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PFFA is an actively managed preferred stock ETF that focuses on preferred equity listed in the US and utilizes a variety of active management strategies. Specifically, the portfolio manager analyzes companies based on fundamentals while generally eliminating exposure to callable securities. A distinguishing characteristic of PFFA is that it uses margin to modestly leverage the portfolio, with a target leverage of 15-25% and a cap of 33% of fund assets (an effective maximum leverage ratio of 1.25x). The fund may engage in active and frequent trading of portfolio securities, at its discretion, to meet its investment objectives.
Is PFFA's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
I rate the Janus Henderson AAA CLO ETF a Buy: its 5%+ yield, AAA CLO exposure, 0.13-year duration, and very low volatility are attractive while short-term rates remain elevated. I rate the Virtus InfraCap US Preferred Stock ETF a Hold: its 9.85% trailing yield and stronger historical returns are appealing, but leverage, higher rate sensitivity, and the current entry point keep me from upgrading it. The allocation decision comes down to yield versus stability: PFFA has delivered more income and stronger historical returns with much larger price swings, while JAAA sacrifices yield for a far.
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Virtus InfraCap US Preferred Stock ETF remains a buy, especially as a defensive play ahead of a potential recession. PFFA offers a 10% yield, leveraging preferred stock's seniority and diversification, though recent performance has lagged due to rising rates. The ETF is heavily weighted toward financials but maintains broad sector diversification, limiting single-issuer risk.