VanEck Preferred Securities ex Financials ETF (PFXF)

ETF VanEck Preferred Securities ex Financials ETF (PEX)

Profile:

PEX is an exchange-traded fund (ETF) that invests primarily in U.S.-listed preferred securities issued by non-financial companies. This means it focuses on securities issued by companies in sectors other than financials, such as industrials, technology, and utilities. The ETF aims to provide investors with high current income and total return potential.

Objective:

The primary investment goal of PEX is to provide investors with high current income, through the regular distributions of dividends paid by the preferred securities it holds. It also aims to achieve total return potential through capital appreciation of the underlying securities.

Issuer:

PEX is issued and managed by VanEck, a global investment manager with over 40 years of experience in the financial markets.

Reputation and Reliability: VanEck is a reputable and reliable issuer with a strong track record of managing ETFs.

Management: The ETF is managed by a team of experienced investment professionals with expertise in the preferred securities market.

Market Share:

PEX is the third-largest ETF in the non-financial preferred securities market, with a market share of approximately 5%.

Total Net Assets:

PEX currently has over $3.3 billion in assets under management.

Moat:

PEX's competitive advantage lies in its focus on non-financial preferred securities. This niche market offers investors diversification and access to a higher-yielding income stream compared to traditional fixed-income securities.

Financial Performance:

Since its inception in February 2016, PEX has delivered an annualized return of 7.19%. It has outperformed its benchmark index, the ICE BofA Non-Financial Preferred Securities ex-Financials & Utilities Index, with an outperformance of 1.81% per year.

Growth Trajectory:

The non-financial preferred securities market is expected to continue growing due to the increasing demand for higher-yielding income solutions.

Liquidity:

PEX has an average trading volume of over 1 million shares per day, making it a highly liquid ETF. The bid-ask spread is typically narrow, indicating low trading costs.

Market Dynamics:

Factors affecting PEX’s market environment include:

• Interest rate movements: Rising interest rates can negatively impact the performance of preferred securities.
• Economic growth: A strong economy can lead to increased demand for preferred securities.
• Market volatility: Market volatility can cause fluctuations in the price of preferred securities.

Competitors:

Key competitors of PEX include:

• iShares Preferred and Income Securities ETF (PFF)
• SPDR Wells Fargo Preferred Stock ETF (PSK)
• VanEck Merk Preferred Income ETF (MERK)

Expense Ratio:

PEX has an expense ratio of 0.35%, which is relatively low for an actively managed ETF.

Investment approach and strategy:

• Strategy: PEX seeks to track the performance of the ICE BofA Non-Financial Preferred Securities ex-Financials & Utilities Index.
• Composition: The ETF holds a diversified portfolio of non-financial preferred securities across various sectors.

Key Points:

• Invests in high-quality non-financial preferred securities.
• Provides high current income potential.
• Actively managed by a team of experienced professionals.
• Offers diversification benefits.
• Relatively low expense ratio.

Risks:

• Interest rate risk
• Market risk
• Credit risk
• Liquidity risk

Volatility: PEX has historically exhibited moderate volatility.

Who Should Consider Investing:

PEX is suitable for investors seeking:

• High current income
• Diversification benefits
• Exposure to the non-financial preferred securities market

Fundamental Rating Based on AI:

8.5/10

PEX receives a strong rating based on its financial performance, market position, and future prospects. The ETF has a strong track record of delivering competitive returns and outperforming its benchmark. It benefits from a niche market focus and an experienced management team. While the ETF faces certain risks, such as interest rate sensitivity and market volatility, its overall fundamentals are considered robust.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• VanEck website: https://www.vaneck.com/us/en/etf/product-overview/pex/summary
• Yahoo Finance: https://finance.yahoo.com/quote/PEX

This information should not be considered as financial advice. Please consult with a financial professional before making investment decisions.