Best Preferred Stock ETFs in 2026

Preferred stock ETFs occupy a distinct niche in income investing, offering yields that typically exceed those of traditional bond funds due to the hybrid debt-equity nature of preferred securities. Among the 25 funds in this category, iShares' PFF stands as the largest fund shown here by a wide margin at $12.3B in AUM, more than double the next-largest fund, FPE at $6.1B. The category is served by a mix of large asset managers (iShares, Invesco, First Trust) alongside more specialized or active strategies from issuers like Virtus and Principal, with all ten funds shown here paying distributions monthly — a hallmark of the category that appeals to income-focused investors seeking regular cash flow.

• PFFA posts the highest yield among the top 10 shown here at 10.60%, but it also carries by far the highest expense ratio at 2.11%, reflecting its actively managed, leveraged strategy.
• PFFD combines a competitive 6.86% yield with the lowest expense ratio in the top 10 at 0.23%, tying for strongest yield-to-cost efficiency among funds shown here.
• PFXF offers the lowest yield in this top-10 group at 4.40%, consistent with its ex-financials exclusion strategy that narrows the preferred universe it draws from.
• AUM is concentrated at the top, with PFF and FPE together holding roughly $18.4B, more than the combined total of the next six funds listed.
• The category average yield of 6.60% sits above several top-10 funds, including VRP (5.81%), PREF (5.60%), and JPRF (5.85%), suggesting a wide dispersion between conservative and higher-yielding strategies.

Preferred stock ETFs carry sector-specific risks worth noting, particularly interest-rate sensitivity and concentration in financial-sector issuers, since many preferred securities are issued by banks and insurers. Call risk is also relevant, as issuers may redeem preferreds when rates decline. The wide expense ratio range seen here — from 0.23% to 2.11% — reflects meaningfully different strategies, from passive index tracking to active, leveraged approaches, which carries implications for how returns and risk are distributed across funds in this category.

• Duration and credit risk: rising rates mark down longer-duration NAVs, and credit-spread widening can hit lower-rated holdings hard in a single risk-off week.
• Concentration in one theme: most funds here focus on preferred stock, so the whole list tends to draw down together when that corner of the market falls out of favor — diversification across the table is lower than the fund count suggests.
• Expense drag: expense ratios in this group average 0.59% — several times what broad index funds charge — and that cost compounds directly against total return.
• Short track records: 6 of the 25 funds launched within the last three years, so their distribution history is too short to judge payout durability across a full market cycle.
• Distributions are not contractual: each payout is declared period by period, so the yields on this page can fall without notice when portfolio income, option premium, or fund policy changes.

"Best" here means the selection rule below, applied to our own data — not an opinion poll and not a prediction:

• Universe: every security in our database matching this category — 29 qualified as of October 2026.
• Exclusions: liquidated, delisted and renamed funds drop out automatically; a renamed fund's successor appears in its place.
• Ordering: assets under management, largest first.
• Cap: the top 25 are shown; 4 further matching funds are not listed here. Use the screener for the complete set.
• Independence: no placement on this page is paid, sponsored, or influenced by a fund issuer.