Preferred ETF's

In December I made a post about my "Venturing into preferred stock". Since that purchase of F-A I have also picked up BML-Q (an 8.6% note from Bank of America). The main difficulty with these preferreds is that you would have to buy a wide variety to spread your risk. Risks that exist from suspended payments, and underlying stock value (mainly).

The preferred market are largely based in financial institutions and real-estate , so their is inherent risk should the financial's and real-estate markets continue to have turmoil. 2009 was a particularly good year for the recovery of many bank stocks, and even some REIT's... This is reflected in the returns of the S&P U.S. Preferred Stock Index.

There is an ETF that tracks the S&P U.S. Preferred Stock Index (PFF) and one that tracks the Wachovia Hybrid & Preferred Securities Financial Index (PGX)

PFF - iShares S&P U.S. Preferred Stock Index Fund
PGX - PowerShares Financial Preferred Portfolio

For 2009 PFF returned 31.68% plus an 8.58% dividend, while PGX returned 23.75% plus a 9.06% dividend. I consider both of these to be good options for some fixed income with a much higher return than standard bind funds, albeit with higher risk too.