Playing a Preferred Financial ETF

PowerShares Capital Management just listed the PowerShares Financial Preferred Portfolio(PGF Quote).

Although it might be tough to say the name 10 times fast, the concept is simple to grasp: The exchange-traded fund owns preferred stocks from financial companies, both foreign and domestic, that all qualify for the 15% qualified tax rate.

I've lately received some questions and comments from readers regarding how to structure the fixed-income portion of a portfolio. Most investors have some allocation to fixed income but do not spend enough time managing it.

One part of the puzzle that I like and use for clients is preferred stock. Many preferreds are on the NYSE, so they are easy to trade, and the dynamics are such that they are individual-investor friendly. ...