A Preference For A Preferred ETF

In the summer of 2009, the ETF Professor wasn't too impressed with ETFs that focused on preferred stocks. Well, the time has come for a change of view on that and while there are several options available in the world of preferred ETFs, there is one selection that rules the roost. That is the iShares S&P U.S. Preferred Stock Index (NYSE: PFF), which is currently trading near a new 52-week high, so it might be best to approach this position with some caution and start small. That said, if the market continues its bullish ways, PFF is sure to participate. Many investors ignore preferred stocks because they don't know much about them, but that is where an ETF like PFF is useful. It does the legwork for you. PFF is littered with high-quality preferred issues from likes of Ford (NYSE: F), Bank of America (NYSE: BAC), Met Life (NYSE: MET) and Wells Fargo. Another reason to embrace PFF: A yield that is close to 8%.