Low-Duration, Preferred Security ETF Debuts

November 20, 2019

Advisors Asset Management launched its first fixed income ETF today. The AAM Low Duration Preferred and Income Securities ETF (PFLD) tracks the ICE 0-5 Year Duration Exchange-Listed Preferred & Hybrid Securities Index.

PFLD comes with an expense ratio of 0.45% and lists on the NYSE Arca.

The fund’s underlying index covers preferred and hybrid securities denominated in U.S. dollars and listed in the U.S. Securities in the index further are required to have an option-adjusted duration of no more than five years as well as meeting a variety of minimum size, price, liquidity and maturity thresholds.

The largest preferred securities ETF is the iShares Preferred and Income Securities ETF (PFF), which has $16.9 billion in assets under management and is slightly more expensive than PFLD at 0.46%. However, PFF takes a broad approach to the space and does not seem to have any requirements related to the duration of its underlying securities.

Contact Heather Bell at [email protected]

 

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