PSK provides broad exposure to preferred stocks in a viable wrapper. The fund will also include securities that are functionally equivalent to preferred stocks, such as depositary preferred securities, perpetual subordinated debt, and certain securities issued by banks and other financial institutions that are eligible for capital treatment similar to other preferred stock. The fund limits any single issue or issuer to a 5% weighting, thus limiting the weighting to big issuers that dominate the sector. As a result, PSK has a bit less exposure to heavyweights compared to some peers. Still, the effects are limited, as some issuers still dominate the portfolio. Investment-grade credits also play a leading role, but the fund does have high-yield exposure too.
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