(PREF) Principal Spectrum - Ratings and Ratios

The Principal Spectrum Preferred Securities Active ETF (NYSE ARCA:PREF) is an actively managed exchange-traded fund that focuses on investing in preferred securities, which include preferred stock, depositary receipts, and junior subordinated debt. The funds investment strategy is centered around the financial services sector, with a significant concentration of its assets allocated to this industry.

By investing at least 80% of its net assets in preferred securities, the fund aims to provide a stable source of income through dividend payments. The financial services sector, which includes banks, insurance companies, and other financial institutions, is a significant beneficiary of the funds investment strategy. This concentration can be beneficial in a rising interest rate environment, as financial institutions tend to perform well under such conditions.

From a technical analysis perspective, the funds price action suggests a bullish trend, with the short-term and long-term moving averages (SMA20, SMA50, and SMA200) indicating a gradual upward momentum. The Average True Range (ATR) of 0.06, representing a 0.31% daily price movement, implies a relatively stable trading environment. Given the current price of $18.80, which is near the 52-week high, we can expect a potential consolidation or a slight pullback before the next upward move.

Combining the technical analysis with the fundamental data, we can forecast that the PREF ETF will continue to benefit from its concentrated investment in the financial services sector. With an Assets Under Management (AUM) of $1.179 billion, the fund has a significant presence in the market, which can contribute to its liquidity and stability. As interest rates continue to fluctuate, the funds focus on preferred securities and the financial services sector is likely to provide a relatively stable source of returns. Our forecast suggests that the PREF ETF will maintain its upward trajectory, potentially reaching $19.20 in the next 6-12 months, driven by a combination of its investment strategy and favorable market conditions.