At a glance
FPEI charges 0.85% a year, the same as the average of the 1 funds most like it. It has $1.93B in assets; it paid 6.64% of its price in distributions over the past 12 months, monthly. Over the past year it returned +0.5% with distributions reinvested (S&P 500: +11.5%); over three years it returned +10.0% a year. At its worst it fell 27.5% in the 2020 crash (S&P 500: 33.7%) and 12.9% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 17 months after the lows. Its ten largest positions make up 17.6% of the fund, out of 174 in all.
The short version
First Trust Institutional Preferred Securities and Income ETF (FPEI) is an actively managed fund. It holds mostly institutional preferred securities and similar hybrid bonds, and most of them are issued by large US, Canadian and European banks. Its main draw is income: a trailing yield of 6.64%, paid monthly, as of October 27, 2026. Its 0.85% expense ratio is high for an ETF and the same as its larger sibling, First Trust Preferred Securities & Income ETF (FPE).
Price history
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FPEI +0.5% 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 | |
|---|---|---|---|---|---|---|
| FPEI official prospectus, to Dec 31, 2025 | — | +9.92% | — | +4.55% | — | +5.05% |
| FPEI price data to Oct 27, 2026 | -0.5% | +0.5% | +10.0% | +3.5% | — | +4.6% |
- Over the year to Oct 27, 2026, FPEI returned +0.5%.
- Its 5-year annualized return was +3.5%.
- In the 2020 COVID crash it fell 27.5% and regained its old high 7.5 months after the low.
- Its worst full calendar year was 2022 (-8.2%); its best was 2019 (+15.8%).
- The deepest fall in its price history was 27.5% (Feb 18, 2020 to Mar 23, 2020), recovered by Nov 6, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -0.5% | — |
| 2025 | +10.4% | +9.92% |
| 2024 | +10.9% | +10.82% |
| 2023 | +6.3% | +6.61% |
| 2022 | -8.2% | -8.34% |
| 2021 | +4.7% | +4.95% |
| 2020 | +7.1% | +6.68% |
| 2019 | +15.8% | +17.32% |
| 2018 | -4.3% | -5.39% |
| 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 27.5% over that stretch · deepest drop along the way 27.5%, back to its old high 7.5 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 12.2% over that stretch · deepest drop along the way 12.9%, back to its old high 17.2 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.9300 | |
| 2025 | $1.1900 | +14.4% |
| 2024 | $1.0400 | +2.0% |
| 2023 | $1.0200 | +10.9% |
| 2022 | $0.9200 | 0.0% |
| 2021 | $0.9200 | -8.0% |
| 2020 | $1.0000 | 0.0% |
| 2019 | $1.0000 | -6.5% |
| 2018 | $1.0700 |
What's inside
As of Jul 31, 2026, the fund held 174 securities; the ten largest made up 17.62% of assets.
| Holding | Weight | |
|---|---|---|
| BANK OF AMERICA CORP Bonds and notes | 2.90% | |
| CREDIT AGRICOLE SA Bonds and notes | 2.02% | |
| CITIGROUP INC Bonds and notes | 1.89% | |
| ING GROEP NV Bonds and notes | 1.73% | |
| BANCO BILBAO VIZCAYA ARGENTARIA SA Bonds and notes | 1.64% | |
| TORONTO DOMINION BANK (THE) Bonds and notes | 1.61% | |
| ENBRIDGE INC Bonds and notes | 1.52% | |
| BANCO SANTANDER SA Bonds and notes | 1.46% | |
| CHARLES SCHWAB CORP (THE) Bonds and notes | 1.44% | |
| BANK OF MONTREAL Bonds and notes | 1.40% | |
| BNP PARIBAS SA Bonds and notes | 1.28% | |
| COMMERZBANK AG Bonds and notes | 1.26% | |
| BNP PARIBAS SA Bonds and notes | 1.24% | |
| HSBC HOLDINGS PLC Bonds and notes | 1.23% | |
| CANADIAN IMPERIAL BANK OF COMMERCE Bonds and notes | 1.22% |
By country
United States 47.9%Canada 16.11%France 9.32%United Kingdom 7.85%Spain 5.69%By issuer
Companies 97.54%US government-sponsored enterprises 0.58%The bonds mature in 36.7 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 $59.5M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.41%, +0.47%, -0.39%.
How it works
FPEI does not track an index. A sub-advisor hired by First Trust picks the holdings. It must keep at least 80% of net assets in institutional preferred securities and income-producing debt. Preferred securities get paid before common stock but after a company's bonds. Institutional preferreds are sold in large lots, often at $1,000 par, and trade over the counter. The fund can also hold retail preferreds, corporate bonds, convertibles and contingent convertibles (CoCos). CoCos are bank securities that can be turned into stock or written down if the bank's capital falls below a set level.
