PFFA has delivered exceptional total returns, outperforming other preferred stock and fixed income ETFs, driven by active management and leverage. The Federal Reserve's accommodative monetary policy is expected to benefit PFFA, supporting continued capital appreciation and stable dividend payments. Despite higher expense ratios, PFFA's net returns remain strong, with the cost of leverage likely to decrease as interest rates fall.
PFFA offers exposure to high-yield preferred stocks, which sit somewhere between traditional stocks and bonds. The fund's robust asset selection process, use of leverage, and options overlay contribute to its strong performance and stable income generation. Despite high fees, PFFA's active management and consistent outperformance justify the cost, making it a solid choice for income-oriented investors.
Fixed-income investing is a weak spot for many investors, as it seems more opaque and daunting. We propose an option that vastly simplifies it, while not sacrificing the outstanding income generation we need. Collect income, not headaches.
On Wednesday, Virtus Investment Partners released its newest fund, the Virtus KAR Mid-Cap ETF (KMID). KMID is an actively managed fund that seeks to generate long-term capital appreciation.
Preferred stocks and ETFs like PFFA are rising due to lower Fed rates, offering higher yields than CDs and Treasuries. PFFA, a non-diversified ETF with $1.3B in assets, uses leverage to maximize yield-to-call and minimize concentration risks. PFFA has the highest distribution yield (8.82%) and 5-year return (6.68%) among preferred stock ETFs, despite its high expense ratio (2.52%).
Since the issuance of my bull case on PFFA back in November 2023, the ETF has delivered ~ 30% in total returns. This might raise the question of whether the upside potential is already exhausted. In this article, I explain in detail why I continue to remain bullish here.
A high-yield dividend-paying exchange-traded fund (ETF) could be a valuable tool for investors seeking to build a solid portfolio that generates dividends. These ETFs offer a steady income stream, providing a cushion for living expenses and the potential for capital appreciation.
The best sources of cash keep on producing cash without more input needed. This is the dream of passive income. I love collecting it monthly. Today, we reveal two outstanding sources of passive income.
Adding preferred stock section to active management could lead to overlooked income opportunities
The Virtus InfraCap U.S. Preferred Stock ETF is an exchange-traded fund that invests primarily in preferred securities issued by the U.S. of companies. The fund currently provides a very attractive yield of 9.09%, but it also uses considerable leverage. Since it is an exchange-traded fund, it trades very closely with the NAV (net asset value). PFFA has a rather short history of six years and has performed well in comparison with its peers. But it has provided consistent distributions since inception. Going forward, there are certain tailwinds that should help the preferred sector and this fund in general.
This month, I want to dive deeper into my top picks within each asset class; let's begin with preferred securities. PFFA has a proven track record in two would-be crises, producing index-beating returns. I love income and collect it from all over the market.