This asset can provide investors hefty yields at a favorable tax rate. Here’s what you should know
Preferred Stocks Overview:
- Hybrid assets combining bond and equity attributes, issued by banks and utilities.
- Trade on exchanges like stocks, offering steady quarterly income with yields over 6%.
- Tax-advantaged income with coupons taxed at 0%, 15%, or 20% compared to corporate bonds.
- Unique risk profile with long maturity dates, call options, and lower priority in case of issuer insolvency.
- Consideration of credit ratings crucial due to risks associated with preferred stocks.
Tapping into the Market:
- Individual preferred stock selection requires significant research and monitoring.
- Consider ETFs like First Trust Preferred Securities and Income ETF (FPE) or iShares Preferred and Income Securities ETF (PFF).
- FPE offers a 5.82% yield, 5.8% total return in 2024, and holds issues from Wells Fargo and Barclays.
- PFF has a 6.33% yield, over 4% total return YTD, with issuers like Wells Fargo, Citigroup, Albemarle, and NextEra Energy.
- Emphasize not only yields but also expense ratios when choosing an ETF for preferred stocks.
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FPE Crosses Below Key Moving Average Level
FPE Stock Performance: FPE's stock has a 52-week low of $16.95 and a high of $18.23, with the last trade recorded at $17.75.
Market Analysis Disclaimer: The opinions expressed in the article are solely those of the author and do not necessarily represent Nasdaq, Inc.
3 New Fixed-Income ETFs Use Options To Target Higher Income
New ETFs Launched: First Trust Advisors has introduced three new Target Income ETFs—LQTI, HYTI, and LTTI—designed to enhance income potential while maintaining fixed-income exposure through option strategies, each with a net expense ratio of 0.65%.
Investment Focus: The funds focus on different sectors, including investment-grade corporate bonds, high-yield corporate bonds, and long-term U.S. Treasury securities, utilizing FLEX options to aim for an annual income rate 5% higher than their underlying ETFs.
These income-generating assets are paying yields of more than 5%
Investment Opportunities in Preferred Securities: Investors can find attractive yields in the preferred securities market, which offer quarterly income and potential tax advantages, with yields exceeding 5%. However, they face risks such as interest rate sensitivity and lower seniority compared to bondholders.
ETFs for Diversification: For those seeking diversified exposure to preferred securities, exchange-traded funds like iShares Preferred and Income Securities ETF (PFF) and First Trust Preferred Securities and Income ETF (FPE) provide options with competitive returns and manageable expense ratios.
This asset can provide investors hefty yields at a favorable tax rate. Here’s what you should know
Preferred Stocks Overview:
- Hybrid assets combining bond and equity attributes, issued by banks and utilities.
- Trade on exchanges like stocks, offering steady quarterly income with yields over 6%.
- Tax-advantaged income with coupons taxed at 0%, 15%, or 20% compared to corporate bonds.
- Unique risk profile with long maturity dates, call options, and lower priority in case of issuer insolvency.
- Consideration of credit ratings crucial due to risks associated with preferred stocks.
Tapping into the Market:
- Individual preferred stock selection requires significant research and monitoring.
- Consider ETFs like First Trust Preferred Securities and Income ETF (FPE) or iShares Preferred and Income Securities ETF (PFF).
- FPE offers a 5.82% yield, 5.8% total return in 2024, and holds issues from Wells Fargo and Barclays.
- PFF has a 6.33% yield, over 4% total return YTD, with issuers like Wells Fargo, Citigroup, Albemarle, and NextEra Energy.
- Emphasize not only yields but also expense ratios when choosing an ETF for preferred stocks.
Interesting FPE Put Options For July 19th
FPE Crosses Below Key Moving Average Level
FPE Stock Performance: FPE's stock has a 52-week low of $16.95 and a high of $18.23, with the last trade recorded at $17.75.
Market Analysis Disclaimer: The opinions expressed in the article are solely those of the author and do not necessarily represent Nasdaq, Inc.
3 New Fixed-Income ETFs Use Options To Target Higher Income
New ETFs Launched: First Trust Advisors has introduced three new Target Income ETFs—LQTI, HYTI, and LTTI—designed to enhance income potential while maintaining fixed-income exposure through option strategies, each with a net expense ratio of 0.65%.
Investment Focus: The funds focus on different sectors, including investment-grade corporate bonds, high-yield corporate bonds, and long-term U.S. Treasury securities, utilizing FLEX options to aim for an annual income rate 5% higher than their underlying ETFs.
These income-generating assets are paying yields of more than 5%
Investment Opportunities in Preferred Securities: Investors can find attractive yields in the preferred securities market, which offer quarterly income and potential tax advantages, with yields exceeding 5%. However, they face risks such as interest rate sensitivity and lower seniority compared to bondholders.
ETFs for Diversification: For those seeking diversified exposure to preferred securities, exchange-traded funds like iShares Preferred and Income Securities ETF (PFF) and First Trust Preferred Securities and Income ETF (FPE) provide options with competitive returns and manageable expense ratios.
This asset can provide investors hefty yields at a favorable tax rate. Here’s what you should know
Preferred Stocks Overview:
- Hybrid assets combining bond and equity attributes, issued by banks and utilities.
- Trade on exchanges like stocks, offering steady quarterly income with yields over 6%.
- Tax-advantaged income with coupons taxed at 0%, 15%, or 20% compared to corporate bonds.
- Unique risk profile with long maturity dates, call options, and lower priority in case of issuer insolvency.
- Consideration of credit ratings crucial due to risks associated with preferred stocks.
Tapping into the Market:
- Individual preferred stock selection requires significant research and monitoring.
- Consider ETFs like First Trust Preferred Securities and Income ETF (FPE) or iShares Preferred and Income Securities ETF (PFF).
- FPE offers a 5.82% yield, 5.8% total return in 2024, and holds issues from Wells Fargo and Barclays.
- PFF has a 6.33% yield, over 4% total return YTD, with issuers like Wells Fargo, Citigroup, Albemarle, and NextEra Energy.
- Emphasize not only yields but also expense ratios when choosing an ETF for preferred stocks.
Interesting FPE Put Options For July 19th
