Investors seeking momentum may have Invesco Variable Rate Preferred ETF (VRP - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of VRP are up approximately 12.7% from their 52-week low of $23.38/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
VRP in Focus
The underlying Wells Fargo Hybrid and Preferred Securities Floating and Variable Rate Index is a market capitalization-weighted index designed to track the performance of preferred stock, as well as certain types of hybrid securities that are functionally equivalent to preferred stock, that are issued by US-based or foreign issuers and that pay a floating or variable rate dividend or coupon. The expense ratio is 0.50%.
Why the move?
In its latest meeting, the Feddeclared that it expects inflation to jump to 3.4% this year, higher than its previous forecast of 2.4%. The Fed’s PCE inflation expectation has gone up to 2.1% for 2022 from 2% projected in March and to 2.2% for 2022 (from 2.1%). This has flared up the talks for faster-than-expected rate hike.
No wonder, investors would look for ways that offer solid current income or benchmark-beating income. VRP is one such option, which yields as high as 4.19% in the current low-rate environment. Investors should note that preferred ETFs are generally great options for higher current income.
More Gains Ahead?
The fund has a positive weighted alpha of 10.63. So, there is a decent outlook ahead for those who want to ride this surging ETF a shade further.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Investors seeking momentum may have Invesco Variable Rate Preferred ETF (VRP - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of VRP are up approximately 12.7% from their 52-week low of $23.38/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
VRP in Focus
The underlying Wells Fargo Hybrid and Preferred Securities Floating and Variable Rate Index is a market capitalization-weighted index designed to track the performance of preferred stock, as well as certain types of hybrid securities that are functionally equivalent to preferred stock, that are issued by US-based or foreign issuers and that pay a floating or variable rate dividend or coupon. The expense ratio is 0.50%.
Why the move?
In its latest meeting, the Feddeclared that it expects inflation to jump to 3.4% this year, higher than its previous forecast of 2.4%. The Fed’s PCE inflation expectation has gone up to 2.1% for 2022 from 2% projected in March and to 2.2% for 2022 (from 2.1%). This has flared up the talks for faster-than-expected rate hike.
No wonder, investors would look for ways that offer solid current income or benchmark-beating income. VRP is one such option, which yields as high as 4.19% in the current low-rate environment. Investors should note that preferred ETFs are generally great options for higher current income.
More Gains Ahead?
The fund has a positive weighted alpha of 10.63. So, there is a decent outlook ahead for those who want to ride this surging ETF a shade further.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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