The iShares Preferred and Income Securities ETF (PFF) and the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) are both among the Top 100 ETFs. PFF is a iShares Preferred Stock fund and MINT is a PIMCO Ultrashort Bond fund. So, what’s the difference between PFF and MINT? And which fund is better?
The expense ratio of PFF is 0.10 percentage points higher than MINT’s (0.46% vs. 0.36%). PFF also has a high exposure to the utilities sector while MINT is mostly comprised of Others bonds. Overall, PFF has provided higher returns than MINT over the past 10 years.
In this article, we’ll compare PFF vs. MINT. We’ll look at portfolio growth and risk metrics, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss PFF’s and MINT’s holdings, fund composition, and performance and examine how these affect their overall returns.
|Name||iShares Preferred and Income Securities ETF||PIMCO Enhanced Short Maturity Active Exchange-Traded Fund|
|Category||Preferred Stock||Ultrashort Bond|
The iShares Preferred and Income Securities ETF (PFF) is a Preferred Stock fund that is issued by iShares. It currently has 19.8B total assets under management and has yielded an average annual return of 6.90% over the past 10 years. The fund has a dividend yield of 4.47% with an expense ratio of 0.46%.
The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) is a Ultrashort Bond fund that is issued by PIMCO. It currently has 14.02B total assets under management and has yielded an average annual return of 1.52% over the past 10 years. The fund has a dividend yield of 0.56% with an expense ratio of 0.36%.
PFF’s dividend yield is 3.91% higher than that of MINT (4.47% vs. 0.56%). Also, PFF yielded on average 5.38% more per year over the past decade (6.90% vs. 1.52%). The expense ratio of PFF is 0.10 percentage points higher than MINT’s (0.46% vs. 0.36%).
|Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A||2.54%|
|BlackRock Cash Funds Treasury SL Agency||2.3%|
|Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-||1.79%|
|Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-||1.49%|
|ArcelorMittal S.A. 5.5%||1.36%|
|Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A||1.35%|
|Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B||1.14%|
|NextEra Energy Inc Unit||1.12%|
|Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4||1.08%|
|Avantor Inc Ser A||0.99%|
PFF’s Top Holdings are Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A, BlackRock Cash Funds Treasury SL Agency, Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-, Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-, and ArcelorMittal S.A. 5.5% at 2.54%, 2.3%, 1.79%, 1.49%, and 1.36%.
Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A (1.35%), Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B (1.14%), and NextEra Energy Inc Unit (1.12%) have a slightly smaller but still significant weight. Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4 and Avantor Inc Ser A are also represented in the PFF’s holdings at 1.08% and 0.99%.
|MINT Bond Sectors||Weight|
MINT’s Top Bond Sectors are ratings of Others, Below B, B, BB, and BBB at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards A (0.0%), AA (0.0%), and AAA (0.0%) rated bonds.
The iShares Preferred and Income Securities ETF (PFF) has a Sharpe Ratio of 0.72 with a R-squared of 9.39 and a Treynor Ratio of 6.79. Its Mean Return is 0.52 while PFF’s Alpha is 3.45. Furthermore, the fund has a Standard Deviation of 7.87 and a Beta of 0.81.
The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) has a Treynor Ratio of 10.8 with a Standard Deviation of 1.08 and a R-squared of 4.7. Its Sharpe Ratio is 0.78 while MINT’s Beta is 0.08. Furthermore, the fund has a Mean Return of 0.12 and a Alpha of 0.62.
PFF’s Mean Return is 0.40 points higher than that of MINT and its R-squared is 4.69 points higher. With a Standard Deviation of 7.87, PFF is slightly more volatile than MINT. The Alpha and Beta of PFF are 2.83 points higher and 0.73 points higher than MINT’s Alpha and Beta.
PFF had its best year in 2012 with an annual return of 18.25%. PFF’s worst year over the past decade yielded -4.77% and occurred in 2018. In most years the iShares Preferred and Income Securities ETF provided moderate returns such as in 2015, 2020, and 2017 where annual returns amounted to 4.62%, 7.94%, and 8.33% respectively.
The year 2019 was the strongest year for MINT, returning 3.3% on an annual basis. The poorest year for MINT in the last ten years was 2011, with a yield of 0.42%. Most years the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund has given investors modest returns, such as in 2020, 2018, and 2010, when gains were 1.63%, 1.72%, and 1.72% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in PFF would have resulted in a final balance of $17,789. This is a profit of $7,789 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.90%.
With a $10,000 investment in MINT, the end total would have been $11,624. This equates to a $1,624 profit over 10 years and a compound annual growth rate (CAGR) of 1.52%.
PFF’s CAGR is 5.38 percentage points higher than that of MINT and as a result, would have yielded $6,165 more on a $10,000 investment. Thus, PFF outperformed MINT by 5.38% annually.
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