Fidelity Preferred Securities & Income ETF

Fidelity Preferred Securities & Income ETF (FPFD) is an actively managed fund. It holds about 330 preferred stocks and hybrid bonds, mostly issued by banks, pipeline companies and utilities. It pays income monthly, and its trailing yield was 5.68% as of October 27, 2026. Its 0.59% expense ratio is well below the 0.85% that First Trust charges for its preferred ETFs. However, FPFD is much smaller, and its returns have trailed those funds.

• Over the year to Oct 27, 2026, FPFD returned -3.1%, 6th of 6 among similar funds.
• Its 5-year annualized return was +0.8%.
• Its worst full calendar year was 2022 (-17.1%); its best was 2023 (+11.0%).
• The deepest fall in its price history was 20.8% (Sep 17, 2021 to Oct 24, 2022), recovered by Sep 9, 2024.

As of Aug 31, 2026, the fund held 330 securities; the ten largest made up 17.03% of assets, and 2.9% sat in cash and money-market holdings.

The bonds mature in 45.4 years on average (weighted by size), with an average coupon of 6.08%.

• Over the three months to Aug 31, 2026, investors withdrew a net $2.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.28%, -0.22%, -0.06%.

FPFD does not track an index. Managers at Fidelity Management & Research Company (FMR) choose each holding by studying the issuer's finances, its industry and the economy. The fund normally puts at least 80% of its assets in preferred securities and other income-producing securities. Preferred securities pay set dividends and rank below a company's bonds but above its common stock. The fund mainly buys securities rated BB or higher. BB is below investment grade, a category also called junk. The fund concentrates in the financial services sector. Even so, as of August 31, 2026, its largest position was an Energy Transfer perpetual preferred at 4.6% of assets.

On that date, preferred stock made up 71% of the fund and bonds and notes 25%. US issuers accounted for 80%, followed by Canada at 6% and Japan at 4%. The 10 largest positions made up 17% of assets. The average time to maturity was 45.4 years, and many holdings have no maturity date at all. Long maturities make prices more sensitive to changes in interest rates.

With no index, there is no rebalancing schedule. The managers trade as their views change, and portfolio turnover was 19%. The fund can hold contingent convertibles. These are bank securities that can be turned into stock or written down if the bank's capital falls too low. It may also create and redeem shares in cash, which can make it less tax-efficient than some ETFs.

• FPFD charges 0.59% a year, versus an average of 0.56% for the similar funds below (4th of 6, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $60 in the first year and $738 over 10 years (assuming a 5% annual return).

FPFD pays monthly income from preferreds and hybrid bonds, but its price swings make it a supplement to a portfolio rather than its core.

FPFD could add a monthly income stream to a retirement portfolio. Its trailing yield was 5.68% as of October 27, 2026. The trade-off is that preferreds behave partly like very long bonds and partly like bank stocks. The fund launched in June 2021, so it has no record in 2008 or 2020. In the 2022 bear market it fell 18.7%. Its deepest drop was 20.8%, from September 2021 to October 2022, and it took about 22.5 months to recover. Anyone who sold shares in late 2022 to cover expenses would have locked in those losses. Its worst calendar year was 2022, at -17.0%.

The 0.59% expense ratio is close to the 0.56% average of similar funds. Under the SEC's standard example, that comes to $60 in the first year on $10,000. Past results don't predict future returns, and an income plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).