performing Preferred Stock Funds

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