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I'm searching for a no-load fund that specializes in or emphasizes Preferred stocks. I like dealing with Vanguard and my assets are in an IRA. Any help you can provide will be greatly appreciated. Thank you.
I'm not sure that you will find a no-load fund but maybe the ones cited in the linked article are available at certain brokerages without the load. Warning, it's a dated article. It's also possible that certain convertible and/or equity income funds hold a significant proportion of preferred issues but you will have to do some digging into their holdings.
@Alex: As Mark mentioned, I prefer PFF from iShares. However, there are other preferred stock funds both open and closed, plus ETF's. From your information I'm linking some funds for you to screen. Regards, Ted U.S. News & World Report Ranking Of Open-End Funds: http://money.usnews.com/funds/mutual-funds/rankings/preferred-stock
Advisory Research used to have a fund that was almost entirely preferreds, called Strategic Income, symbol ADVNX. I'm sure The Professor mentioned it on at least one occasion, but an MFO Search using the symbol gives me nothing. It still exists, but apparently the managers decided to go another route (no idea when this happened, but must have been in the past 1-2 yrs) and it is now a multisector bond fund. Nonetheless, it still has a significant presence in preferreds--- circa 40% --- and is still cheap and no-load. Might check it out.
Keep in mind that most preferreds have had a strong and long bull run. Many are priced at premiums. For example, the largest holding in PFF is HSBC preferred, currently priced at $25.58 or about a 2% premium. The second largest holding is Barclays Bank preferred, priced at $25.92, almost a 4% premium. As with most fixed-income ETFs, the fund has the right to give you shares of specific holding(s), not cash, should there be a credit crisis resulting in a run to sell the fund. The attraction of the ETFs are the low expenses. Mutual fund options include CPXAX and KIFYX. We have used Salient for some income-centered portfolios. The drawback is the high expense, but since the bear market bottom in 2009, it has the highest return.
PPSAX is a conservative option in an oef; don't know about LW availability at Vanguard. PGX is another decent choice in an etf.
Ditto, though, Bob's comment about premium pricing on preferreds (say that ten times). If I were interested enough to buy now, it'd be a small position in one of the etf's, with an eye to building up a position over time.
I'd ditto BobC's comment. Pricing is at a premium, because a lot of folks have had the same thought you have had -- but they've already bid up the prices when committing capital. As with any capital assets, its not only about the security's characteristics, but also about the price you pay...
While I normally eschew individual holdings, in preferreds, they might make sense, and specifically, acquainting yourself with new issues -- where, if you act ahead of the herd, you can snag some good issues at/around par, rather than at premiums to par.
Two good resourcess in this regard are quantumonline. com (specifically their IPO list of preferreds), and dividendyieldhunter.com. Those resources are free. A 3rd, good choice is a paid-subscription to Richard Lehman's "income securities" newsletter. Its not strictly about preferreds, though they are routinely represented.
Comments
http://mutualfunds.com/hybrid-funds/beginners-guide-to-preferred-stock-mutual-funds/
Personally I use CEF's for these investment vehicles and our resident link master uses PFF an iShare ETF.
Regards,
Ted
U.S. News & World Report Ranking Of Open-End Funds:
http://money.usnews.com/funds/mutual-funds/rankings/preferred-stock
U.S. News & World Report Ranking Of ETF's:
http://money.usnews.com/funds/etfs/rankings/preferred-stock
Preferred Stock CEF:
https://www.preferredstockchannel.com/slideshows/?slideshow=clo&page=1
http://www.advisoryresearch.com/solutions/mutual-funds/strategic-income-fund/
Ditto, though, Bob's comment about premium pricing on preferreds (say that ten times). If I were interested enough to buy now, it'd be a small position in one of the etf's, with an eye to building up a position over time.
While I normally eschew individual holdings, in preferreds, they might make sense, and specifically, acquainting yourself with new issues -- where, if you act ahead of the herd, you can snag some good issues at/around par, rather than at premiums to par.
Two good resourcess in this regard are quantumonline. com (specifically their IPO list of preferreds), and dividendyieldhunter.com. Those resources are free. A 3rd, good choice is a paid-subscription to Richard Lehman's "income securities" newsletter. Its not strictly about preferreds, though they are routinely represented.
JMO. good luck.
CPXIX at Scottrade: Investment minimum $100 for IRA but $100K for regular. ER .83
Regards,
Ted
Harry Domash's Dividend Detective:
http://www.dividenddetective.com/
Quantum Online:
http://www.quantumonline.com/QuickStartPF.cfm
Dividend Yield Hunters:
http://www.dividendyieldhunter.com/