(FPE) First Trust Preferred - Ratings and Ratios

The First Trust Preferred Securities and Income ETF (FPE) is a fixed-income focused exchange-traded fund that primarily invests in preferred securities and income-producing debt securities. Under normal market conditions, the fund allocates at least 80% of its net assets to these securities, which may include both over-the-counter and exchange-listed instruments. Preferred securities typically offer a higher claim on assets and dividends compared to common stocks but rank below bonds in terms of seniority. This structure often provides investors with a relatively stable income stream and lower volatility compared to equity investments. The funds investment strategy is designed to capitalize on the attractive yield characteristics of preferred securities while maintaining a focus on income generation.

From a technical standpoint, FPE has shown a mixed trend over the past 20, 50, and 200 days. The funds last price of $17.36 is slightly above its 20-day SMA of $17.20 but below its 50-day SMA of $17.43. The 200-day SMA of $17.34 suggests a long-term equilibrium price level. The Average True Range (ATR) of 0.13 indicates low volatility, with price fluctuations remaining relatively contained. The funds average daily volume of 1,325,009 shares suggests moderate liquidity, making it accessible for both retail and institutional investors.

Fundamentally, FPE manages substantial assets under management (AUM) of $5.508 billion, indicating a well-established and widely held investment vehicle. This scale often allows for cost efficiencies and consistent tracking of the underlying index. The funds focus on preferred securities and income-producing debt instruments positions it as a yield-oriented investment option, appealing to investors seeking regular income with reduced exposure to equity market volatility.

3-Month Forecast: Based on the current technical and fundamental data, FPE is expected to trade within a narrow range over the next three months. The funds price is likely to oscillate between $17.20 and $17.50, with the 20-day SMA acting as a potential resistance level and the 200-day SMA providing support. The low ATR of 0.13 further reinforces the expectation of muted price movement. From a fundamental perspective, the funds focus on preferred securities may face headwinds if interest rates rise, as this could lead to a decline in the value of fixed-income instruments. However, the funds diversified portfolio and significant AUM are likely to mitigate volatility, ensuring relatively stable performance.