Seidman Investment Portfolio Organization

Company: PowerShares Preferred Shares EFT

Sector: Other

PGX or PowerShares Preferred Shares EFT, is a concentrated fund which invests mainly in investment grade financial companies preferred shares (87%). PGX tracks the Bank of America Merrill Lynch Core Fixed Rate Preferred Securities Index. The fund has major holdings in preferred shares issued by JPM, HSBC, WFC, MS, DB, and GE. Over time, the fund price has held close to NAV. In the event of bankruptcy, preferred shares have priority over common equity.

The intent of IPO in this holding is to gain a small income generator (at time of writing the fund yields 7.37%), stability, and exposure to alternative investments. PGX provides IPO a monthly steam of dividends, as well as moderate stability with a proven track record of minor price fluctuations. As IPO expects low interest rates for an extended period of time, we expect PGX not to suffer from unforeseen interest rate changes. We intend to hold PGX for up to 5 years, or when interest rate increases becomes evident.

Page last modified March 20, 2015