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Virtus InfraCap US Preferred Stock ETF is downgraded from Strong Buy to Buy, reflecting a less favorable rate environment and reduced total return ceiling. PFFA's income remains robust with a ~10% yield, but NAV has eroded ~2.7% since May due to higher long-term rates. The portfolio is rotating toward higher credit quality, sacrificing some yield (SEC yield down to ~8.78%), and supporting resilience in a late-cycle regime.
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.
The best income investments combine attractive valuations with strong underlying cash flows. We discuss two picks rich in cash flows and fundamentals, currently trading at bargain valuations. We like to get paid while waiting for value to be recognized.
Owning a rental at the current 90th percentile of the Case-Shiller index means paying peak prices for a stream of tenant checks that arrive net of taxes, insurance, vacancy, and the plumber.
Three monthly dividend ETFs can replace a missing Social Security check, but the one that demands the least capital carries a risk most retirees underestimate.
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.
Preferred stock ETFs have become a common income vehicle for investors chasing yield above what investment-grade bonds can offer.
Pulling $40,000 a year from $500,000 requires a blended yield of roughly 8%, well above what the 4.7% 10-year Treasury delivers today.