There are approximately 24 preferred stock exchange-traded funds (ETFs), managing an aggregate of around $28 billion in assets under management (AUM). Among these, five boast AUMs exceeding $1 billion each. Although this segment isn’t overwhelmingly large, it maintains a respectable size with expense ratios typically ranging from 0.40% to 0.60%.
The majority of the more substantial preferred stock ETFs comprise a portfolio of hundreds of different issues. This extensive assortment leads to significant diversification in credit risk, mitigating potential financial vulnerabilities and offering investors a balanced blend of stability and profitability in their investment choices.
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