Invesco Variable Rate Preferred ETF

Invesco Variable Rate Preferred ETF (VRP) tracks the ICE Variable Rate Preferred & Hybrid Securities Index. The index holds floating- and variable-rate preferred stocks and similar hybrid securities, with heavy exposure to big banks. These payouts reset with interest rates, so the holdings tend to react less to rate changes than fixed-rate preferreds. VRP pays monthly, with a 5.88% trailing yield as of October 27, 2026. It costs 0.50% a year, above the 0.39% average of similar funds.

• Over the year to Oct 27, 2026, VRP returned +1.4%, 1st of 3 among similar funds.
• Its 5-year annualized return was +3.9%.
• Its worst full calendar year was 2022 (-9.0%); its best was 2024 (+11.1%).
• The deepest fall in its price history was 13.7% (Sep 22, 2021 to Mar 13, 2023), recovered by Jan 10, 2024.

As of May 31, 2026, the fund held 343 securities; the ten largest made up 9.48% of assets, and 5.86% sat in cash and money-market holdings.

By sector

The bonds mature in 33.1 years on average (weighted by size), with an average coupon of 6.35%.

• Over the three months to May 31, 2026, investors added a net $447.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -1.47%, +1.59%, +0.66%.

VRP aims to track the ICE Variable Rate Preferred & Hybrid Securities Index, which ICE Data Indices compiles. A security joins the index only if it is publicly issued and US-registered (or exempt), priced in US dollars, issued in $25 or $1,000 par amounts, had at least 18 months to maturity when issued, and pays a floating or variable rate. It must also pass liquidity and trading-volume tests. Fixed-to-floating securities count too: they pay a set rate at first, then switch to a floating rate. The index weights holdings by market value, so bigger issues count for more.

Invesco puts at least 90% of assets into index securities and related American depositary receipts (ADRs, US-traded shares of foreign companies). It uses "sampling": it holds a representative slice of the index rather than every security. As of October 31, 2025, the index had 321 securities. The fund is "non-diversified," so it can hold larger stakes in fewer issuers. It concentrates in an industry only when the index does, and it had significant exposure to financials as of August 31, 2025. Portfolio turnover was 20%.

Preferreds rank ahead of common stock but behind a company's debt. Hybrid issuers can defer dividends and extend maturities. As of May 31, 2026, the fund held no derivatives. Its filing classed 85% of assets as bonds and notes and 13% as preferred stock, with about 6% in cash.

• VRP charges 0.5% a year, versus an average of 0.39% for the similar funds below (2nd of 3, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $629 over 10 years (assuming a 5% annual return).

VRP's main draw is monthly income from floating-rate preferreds and hybrids, not growth.

VRP can add monthly income that has moved only loosely with stocks: its one-year beta, a measure of how much it moves with the market, was 0.14 as of October 27, 2026. It still falls in a crisis. It launched in 2014, after the 2008 crash. Its worst quarter was a 15.09% loss in early 2020. Its worst calendar year was 2022, at −9.11%. In 2022 it fell 12.8% between January and June and didn't regain that peak until December 2023. A retiree who had to sell shares then would have taken losses.

The trailing yield was 5.88% as of October 27, 2026, paid monthly. Payouts can change when rates reset, and issuers can defer them. The fund costs 0.50% a year: $51 in the first year on $10,000, using the SEC's standard example. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).