Preferred stock ETFs yield 6 to 9 percent
Preferred stock ETFs have become a common income vehicle for investors.
The category is heavily concentrated in bank and insurance issuers.
iShares Preferred and Income Securities ETF has $13.3 billion in net assets, making it the largest preferred ETF.
Preferred shares pay fixed dividends and sit senior to common stock in the capital structure, ranking junior to debt, with distributions adding 200 to 600 basis points on top of the 10-year Treasury rate.