• PGF holds 28 securities.
• The top ten holdings as of January 3, 2008, are Aegon 6.375%; Perpetual Preferred; Royal Bank of Scotland Preferred series N, M, and S; ING Perpetual Hybrid 6.375%; HSBC Holdings A 1/40PF A; Goldman Sachs Preferred 1/1000 B; Barclays Bank Preferred 2; Metlife Preferred B 6.50%; and Bank of America 1/1000 D 6.204%.
• The ten securities comprise approximately 46% of the portfolio. See all of PGF's holdings.

Readers should read more about the security at PowerShares website.

Digging deeper into the makeup of the index, I learned that PGF tracks the Wachovia Hybrid & Preferred Securities Financial Index (WHPS Financial Index).

• The index tracks the performance of U.S. listed preferred stocks of preferred stocks issued in the U.S. market by financial institutions, and
• It currently includes approximately 30 securities selected by Wachovia pursuant to a proprietary selection methodology.
• The index is market-cap weighted index.
• The index is rebalanced monthly.

Investors should weigh the risks of holding preferred stocks, which are somewhere in between owning bonds and equities. Particularly in precarious times like these, preferreds have been trading down and may do so for some time. This is a way for me to get some yields when money market instruments, CDs and even corporate bonds aren't providing a whole lot. The PGF just makes buying a basket of preferreds a whole lot easier.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author does not hold a position in PGF.