SPFF: Chasing The Highest Yields In Preferreds Looks A Bad Idea

Group 1 - The Global X SuperIncome Preferred ETF (SPFF) has experienced a price decline of 12% since the initial "Sell" rating in 2022 and nearly 5% since the latest rating in November 2024, despite distributions keeping total return positive [1] - The ETF was launched on July 16, 2012, and tracks the Global X U.S. High Yield Preferred Index, consisting of 49 holdings with a 30-day SEC yield of 6.42% and an expense ratio of 0.48% [2] - SPFF invests in preferred stocks, which have priority over common stocks in dividend payments but are junior to debt and lack voting rights, exhibiting a price behavior between stocks and bonds [2] Group 2 - The portfolio turnover rate was 63% in the most recent fiscal year and 110% in the previous year, indicating a relatively high level of trading activity [3] - The fund is concentrated, with the top 10 issuers representing 64.1% of asset value, and the six largest issuers weighing between 6% and 10% [4] Group 3 - The top 10 issuers in the SPFF portfolio include Bank of America Corp. (9.77%), Athene Holding Ltd. (7.71%), and Morgan Stanley (7.24%), among others [5]