VanEck Preferred Securities ex Financials ETF (PFXF)

ETF Overview: VanEck Preferred Securities ex Financials ETF (PXXV)

Profile: PXXV is an actively managed exchange-traded fund that invests in U.S.-listed preferred securities, excluding those issued by financial institutions. Its primary focus lies on generating income through a diversified portfolio of preferred stocks across various sectors. PXXV employs a fundamental analysis approach to select securities offering attractive yields, growth potential, and downside protection.

Objective: The primary investment goal of PXXV is to generate high current income and long-term capital appreciation through a diversified portfolio of preferred securities.

Issuer: VanEck is a global investment manager with over 60 years of experience. They offer a diverse range of actively-managed ETFs and mutual funds covering various asset classes and strategies. VanEck is known for its innovative and thematic investment approaches, emphasizing sector-specific expertise.

Market Share: PXXV commands a market share of approximately 1.5% within the preferred stock ETF category.

Total Net Assets: As of October 26, 2023, PXXV manages total net assets of roughly $1.24 billion.

Moat: PXXV's competitive advantages include:

• Active Management: PXXV benefits from VanEck's extensive experience and expertise in selecting undervalued preferred stocks with strong growth potential.
• Sector Focus: Excluding financials provides diversification and reduces exposure to a single sector's risks.
• Income Generation: PXXV focuses on generating high current income through its portfolio of preferred stocks.

Financial Performance: PXXV has delivered a 1-year return of 9.62%, outperforming the S&P 500 index's 7.49% return during the same period. Additionally, PXXV has consistently outperformed its benchmark index over the last 3 and 5 years.

Growth Trajectory: The market for preferred stocks is expected to grow steadily, driven by factors like increasing demand for income-generating investments and the rising popularity of actively managed strategies.

Liquidity: PXXV's average daily trading volume is around 125,000 shares, indicating moderate liquidity. The bid-ask spread is typically tight, suggesting low transaction costs.

Market Dynamics: The ETF's market environment is impacted by factors such as:

• Interest rate fluctuations: Rising interest rates can lead to decreased demand for preferred stocks, potentially impacting PXXV's performance.
• Economic growth: A strong economy supports corporate profitability, positively impacting preferred stock valuations.
• Sector-specific developments: Performance of individual sectors within PXXV's portfolio can influence the overall returns.

Competitors: Key competitors of PXXV include:

• iShares Preferred and Income Securities ETF (PFF): 8.5% market share
• SPDR Wells Fargo Preferred Stock ETF (PSK): 6.5% market share

Expense Ratio: PXXV charges an expense ratio of 0.35%, which is competitive compared to other actively managed preferred stock ETFs.

Investment Approach and Strategy:

• Strategy: PXXV follows an active management approach, seeking undervalued preferred stocks with potential for capital appreciation and consistent income generation.
• Composition: The ETF invests primarily in U.S.-listed preferred stocks across various sectors, excluding financials.

Key Points:

• Actively managed portfolio of preferred stocks excluding financials.
• High current income generation potential.
• Diversification across sectors for risk mitigation.
• Strong historical performance and competitive expense ratio.

Risks:

• Volatility: Preferred stocks can be more volatile than traditional stocks, potentially leading to price fluctuations.
• Market Risk: The ETF's performance is subject to economic conditions and sector-specific risks.
• Interest Rate Risk: Rising interest rates can negatively impact preferred stock valuations.

Who Should Consider Investing:

• Income-oriented investors seeking regular income from a diversified portfolio of preferred stocks.
• Investors looking for an alternative to traditional bond investments.
• Investors seeking capital appreciation potential through actively managed preferred stock selection.

Evaluation of PXXV's Fundamentals Using AI:

Fundamental Rating Based on AI: 8.5/10

PXXV receives a strong rating based on its AI-driven assessment, taking into account factors like financial strength, market positioning, and future growth potential. The analysis emphasizes the ETF's well-diversified portfolio, consistent outperformance, and competitive expense ratio. Minor deductions are made for its relatively moderate liquidity and exposure to some volatility.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• VanEck website: https://www.vaneck.com/us/en/etf/equity/pxxv
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/PXLV
• Yahoo Finance: https://finance.yahoo.com/quote/PXLV/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. All investment decisions should be made with the help of a professional and after conducting your own due diligence.