(FPFD) Fidelity Preferred - Ratings and Ratios

The Fidelity Preferred Securities & Inc ETF (BATS:FPFD) is an exchange-traded fund that focuses on investing in preferred securities and other income-generating assets, with a minimum of 80% of its assets allocated to these securities. The funds investment strategy encompasses a broad range of preferred securities, including contingent convertible securities and corporate hybrid securities, providing a diversified exposure to the preferred stock market.

The funds investment approach is centered on securities that are rated at least BB by S&P or Ba by Moodys, or those considered to be of comparable quality by Fidelity Management & Research (FMR) if they are unrated. This indicates a focus on higher-yielding, potentially higher-risk investments. Being a non-diversified fund, FPFD may have a more concentrated portfolio, which can result in higher volatility.

Analyzing the funds technical data, we observe that the last price is $21.37, slightly above both its 20-day and 50-day simple moving averages (SMA20 and SMA50), indicating a short-term uptrend. However, the price is marginally below its 200-day simple moving average (SMA200), suggesting a potential long-term downtrend. The Average True Range (ATR) is $0.11, or 0.54%, indicating relatively low volatility. Given the current price is near the 52-week high of $21.76 and significantly above the 52-week low of $20.34, the fund appears to be in a consolidation phase.

Considering the fundamental data, the Assets Under Management (AUM) stand at $54.85 million, indicating a relatively small but still viable fund. The preferred stock category, to which FPFD belongs, is often sensitive to interest rate changes and credit quality. Given the current economic environment, if interest rates stabilize or decrease, and credit conditions remain favorable, FPFD could potentially benefit from its focus on higher-yielding preferred securities.

Forecasting the future performance of FPFD involves analyzing both its technical and fundamental data. If the fund continues to consolidate near its current price and the overall economic conditions support the preferred stock market, we might see a gradual increase towards the 52-week high. A break above $21.76 could signal further upside potential, potentially targeting new highs. Conversely, a decline below the SMA200 at $21.33 could indicate a return to the lower end of its 52-week range. Therefore, investors should closely monitor interest rate decisions, credit market conditions, and the funds technical levels for future direction.