This is an actively managed ETF that selects and holds preferred stocks and hybrid income securities issued by U.S. and international companies. It typically allocates a substantial portion of net assets to preferred stocks and focuses on finding securities that appear undervalued relative to their credit quality.

It is suited to investors seeking steady income from preferred stocks, which sit between equities and bonds.

The ETF is managed by Cohen & Steers using an active management approach.

A team of professional managers selects and holds preferred stocks and income securities that they judge to be undervalued relative to their credit quality and investment characteristics. The fund uses both traditional and hybrid preferred stocks and follows an active strategy that centers on investment-grade and institutional preferred stocks, seeking after-tax income and diversification at the same time.

• Active security selection by a preferred stock specialist manager
• Aims to distribute income monthly

Assets under management (AUM) stand at $372.5M, and the total expense ratio is 0.59% per year.

Compared with passive preferred stock ETFs that simply track an index, the fund has greater management discretion, which brings both a higher fee burden and greater dependence on the manager's performance.

Preferred stock assets are sensitive to the direction of interest rates and changes in credit spreads, so returns have continued to fluctuate along with conditions in the bond market. Because the fund is an income-focused asset, distributions contribute to total return.

Fund flows across the preferred stock category shift with the interest rate environment and demand for income, and actively managed products often belong to the small and mid-sized end of the category relative to comparable passive ETFs. The direction of fund flows may change depending on market conditions.

Its strengths are the managers' preferred stock selection and monthly income, while its weaknesses are the fee burden that comes with active management and sensitivity to interest rates.

Both PFF and FPE, shown in the table, are comparable products in the same preferred stock and income category. PFF is a large passive preferred stock ETF with broad diversification, FPE holds preferred stocks together with other income securities and differs in fees and distribution levels, and PFLD pursues a low-duration preferred stock strategy that reduces duration. In addition, high-yield income ETFs such as PCEF and YYY, which invest in closed-end fund income, can also be considered as alternatives for income purposes.

Here are the points to review before investing in CSPF. Active preferred stock ETFs offer attractive income, but investors should check interest rate sensitivity, management fees, and credit risk in advance.

Rising interest rates and wider credit spreads are the main downside factors for preferred stock prices. Given the nature of active management, there is also a possibility that performance will lag comparable passive products, and the fee burden should be considered as well.

It is a suitable active option for investors seeking income and diversification through preferred stocks. If low cost and broad diversification are the priority, PFF may be an alternative, and if duration management is desired, a product such as PFLD may be an alternative.