Preferred Share ETFs on the TSX, NYSE, NASDAQ



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The best preferred share ETF is a bit of a misnomer.

There is only one ETF that consists of solely preferred share holdings on the Toronto Stock Exchange. However, there are a number of Preferred Share Funds available to buy in the United States and the American Exchanges are relatively easy for Canadians to access.

 

As a Canadian investor, you might be seeking Preferreds for relatively safe yields. Some of the companies that issue these preferreds may default in the future. In order to guard against that you are looking for preferred shares ETFs. You want to base your purchase on Canadian tax rules, MER (Management fees), holdings by sector, NAV and others.

Preffered Share ETFs readily available to Canadians

  1. Claymore S&P/TSX CDN Preferred Share ETF (CPD) - TSX traded ETF
  2. iShares S&P U.S. Preferred Stock Index Fund (PFF)
  3. Powershares Financial Preferred Portfolio Fund (PGF)
  4. PowerShares Preferred Portfolio Fund (PGX)
  5. SPDR Wells Fargo Preferred Stock ETF (PSK)

 

From examining the holdings of these ETFs, we have determined the biggest risk when it pertains to these ETFs is that all of them have holdings that lay primarily in the FIRE sector (Financials, Insurance, Real Estate). For us at least, that is not as desirable an industry to invest in. However, preferred shares in the TD Bank, Scotiabank etc... will probably not default - we still aren't comfortable holding Canadian financials.

Dec 6, 2010 Disclosure: no positions in any ETFs mentioned currently. Read our disclaimer at bottom.