Decreased confidence in iShares Preferred&Income Securities ETF's prospects relative to its Morningstar Category peers results in  a downgrade in this strategy's Morningstar Medalist Rating to Bronze from Gold. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective approach earns an Above Average Process Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

iShares Preferred&Income Securities ETF earns an Above Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. The most substantial contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 55% also strengthens the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their noteworthy success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is: 

The investment seeks to track the investment results of the ICE Exchange-Listed Preferred & Hybrid Securities Index, which measures the performance of a select group of exchange-listed, U.S. dollar-denominated preferred securities, and hybrid securities and convertible preferred securities listed on the NYSE or NASDAQ.  The fund may invest at least 80% of its assets in the component securities of its underlying index and in investments that have economic characteristics that are substantially identical to the component securities of its underlying index.  

 This strategy's 12-month yield is 6.3%, higher than its average peer's 5.9%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 6.4%. Typically, higher yields come at the cost of higher credit risk.

Above Average

Process

iShares Preferred&Income Securities ETF's strong equity team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Greg Savage, Jennifer Hsui, Paul Whitehead. The team is well equipped, with an average of 18 years of portfolio management experience. Together, they manage a total of 258 strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Preferred and Income Securities ETF 

PFF tracks an index of preferred stock traded on the NYSE and NASDAQ. Securities are selected by rules-based, proprietary methods and weighted by market value.

My quest for yield continues with the current stop the iShares Preferred and Income Securities ETF. The yield of under 5% at first glance is not very impressive.

PFF: Thumbs Down On iShares Preferred And Income Securities ETF

In order to diversify one's portfolio, an investment in a preferred stock ETF like PFF makes sense. In this case, bond investors are reminded that this is a volatile asset class due to strong correlation with the stock market.

iShares Preferred And Income Securities ETF: Reasonably Bullish

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Shaw Communications

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Mortgage REITs are putting on a massive rally over the last week or two. That's great as several have been severely undervalued. It wasn't that long ago that we had almost nothing but bullish ratings. Today, we have several lower ratings.

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The shopping center REIT subsector had an outstanding rally today. Many REITs rallied at least 15%, and several rallied more than 35%. That's amazing. Investors are hoping the new vaccine, in addition to preventing COVID-19, can also prevent stupid decisions from retail tenants and restore crippled retailer balance sheets.

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News for iShares Preferred and Income Securities ETF ETF (PFF)