PREF vs. IG

Last updated Jun 4, 2026

PREF (Principal Spectrum Preferred Secs Active ETF) and IG (Principal Investment Grade Corporate Active ETF) are both exchange-traded funds - PREF is a Preferred Stock/Convertible Bonds fund actively managed by Principal, while IG is a Corporate Bonds fund actively managed by Principal. Both are actively managed. A 0.77 correlation means they provide meaningful diversification when combined. PREF charges 0.55%/yr vs 0.26%/yr for IG.

Performance

PREF vs. IG - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Principal Spectrum Preferred Secs Active ETF (PREF) and Principal Investment Grade Corporate Active ETF (IG). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

PREF

• 1D: -0.13%
• 1M: 0.52%
• YTD: 1.65%
• 6M: 2.32%
• 1Y: 6.65%
• 3Y*: 9.25%
• 5Y*: 3.07%
• 10Y*: —

IG

• 1D: -0.23%
• 1M: 0.57%
• YTD: —
• 6M: —
• 1Y: —
• 3Y*: —
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

PREF vs. IG - Yearly Performance Comparison

	2026 (YTD)
PREF Principal Spectrum Preferred Secs Active ETF	0.34%
IG Principal Investment Grade Corporate Active ETF	-0.22%

Correlation

The correlation between PREF and IG is 0.77, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (All Time) Calculated using the full available price history since Apr 23, 2026	0.77

PREF vs. IG - Sectors Allocation Comparison

Sectors	PREF	IG
Financial Services	100.0%	2.9%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Industrials	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

PREF vs. IG — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

PREF

PREF Risk / Return Rank: 64
PREF Sharpe Ratio Rank: 64
PREF Sortino Ratio Rank: 67
PREF Omega Ratio Rank: 75
PREF Calmar Ratio Rank: 46
PREF Martin Ratio Rank: 66

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

PREF vs. IG - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Principal Spectrum Preferred Secs Active ETF (PREF) and Principal Investment Grade Corporate Active ETF (IG). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	PREF	IG	Difference
Sharpe ratio: Return per unit of total volatility	2.16	—	—
Sortino ratio: Return per unit of downside risk	3.10	—	—
Omega ratio: Gain probability vs. loss probability	1.45	—	—
Calmar ratio: Return relative to maximum drawdown	2.32	—	—
Martin ratio: Return relative to average drawdown	12.09	—	—
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

Sharpe Ratios by Period

	PREF	IG	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.16	—	—
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.63	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.66	-0.40	+1.06

Drawdowns

PREF vs. IG - Drawdown Comparison

The maximum PREF drawdown since its inception was -22.99%, which is greater than IG's maximum drawdown of -1.75%. Use the drawdown chart below to compare losses from any high point for PREF and IG.

Drawdown Indicators

	PREF	IG	Difference
Max Drawdown Largest peak-to-trough decline	-22.99%	-1.75%	-21.24%
Max Drawdown (1Y) Largest decline over 1 year	-2.88%	—	—
Max Drawdown (3Y) Largest decline over 3 years	-4.39%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-16.99%	—	—
Current Drawdown Current decline from peak	-0.13%	-0.32%	+0.19%
Average Drawdown Average peak-to-trough decline	-3.66%	-0.53%	-3.13%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.55%	—	—

Volatility

Volatility by Period

	PREF	IG	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.69%	—	—
Volatility (6M) Calculated over the trailing 6-month period	2.51%	—	—
Volatility (1Y) Calculated over the trailing 1-year period	3.09%	4.90%	-1.81%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	4.87%	4.90%	-0.03%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.30%	4.90%	+1.40%

PREF vs. IG - Expense Ratio Comparison

PREF has a 0.55% expense ratio, which is higher than IG's 0.26% expense ratio.

Dividends

PREF vs. IG - Dividend Comparison

PREF's dividend yield for the trailing twelve months is around 5.16%, more than IG's 0.84% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017
IG Principal Investment Grade Corporate Active ETF	0.84%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
PREF Principal Spectrum Preferred Secs Active ETF	5.16%	4.87%	4.65%	4.67%	4.63%	4.07%	4.35%	4.67%	5.49%	2.35%

Frequently Asked Questions

Can I hold both PREF and IG in my portfolio?

PREF and IG have a correlation of 0.77, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which ETF is better, PREF or IG?

On fees, IG is cheaper at 0.26% per year. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF is cheaper, PREF or IG?

IG is cheaper with a 0.26% expense ratio, compared with 0.55% for PREF.

Which ETF pays a higher dividend yield, PREF or IG?

PREF has the higher dividend yield at 5.16%, compared with 0.84% for IG.

What is the main difference between PREF and IG?

PREF is categorized as Preferred Stock/Convertible Bonds, while IG is Corporate Bonds. Their fees differ too: 0.55% for PREF and 0.26% for IG.