Investing for Income; How Preferreds Stack Up; These hybrid investments offer high yields but significant risks

In the 2008 market meltdown, for instance, the largest preferred-stock ETF, the $8.5 billion iShares S&P U.S. Preferred Stock Index, lost about two-thirds as much as the Standard & Poor's 500-stock index, according to investment researcher Morningstar Inc. Plus, companies must pay divid...

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Bibliographic Details
Published in:The Wall Street journal. Eastern edition 2012-05-07
Main Author: Burton, Jonathan
Format: Newspaper Article
Language:English
Subjects:
Credit risk
Dividends
Interest rates
Investment policy
Investments
Mutual funds
Preferred stock
Stockholders
Online Access:Get full text
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Summary:In the 2008 market meltdown, for instance, the largest preferred-stock ETF, the $8.5 billion iShares S&P U.S. Preferred Stock Index, lost about two-thirds as much as the Standard & Poor's 500-stock index, according to investment researcher Morningstar Inc. Plus, companies must pay dividends to preferred shareholders before they pay a common-stock dividend, hence the "preferred" label.
ISSN:2574-9579