The Invesco Preferred ETF (PGX) is designed to track the ICE BofAML Core Plus Fixed Rate Preferred Securities Index. The index, created and maintained by ICE Data Indices, LLC, is a market capitalization-weighted index representing the fixed-rate U.S. dollar-denominated preferred securities market. PGX aims to provide investors with exposure to a diversified portfolio of preferred securities, adhering to specific guidelines regarding security selection and concentration policies. With a focus on preferred securities rated at least B3 and possessing an investment-grade country risk profile, PGX offers investors access to a segment of the market known for its income potential and relatively stable returns.
While the primary objective of the Invesco Preferred ETF (PGX) revolves around fixed-rate U.S. dollar-denominated preferred securities, it still encompasses a dividend aspect. The dividend distribution of PGX reflects the performance of its underlying index, which consists of traditional and other preferred securities. These distributions typically occur in accordance with the dividend policies of the constituent securities, which are subject to the guidelines set by ICE Data Indices, LLC, the index provider. As of the latest data available, PGX utilizes a sampling methodology to achieve its investment objective, concentrating its investments in sectors that reflect the composition of the underlying index, with notable exposure to the financials sector as of the last reporting period.
Tracking the ICE BofAML Core Plus Fixed Rate Preferred Securities Index lies at the heart of the Invesco Preferred ETF's strategy. PGX primarily invests in the components of this index, which is designed to measure the performance of the fixed-rate U.S. dollar-denominated preferred securities market. The index includes traditional and other preferred securities, excluding unlisted preferred securities while allowing for inclusion of unlisted senior or subordinated debt-like securities. PGX employs a sampling methodology to achieve its investment objective, aiming to closely match the performance of its underlying index while maintaining diversification across sectors. As of October 31, 2023, the underlying index consisted of 260 constituents, with the fund concentrating its investments based on the index's industry concentration.
The correlation aspect of the Invesco Preferred ETF (PGX) is essential for understanding its behavior concerning the fixed rate U.S. dollar-denominated preferred securities market. As PGX tracks the ICE BofAML Core Plus Fixed Rate Preferred Securities Index, its correlation with this market segment is significant. Investors rely on PGX's correlation to preferred securities to assess risk and make informed investment decisions within this asset class.
The Invesco Preferred ETF (PGX) primarily invests in components of the Underlying Index, which is a market capitalization-weighted index focusing on fixed-rate U.S. dollar-denominated preferred securities. These preferred securities span across both traditional and non-traditional categories, excluding unlisted preferred securities but including eligible unlisted senior or subordinated debt-like securities. The index methodology employs rules-based criteria, requiring qualifying securities to hold at least a B3
The exposure characteristic of the Invesco Preferred ETF (PGX) is deeply rooted in the fixed-rate U.S. dollar-denominated preferred securities market. As an index fund, PGX reflects the composition and performance of the underlying ICE BofAML Core Plus Fixed Rate Preferred Securities Index. This index is meticulously curated, encompassing both traditional and non-traditional preferred securities while adhering to strict selection criteria based on ratings by Moody’s, S&P, and Fitch. With its emphasis on preferred securities, PGX offers investors an opportunity to tap into a specific segment of the fixed-income market, providing potential for stable income streams and portfolio diversification.
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