The manager looks at sectors, interest rates and where a security sits among a company's debts. It also studies each issuer's credit, looking for the most attractive relative value. Because most issuers are financial firms, at least 25% of total assets must be in the financial sector. Many holdings are fixed-to-floating: they pay a fixed rate for a period, then a rate that resets with market rates. This can soften the effect of rising rates. Portfolio turnover was 38% in the latest prospectus.
As of July 31, 2026, the fund held 174 positions, and the 10 largest made up 17.62% of assets. The top three were perpetual securities from Bank of America (2.9%), Crédit Agricole (2.0%) and Citigroup (1.9%). Some creations and redemptions are done in cash, which can make the fund less tax-efficient than ETFs that trade in kind.
What it really costs
- FPEI charges 0.85% a year, versus an average of 0.85% for the similar funds below.
In a retirement portfolio
Most of FPEI's return comes from high, monthly income paid by bank-issued preferred and hybrid securities.
FPEI could add monthly income to a portfolio. Its trailing yield was 6.64% as of October 27, 2026. Its price usually moves only modestly, but it can fall hard when people worry about bank credit. In the 2020 COVID crash it fell 27.5% in about a month and took about 7.5 months to recover. In the 2022 bear market it dropped 12.9% and took about 17 months to get back. Its worst calendar year in the prospectus was 2022, at -8.34%. Selling shares in slumps like these would lock in losses. The fund launched in August 2017, so it has no record from the 2008 financial crisis. The 0.85% expense ratio also takes a noticeable bite out of the income. Past results don't predict future ones, 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 payouts; the trailing yield was 6.64% as of October 27, 2026.
- Investors who want an active manager picking $1,000-par institutional preferreds, which are normally sold in large lots to institutions.
- Those comfortable with heavy exposure to big global banks such as Bank of America, Citigroup, BNP Paribas and HSBC in exchange for higher income.
Look elsewhere if
- Cost-conscious investors: the 0.85% expense ratio is high for an ETF and matches FPE, its closest similar fund.
- Anyone who needs stable value in a crisis; the fund fell 27.5% in early 2020 and 12.9% in 2022.
- Investors who want sector variety; at least 25% must be in financials, and CoCos can be written down if a bank's capital falls.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FPEI this fund | — | 0.85% | $1.93B | +0.5% | +10.0% |
| FPE First Trust Preferred Securities & Income E… | 65% | 0.85% | $6.32B | -2.0% | +9.5% |
Questions investors ask
Does FPEI pay monthly dividends?
Yes. FPEI pays distributions monthly. Over the 12 months to October 27, 2026, it paid about $1.22 per share, a trailing yield of 6.64%. The income comes from interest and dividends on the fund's preferred and hybrid securities, which pay fixed or adjustable rates. Payments can change from month to month. If issuers call securities or skip payments, the fund's income can drop.
What's the difference between FPEI and FPE?
They are close cousins. Both are actively managed First Trust preferred ETFs with 0.85% expense ratios, and about 65% of their holdings overlapped in the July 31, 2026 reports. FPEI's prospectus focuses on institutional, $1,000-par preferreds. FPE is much larger, with about $6.3 billion in net assets against FPEI's $1.9 billion. As of October 27, 2026, FPEI returned 0.5% over one year against FPE's -2%, and about 10% a year over three years against 9.5%.
Is FPEI good for retirement income?
FPEI may suit retirees who want monthly income and can live with bank-related risk. Its trailing yield was 6.64% as of October 27, 2026. As of December 31, 2025, its official average annual returns were 9.92% over one year, 4.55% over five years and 5.05% since its 2017 launch. Drawbacks include a 0.85% fee, a big tilt toward financials and sharp drops in credit scares.
How much can FPEI lose in a downturn?
More than its usual calm suggests. In the 2020 COVID crash, FPEI fell 27.5% between February and March and took about 7.5 months to recover. Its worst quarter in the prospectus was a 14.95% loss in the first quarter of 2020. In 2022, rising rates pushed it down 12.9% from peak to low, and it took about 17 months to recover. Its 2022 calendar-year return was -8.34%.
What is FPEI's expense ratio?
FPEI's expense ratio is 0.85%, according to the prospectus filed February 27, 2026. All of it is the management fee, and there is no fee waiver. That is the same as the 0.85% average for similar funds and matches First Trust's FPE. It is still high compared with index-based ETFs. The cost comes straight out of the fund's returns, so it eats into the income.