Overlap among PFF, PFFD, PGX, PGF and CWBPFF is an exchange-traded fund (ETF) that invests preferred stocks (fixed-rate, floating-rate, and convertible).
PFFD is similar to PFF, but the number of holdings of PFFD is almost half compared to PFF. The expense ratio of PFFD is also about half of PFF.
PGX is an ETF that invests fixed-rate preferred stocks.
PGF is an ETF that invests fixed-rate preferred stocks of financial institutions.
CWB is an ETF that invests convertible bonds as well as convertible preferred stocks.
So, the coverage of the ETFs above overlaps each other.
The lists of holdings can be downloaded from the official webpages of the ETF providers, and they have identifiers (SEDOL or ISIN) for each constituent. I counted the constituents that both ETFs held based on the identifiers. The result is as follows.
96% of the holdings in PGF are also included in PGX. (It consists of 55% of PGX.)
96% of the holdings in PGX are also included in PFF. (It consists of 57% of PFF.)
99% of the holdings in PFFD are also included in PFF. (It consists of 67% of PFF.)
19% of the holdings in CWB are also included in PFF. (It consists of 23% of PFF.)
10% of the holdings in CWB are also included in PFFD. (It consists of 18% of PFFD.)
There is no overlap between CWB and PGX, and between CWB and PGF.
The data are as of the end of September 2021. The percentages above are weight. (Based on market value, not number of constituents.)
The chart above shows the relationship among PGF, PGX, PFF and CWB. (PFFD is excluded for simplification.)
Roughly speaking, PGF is a subset of PGX.
PGX is a subset of PFF.
PFFD is a small copy of PFF.
PFF is the broadest coverage compared with PFFD, PGX and PGF.
PGF and PGX don’t hold convertible preferred stocks, but PFFD, PFF and CWB do.
The significant overlap among the preferred stock ETFs (PGF, PGX, PFFD and PFF) leads to similar price movement among them.
In my view, holding PGF, PGX, PFFD as well as PFF doesn’t diversify your portfolio. Rather, it means a concentration to the fixed-rate preferred stocks of financial institutions.
Holding PFF only is enough.
The overlap between PFF and CWB is slight. The price movement is different. Holding both PFF and CWB is reasonable for diversification.
As I’m a non-native English speaker, this idea may contain some strange wordings. Nevertheless, thanks for reading.
