Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolios

Financial Preferred ETF (PGF) Hits New 52-Week High

Published 07/20/2016, 07:03 AM
Updated 07/09/2023, 06:31 AM
HSBA
-
BARC
-
WFC
-
PGF
-

For investors seeking momentum, PowerShares Financial Preferred ETF ( (TO:PGF) ) is probably on radar now. The fund just hit a 52-week high, and is up roughly 58% from its 52-week low price of $12.24/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

PGF in Focus

PGF provides exposure to the 89 preferred securities traded in the U.S. market issued by financial institutions. The product is heavily concentrated on the top three firms, HSBC Holdings (LON:HSBA), Barclays (LON:BARC) Bank Plc and Wells Fargo (NYSE:WFC) & Co, at around 8.00%. The product charges investors 63 basis points in fees (see: all Convertibles/CEFs/Preferred Stock ETFs here).

Why the Move?

With financial stocks performing well lately on a decent start to the second-quarter earnings season and an ongoing hunt for yield, this ETF advanced considerably. Preferred equities are known for their high-yielding nature and normally get priority over equity shares both in case of dividend payments as well as at the time of liquidation if the company fails. Thus, preferred stocks are relatively stable and usually exhibit a low correlation with other income generating assets.

More Gains Ahead?

The fund has a positive weighted alpha of 6.14. A positive weighted alpha hints at more gains. Further, the sole lure for the sector – demand for current income – looks solid at the current level, so there is definitely some promise for those who want to ride this ETF a little further.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .


PWRSH-FIN PFD (PGF): ETF Research Reports

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.