Preferred Stock ETF (FPEI) Hits Fresh 52-Week High
For investors seeking momentum, First Trust Institutional Preferred Securities and Income ETF (FPEI) is probably on the radar now. The fund just hit a 52-week high and is up 9.5% from its 52-week low price of $17.81 per share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and its near-term outlook to get a better sense of where it might be headed.
FPEI in Focus
It is an actively managed exchange-traded fund that provides exposure to institutional preferred securities and income-producing debt securities. The product charges 85 basis points (bps) in annual fees (See: All Convertibles/CEFs/OET/Preferred Stock ETFs here).
What Led to the Rise?
A lower interest rate environment boosts the market value of fixed-income securities like those held by FPEI. The recent interest rate cuts and expectations of a dovish monetary policy in the United States must have boosted prices of preferred securities and income-producing debt, which, in turn, might have resulted in a fresh 52-week high for FPEI.
More Gains Ahead?
FPEI may continue its strong performance in the near term, with a positive weighted alpha of 4.00 (as per Barchart.com), which suggests a further rally.
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This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
