At a glance
FPE charges 0.83% a year, above the 0.63% average of the 3 funds most like it (the 3rd cheapest of 4). It has $6.32B in assets, the largest of that group; it paid 6.78% of its price in distributions over the past 12 months, monthly. Over the past year it returned −2.0% with distributions reinvested (S&P 500: +11.5%), the weakest of those 4 funds; over three years it returned +9.5% a year. At its worst it fell 33.3% in the 2020 crash (S&P 500: 33.7%) and 15.5% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 21 months after the lows. Its ten largest positions make up 14.9% of the fund, out of 259 in all.
The short version
First Trust Preferred Securities & Income ETF (FPE) is an actively managed fund. It holds preferred securities and income-paying corporate debt, mostly from banks, insurers and utilities. Its trailing yield was 6.78% as of October 27, 2026, and it pays monthly. Its 0.83% expense ratio is above the 0.63% average of similar funds, and it can put up to 40% of its assets in below-investment-grade securities.
Price history
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FPE -2.0% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FPE official prospectus, to Dec 31, 2025 | — | +9.26% | — | +3.49% | +5.32% | +4.94% |
| FPE price data to Oct 27, 2026 | -2.3% | -2.0% | +9.5% | +2.1% | +4.3% | +4.4% |
- Over the year to Oct 27, 2026, FPE returned -2.0%, 4th of 4 among similar funds.
- Its 5-year annualized return was +2.1% and its 10-year +4.3%.
- In the 2020 COVID crash it fell 33.3% and regained its old high 7.8 months after the low.
- Its worst full calendar year was 2022 (-12.7%); its best was 2019 (+18.2%).
- The deepest fall in its price history was 33.3% (Feb 14, 2020 to Mar 18, 2020), recovered by Nov 9, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -2.3% | — |
| 2025 | +9.6% | +9.26% |
| 2024 | +11.2% | +10.90% |
| 2023 | +6.9% | +6.58% |
| 2022 | -12.7% | -12.38% |
| 2021 | +5.2% | +4.94% |
| 2020 | +6.0% | +6.50% |
| 2019 | +18.2% | +17.57% |
| 2018 | -5.0% | -4.71% |
| 2017 | +11.3% | +11.37% |
| 2016 | +6.3% | +6.46% |
| 2015 | +6.1% | — |
| 2014 | +11.7% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 30.5% over that stretch · deepest drop along the way 33.3%, back to its old high 7.8 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 15.5% over that stretch · deepest drop along the way 15.5%, back to its old high 21 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.8600 | |
| 2025 | $1.1200 | +10.9% |
| 2024 | $1.0100 | -1.9% |
| 2023 | $1.0300 | +7.3% |
| 2022 | $0.9600 | +6.7% |
| 2021 | $0.9000 | -9.1% |
| 2020 | $0.9900 | -7.5% |
| 2019 | $1.0700 | -2.7% |
| 2018 | $1.1000 | +1.9% |
| 2017 | $1.0800 | -4.4% |
| 2016 | $1.1300 | +9.7% |
| 2015 | $1.0300 | -8.8% |
| 2014 | $1.1300 |
What's inside
As of Jul 31, 2026, the fund held 259 securities; the ten largest made up 14.93% of assets.
| Holding | Weight | |
|---|---|---|
| BANK OF AMERICA CORP Bonds and notes | 2.52% | |
| WELLS FARGO & COMPANY Preferred stock | 2.08% | |
| BARCLAYS PLC Bonds and notes | 1.67% | |
| JP MORGAN CHASE & COMPANY Bonds and notes | 1.35% | |
| NEXTERA ENERGY CAPITAL HOLDINGS INC Preferred stock | 1.33% | |
| BNP PARIBAS SA Bonds and notes | 1.26% | |
| XCEL ENERGY INC Preferred stock | 1.23% | |
| CREDIT AGRICOLE SA Bonds and notes | 1.21% | |
| CITIGROUP INC Bonds and notes | 1.20% | |
| HARTFORD INSURANCE GROUP INC (THE) Bonds and notes | 1.09% | |
| CHARLES SCHWAB CORP (THE) Bonds and notes | 1.07% | |
| COREBRIDGE FINANCIAL INC Preferred stock | 1.05% | |
| GOLDMAN SACHS GROUP INC (THE) Bonds and notes | 1.04% | |
| T-MOBILE USA INC Preferred stock | 1.02% | |
| AMERICAN AGCREDIT ACA Bonds and notes | 1.02% |
By country
United States 58.71%Canada 10.59%France 6.92%United Kingdom 6.6%Bermuda 3.58%By issuer
Companies 97.95%US government-sponsored enterprises 0.74%Other registered funds 0.23%The bonds mature in 35.3 years on average (weighted by size), with an average coupon of 6.95%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $62.8M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -0.06%, -0.12%, -0.11%.
