Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTTony DongFri, July 3, 2026 at 7:21 PM GMT+2 5 min readQuick ReadPreferred stock ETFs simplify a complex asset class: They provide diversification, professional management, and monthly income while avoiding many of the challenges involved with selecting individual preferred securities.Each ETF targets a different objective: PFF offers broad market exposure, PFXF reduces financial sector concentration, while PFFA seeks higher income through active management and moderate leverage.Higher yield comes with higher trade-offs: Preferred stocks remain sensitive to both equity market declines and rising interest rates, while actively managed funds like PFFA add leverage risk and materially higher fees.Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.evan_huang / Shutterstock.comPreferred stocks are one corner of the market where I think most retail investors are better off using an ETF rather than buying individual securities directly. That's not just because ETFs are convenient. Individual preferred shares can be surprisingly complicated.Many come with features such as call provisions, allowing the issuer to redeem them early if interest rates fall. Others have fixed-to-floating or reset-rate structures, where the dividend changes according to a predetermined formula after several years. There are also differences in credit quality, cumulative versus non-cumulative dividends, perpetual versus fixed maturities, and, above all, many preferred issues simply aren't very liquid. Buying and selling them isn't nearly as straightforward as trading common stocks.An ETF solves many of these problems. Investors receive instant diversification across hundreds of preferred securities, daily portfolio transparency, professional portfolio management, and regular monthly distributions without needing to evaluate each issue individually.Today, there are dozens of preferred stock ETFs available. Here are three that stand out for different reasons: one is the industry's default choice thanks to its enormous asset base, another reduces the heavy concentration in financial institutions that dominates the preferred market, and the last prioritizes maximizing monthly income for investors willing to accept additional risk.Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.The iShares Preferred and Income Securities ETF (PFF) remains the largest preferred stock ETF on the market, managing approximately $13.17 billion in assets under management. The fund passively tracks the ICE Exchange-Listed Preferred & Hybrid Securities Index, providing exposure to roughly 460 preferred securities.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info