PFFA is a preferred stock ETF, an attractive income alternative with a 9% dividend. Its active management improves the risk from its leverage and rate sensitivity. PFFA constituents show strong growth metrics year-over-year, signaling business recovery. Market rotation into value sectors like Financials, Utilities, and Industrials, along with promising rate cuts, positions PFFA for promising total performance.
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PFFA is an actively-managed preferred shares ETF. It boasts a 9.3% distribution yield, but is much riskier than average, and with leverage to boot. PFFA has returned 9.0% since late 2023, outperforming most bonds and bond sub-asset classes.
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Despite relative outperformance in recent years, I cannot justify an allocation to PFFA.
The Virtus InfraCap U.S. Preferred Stock ETF offers a high annual dividend yield of nearly 10% that is paid monthly. PFFA has also outperformed the broader preferred index substantially over time. However, there is growing bad news for the fund that could threaten its outperformance.
On Thursday, Virtus Investment Partners added a new ETF to its roster with the launch of the Virtus AlphaSimplex Managed Futures ETF (ASMF). The actively managed fund has a net expense ratio of 0.80%.