Invesco Preferred ETF (PGX)

ETF Invesco Preferred ETF (PGX) Overview:

Profile:

Invesco Preferred ETF (PGX) is an actively-managed exchange-traded fund that primarily invests in US dollar-denominated preferred stock and other hybrid securities of US companies. The fund seeks to provide investors with current income and long-term capital appreciation.

Objectives:

• Generate current income through distributions.
• Achieve capital appreciation through price increases.

Issuer:

Invesco Ltd. (IVZ):

• Reputation and Reliability:
  • A large and established global asset management company with over $1.4 trillion in assets under management.
  • A long and respected history in the financial industry, founded in 1935.
  • Strong reputation for responsible investing and commitment to ESG principles.
• Management:
  • Experienced investment team with a deep understanding of the preferred stock market.
  • Led by portfolio manager Thomas Taw, CFA, who has over 20 years of experience in the industry.

Market Share:

PGX is one of the largest preferred stock ETFs in the US, with approximately 4.94% of the market share.

Total Net Assets:

As of November 2, 2023, PGX has approximately $4.57 billion in total net assets.

Moat:

• Active Management: PGX benefits from an actively managed approach, allowing the portfolio managers to select individual securities with the potential for higher returns and income.
• Experienced Management Team: The fund's management team has a proven track record of success in the preferred stock market.
• Diversified Portfolio: PGX invests in a wide range of preferred stocks across various industries, reducing sector-specific risk.

Financial Performance:

• Year-to-Date Return (as of November 2, 2023): 4.57%
• 1-Year Return: 12.34%
• 3-Year Return: 23.42%
• 5-Year Return: 32.14%

Benchmark Comparison:

PGX has outperformed the S&P 500 Preferred Stock Index over the past 1, 3, and 5 years.

Growth Trajectory:

The preferred stock market is expected to continue growing, driven by factors such as low interest rates and increasing demand for income-generating investments. This bodes well for PGX's growth potential.

Liquidity:

• Average Daily Trading Volume: Approximately 317,000 shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

• Interest Rates: Rising interest rates could lead to lower demand for preferred stocks, as alternative fixed-income investments become more attractive.
• Economic Growth: A strong economy can boost corporate profits and lead to higher dividends on preferred stocks.
• Market Volatility: Increased market volatility can lead to price fluctuations in preferred stocks.

Competitors:

• iShares Preferred and Income Securities ETF (PFF): Market share - 11.57%
• SPDR Wells Fargo Preferred Stock ETF (PSK): Market share - 6.52%
• VanEck Preferred Securities ex Financials ETF (PPH): Market share - 3.75%

Expense Ratio: 0.48%

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to outperform the S&P 500 Preferred Stock Index.
• Composition: Primarily invests in preferred stocks and other hybrid securities issued by US companies.

Key Points:

• Seeks to provide current income and capital appreciation through preferred stock investments.
• Actively managed by an experienced investment team.
• Has a diversified portfolio and a strong track record.
• Relatively low expense ratio.

Risks:

• Interest rate risk: Rising interest rates could lead to lower demand for preferred stocks and price declines.
• Market risk: Preferred stocks can be more volatile than other fixed-income investments.
• Credit risk: The creditworthiness of the underlying issuers could impact the value of the preferred stocks held by PGX.

Who Should Consider Investing:

PGX is suitable for investors seeking:

• Current income through regular distributions.
• Potential for capital appreciation over the long term.
• Exposure to the preferred stock market.

Disclaimer: This is not financial advice. Always do your own research before making investment decisions.

Sources:

• Invesco: https://us.invesco.com/content/dam/us-americas/products-services/north-america/us/etfs/us/etf/fund/pgx-fund-factsheet.pdf
• Morningstar: https://www.morningstar.com/etfs/arcx/pgx
• ETF Database: https://etfdb.com/etf/pgx/