ETF Report: FIRST TRUST INSTITUTIONAL PREFERRED SECURITIES AND INCOME ETF (FPEI)

What this ETF is trying to do

The FPEI ETF focuses on providing income to investors. It does this by investing in preferred securities. These are types of investments that often pay regular money to the people who own them.

What the numbers show

As of July 16, 2026, the current price of one share is $19.26. Looking back at the last year, the price has grown by about 1.47%. However, when you include the extra money paid out to investors, the "total return" for the year was much higher at 7.46%.

To see how prices change, let's look at a simple example. Imagine you invested $10,000 into this ETF one year ago when the estimated price was about $18.98 per share. If you only looked at the share price, your $10,000 would have grown slightly because the price went up to $19.26.

Income and distribution explanation

This ETF is designed to pay out money regularly. Over the last 12 months, it paid out a total of $1.1052 per share. The "distribution yield" is 5.73%, which tells you how much income the ETF pays relative to its price.

The payments usually happen every month, most often on a Thursday. In the last year, there were 12 total payouts. It is important to remember that a high yield alone can be misleading. A very high yield might look good, but if the share price is dropping quickly, you could lose more money in value than you gain in income.

NAV erosion explanation

"NAV erosion" happens when the value of the underlying investments drops so much that the ETF's share price keeps falling over time. This can destroy your "principal," which is the original money you put in. If an ETF's price collapses, you might get high payments, but your total account balance will shrink.

For FPEI, there is no severe erosion. The data shows a "good" score with no price erosion detected.

Pros

• It provides regular monthly income.

• The total return over three years has been strong at 34.32%.

• The share price has stayed stable rather than crashing.

Cons

• The year-to-date price return is slightly negative at -0.67%, meaning the share price has dipped a little bit recently.

Beginner takeaway

Income investors usually prefer ETFs that go sideways (stay at the same price) or move slightly up. They prefer this because it means their original investment stays safe while they collect the payments. Because FPEI has not shown signs of severe erosion, its price has remained relatively steady while providing a 5.73% yield.