Are you a fated pair with this fund? Maybe! But the income it provides is generous. No need for backroom deals or blood oaths, you can buy this income on the stock market easily. Discover the love of income, and you'll be rolling in dividends.
A penny for your thoughts? Oh, no! We don't make 'em anymore! As you age, you make fewer cents, and need more dollars to live. Your retirement needs cash flow; how do you plan to generate it?
I rate PFFA a sell despite its high yield and peer outperformance, as I see limited opportunity and elevated risks at current levels. PFFA's 2024 distributions weren't covered by cash flow, relying on leverage and realized gains—unsustainable if market conditions worsen. Leverage amplifies both returns and losses, making PFFA especially vulnerable during market panics and contributing to long-term NAV erosion.
Virtus InfraCap U.S. Preferred Stock ETF offers a compelling near 10% dividend yield, making it attractive for income-focused investors seeking preferred stock exposure. The ETF invests primarily in preferred shares, which are generally lower risk than common stocks and provide more stable, fixed payouts. PFFA's portfolio is diversified across several sectors, but has significant exposure to financials and real estate, which could pose risks in sector downturns.
I love preferential treatment when it comes to my income – it must arrive quickly and timely. I don't need it in daily life, but I prefer my income to come quickly. Your retirement needs income solutions, this is for you.
What are the reasons for PFFA's under-performance since inception failing to recover post-COVID despite broader market rallies? Placing PFFA's financial statements under a microscope raises questions about its income-generating promise. The fund's heavy exposure to junk-grade financials and REITs, coupled with leverage, increases the possibility of further degradation in the coming years.
Virtus InfraCap U.S. Preferred Stock ETF's quality holdings and stable distributions make it a strong buy, especially given the recent market dip. The fund's construction involves investing in high-quality U.S. preferred stocks, offering solid income with low volatility. PFFA has maintained consistent dividends, even during market turmoil, and uses conservative leverage to boost income.
PFFA has declined by ~10% since the start of this year. While the drop is not as big as for the S&P 500, it is still quite notable given the underlying fundamentals. Given this decline, I think it would be fair to say that many income investors have started to question PFFA's dividend sustainability.
Preferred equities have dipped lately as the Fed delayed rate cuts, creating a persistent opportunity. Earn 10% without the risk of common equity cuts. Your portfolio needs a layer of stable income generation; PFFA is a key pick.
Active ETFs often face criticism for high fees, but Virtus InfraCap U.S. Preferred Stock ETF (PFFA), with an AUM of $1.50B, stands out despite its 2.52% annual expense ratio. Investing in preferred stocks offers strong returns—currently above 9%—but comes with unpredictable capital fluctuations due to volatile interest rate expectations. An active approach could better manage depreciation risk and Yield to Call (YTC), as demonstrated by performance.
PFFA's portfolio is filled with low-quality, high-yield preferred stocks, with only 5% investment-grade securities, exposing investors to significant credit risk. Investors may not be getting the full picture about the fund's actual risk-adjusted performance due to its use of leverage and low credit ratings. PFFA's active management strategy appears flawed. It holds numerous losing positions and fails to capitalize on market inefficiencies, contradicting the market perception of generating alpha.
Virtus InfraCap U.S. Preferred Stock ETF (PFFA) is an actively managed income ETF focusing on preferred stocks. I initially declined to rate PFFA Buy due to limited upside and leverage risks but believe the general picture improved. Rate cuts have since been inaugurated by the Fed, which should help PFFA's income and NAV going forward.