One asset class that has reared its ugly head again is the preferred market. While the credit markets seem to have stabilized a bit, preferreds have gotten crushed over the past couple of weeks. As shown below, the ETF that tracks an index of all preferred stocks in the US (PFF) has dropped sharply from its recent peak, falling 27% since January 6th. The ETF that specifically tracks financial sector preferreds (PGF) has not surprisingly gotten hit even harder. PGF has fallen all the way back down to its November lows, and it is down 36.5% since January 6th. Unfortunately, the November lows are now a not-too-distant memory for preferred holders.
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