How it works
FPE does not track an index. First Trust's sub-advisor picks the holdings and must keep at least 80% of net assets in preferred securities and income-producing debt. It studies single securities (credit quality, call features, maturities, liquidity) and the big picture (sectors, interest rates, where a security ranks in a company's capital structure). It looks for the strongest relative value. Limits on issuer and industry weights keep the portfolio spread out. Portfolio turnover was 42%.
Preferred securities pay fixed or adjustable distributions. They rank ahead of common stock but behind all of a company's debt. Most issuers are financial companies, so at least 25% of assets sit in that sector. As of July 31, 2026, the fund held 259 positions: 71% bonds and notes and 28% preferred stock. The largest were Bank of America and Barclays perpetual securities, which have no maturity date, and a Wells Fargo preferred. About 59% was U.S., with Canada, France and the UK next. The fund may also hold contingent convertibles (CoCos). These bank securities can turn into stock, or have their value written down, if the bank's capital falls below a set level.
At least 60% of net assets must be rated investment grade. Up to 40% can be junk-rated. Average duration, a measure of rate sensitivity, is expected to fall between three and 12 years. A five-year duration means a price drop of about 5% if rates rise 1%.
What it really costs
- FPE charges 0.83% a year, versus an average of 0.63% for the similar funds below (3rd of 4, cheapest first).
In a retirement portfolio
FPE's main appeal is high monthly income from bank, insurer and utility hybrid securities, not stability or growth.
FPE could add a monthly income stream: its trailing yield was 6.78% as of October 27, 2026, at a cost of 0.83% a year, above the 0.63% peer average. It does not behave like a safe bond fund. It launched in 2013, so it has no record from 2008. In the 2020 COVID crash it fell 33.3% in about a month and took nearly eight months to recover. In 2022, as rates rose, it fell 15.5% and needed 21 months to regain its peak. Its worst calendar year was 2022, at −12.38%. A retiree forced to sell shares in a year like that would be selling at a loss.
Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Income-focused investors who want monthly distributions; the trailing yield was 6.78% as of October 27, 2026.
- Investors who prefer a manager actively choosing among bank, insurer and utility hybrid securities over an index-tracking preferred fund.
- Those comfortable with heavy financial-sector exposure and about 41% non-U.S. issuers, including Canadian, French and British banks.
Look elsewhere if
- Cost-conscious investors: FPE's 0.83% expense ratio is above PREF's 0.55% and VRP's 0.50%.
- Anyone who needs steady prices: FPE fell 33.3% in early 2020 and took 21 months to recover from its 2022 decline.
- Investors seeking Treasury-like safety: up to 40% can be junk-rated, and bank CoCos can be written down.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FPE this fund | — | 0.83% | $6.32B | -2.0% | +9.5% |
| FPEI First Trust Institutional Preferred Securit… | 65% | 0.85% | $1.93B | +0.5% | +10.0% |
| PREF Principal Spectrum Preferred Secs Active ETF · different strategy | 23% | 0.55% | $1.77B | +0.6% | +9.0% |
| VRP Invesco Variable Rate Preferred ETF · different strategy | 21% | 0.5% | $3.02B | +1.4% | +9.3% |
Questions investors ask
Does FPE pay monthly dividends?
Yes. FPE pays distributions monthly. Over the 12 months to October 27, 2026, it paid about $1.15 per share, a trailing yield of 6.78%. The payments come from the interest and dividends on its preferred securities and bonds, so the amount can change from month to month. A trailing yield looks backward. It doesn't promise future income, and the share price can fall even while the payments continue.
What's the difference between FPE and FPEI?
They are close siblings. Both are First Trust preferred-and-income funds that follow the same strategy, and their holdings overlapped by 65% in the latest reports. FPEI charges 0.85% against FPE's 0.83%. It is also smaller: about $1.9 billion against $6.3 billion as of July 31, 2026. As of October 27, 2026, FPEI returned 0.5% over one year against FPE's −2%, and 10% a year over three years against FPE's 9.5%.
Is FPE good for retirement income?
It can supply high monthly income, but it carries more risk than a typical bond fund. The trailing yield was 6.78% as of October 27, 2026. However, FPE fell 33.3% in early 2020 and lost 12.38% in calendar 2022. At least 25% of its assets are in financial companies, and up to 40% can be below investment grade. It may suit investors who treat it as one income piece within a broader mix.
What is FPE's expense ratio?
FPE's expense ratio is 0.83%, according to its prospectus filed February 27, 2026. All of it is the management fee, and there is no fee waiver. That is above the 0.63% average of similar funds. FPE ranks third-cheapest of the four funds compared. Principal Spectrum Preferred Securities Active ETF (PREF) charges 0.55% and Invesco Variable Rate Preferred ETF (VRP) charges 0.50%, though both follow different strategies.
How has FPE performed over the long term?
FPE has delivered modest long-term returns with sharp swings along the way. According to its prospectus, it returned 5.32% a year over 10 years, 3.49% over five years and 9.26% over one year, all as of December 31, 2025. Its best year was 2019 (17.57%), and its worst was 2022 (−12.38%), when interest rates rose. Based on price, it was down 2.3% for 2026 through October 27.