ETF Evaluator: First Trust Preferred Sec & Inc ETF () Follow This ETF

First Trust Preferred Sec & Inc ETF Overview

First Trust Preferred Sec & Inc ETF (FPE) is an actively managed Taxable Bond Preferred Stock exchange-traded fund (ETF). First Trust launched the ETF in 2013.

The investment seeks total return and to provide current income. Under normal market conditions, the fund invests at least 80% of its net assets (including investment borrowings) in preferred securities ("Preferred Securities") and income-producing debt securities ("Income Securities"). The fund invests in securities that are traded over-the-counter or listed on an exchange.

About First Trust Preferred Sec & Inc ETF (FPE)

There are 3 members of the management team with an average tenure of 8.10 years: Robert Wolf (2013), Eric Weaver (2020) and Angelo Graci (2022). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 2 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 100% and ICE BofA US IG Inst Captl TR USD index with a weighting of 100%. First Trust Preferred Sec & Inc ETF has 261 securities in its portfolio. The top 10 holdings constitute 15.0% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

First Trust Preferred Sec & Inc ETF is part of the Hybrid Securities global asset class and is within the Taxable Bond ETF group. First Trust Preferred Sec & Inc ETF has 36.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 48.7% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 49.8% (13.1% domestic bond, 36.7% foreign bond and 1.0% convertible bond). First Trust Preferred Sec & Inc ETF has 0.5% of the portfolio in cash.

Assets Under Management

The fund has $6 billion in total assets, which is above the $1 billion average for the Preferred Stock category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

FPE Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The First Trust Preferred Sec & Inc ETF expense ratio is high compared to funds in the Preferred Stock category. First Trust Preferred Sec & Inc ETF has an expense ratio of 0.83%, which is 43% higher than its category average, making the fund expense ratio grade a F. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. First Trust Preferred Sec & Inc ETF has a portfolio turnover rate of 42%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 38% for the Preferred Stock category.

Recently, in the month of July 2026, First Trust Preferred Sec & Inc ETF returned -0.1%, which earned it a grade of B, as the Preferred Stock category had an average return of -0.0%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

First Trust Preferred Sec & Inc ETF has a trailing yield of 6.01%, which is below the 6.18% category average. The fund normally distributes its income monthly.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

First Trust Preferred Sec & Inc ETF Grades

Year to date, the ETF has returned 0.7%, 0.6 percentage points worse than the category, which translates into a grade of F. The fund has returned 5.2% over the past year (grade of B), 9.0% over the past three years (grade of A) and 2.7% per year over the past five years (grade of B) and 4.7% per year over the past 10 years (grade of A).

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