PFFD: Same Risks Of Ultra-Long Duration

Valkyrie Trading Society Investing Group Leader Follow Summary The Global X US Preferred ETF appears to be a duration bet, appearing also to be unmitigated in that way by much constituent floating-rate debt, sampling top holdings. Rising benchmark rates associated with persistent inflation from geopolitical tensions and AI datacenter spending create a challenging macro backdrop for PFFD’s fixed income profile. Credit spreads remain low but could widen in theory should the economy get significantly worse, though many of the stocks in PFFD are industries without too many lumpy or unprofitable economics. PFFD’s lower expense ratio (0.23%) versus peers is a relative advantage, but current macro risks outweigh this benefit, making the ETF unattractive now. Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » Torsten Asmus/iStock via Getty Images The Global X US Preferred ETF ( PFFD ) tracks the ICE BofA Core US Preferred Securities index , which contains a mix of various preferreds, meaning some are fixed and some are floating and from This article was written by Valkyrie Trading Society 5.61K Followers Follow The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.