S&P Indices has launched the S&P Enhanced Yield North American Preferred Index which tracks 50 of the highest yielding securities in the North American preferred stock market. The Index has been licensed to Global X Funds to serve as the basis for a planned ETF.
The S&P Enhanced Yield North American Preferred Index is comprised of 50 of the highest yielding US and Canada traded preferred stocks that meet criteria relating to size, liquidity and exchange listings. The underlying universe for the Index is all preferred securities in the S&P/TSX Preferred Share Index and S&P US Preferred Stock Index.
The S&P Enhanced Yield North American Preferred Index is comprised of 50 of the highest yielding US and Canada traded preferred stocks that meet criteria relating to size, liquidity and exchange listings. The underlying universe for the Index is all preferred securities in the S&P/TSX Preferred Share Index and S&P US Preferred Stock Index.
Preferred stocks are a class of securities that combine the characteristics of debt and common stocks. While their expected volatility and returns fall between those of common stocks and bonds, their yields are typically higher. With low correlations to common stocks and bonds, they can serve as good diversification instruments. ”The S&P Enhanced Yield North American Preferred Index is an important addition to our closely followed family of preferred stock indices,” says Michael Kondas, Associate Director at S&P Indices. “The Index fills a need in the industry for a more concentrated basket of preferred stocks that could potentially provide greater yields for investors seeking higher investment income.”
“We are very excited to be launching an ETF based upon the S&P Enhanced High Yield North American Preferred Index,” says Bruno del Ama (pictured), CEO at Global X Funds. “S&P Indices is an innovator and leading provider of preferred stock indices, and this index expands their offerings to an important segment of the preferred market.”
Preferred stocks issued by a company to meet its capital or financing requirements are eligible for inclusion to the S&P Enhanced Yield North American Preferred Index. These include floating and fixed rate preferreds, cumulative and non-cumulative preferreds, preferred stocks with a callable or conversion feature and trust preferreds. Preferred stocks with total market capitalisation of more than USD250 million and that have traded a three-month average daily value traded of USD1 million are eligible for inclusion.
