InfraCap REIT Preferred ETFNYSE American: PFFR

REIT preferred shares offer higher returns and lower volatility than common REIT stocks, making them attractive in the current market cycle. The InfraCap REIT Preferred ETF provides a diversified mix of preferred securities from various REIT sub-categories, with a 30-Day SEC Yield of 6.92%. This ETF stands out by focusing on preferred securities, offering higher yields, less volatility, and a higher claim on assets compared to common REIT ETFs.

The InfraCap REIT Preferred ETF tracks the performance of preferred shares issued by U.S. equity and mortgage REITs. PFFR offers diversification across the entire U.S. REIT space with very limited allocations into single company preferred instruments. In the past 3-year period, PFFR has underperformed VNQ on a total return basis due to higher duration factor.

PFFR offers investors exposure to REIT preferred. It offers investors a strong 8.1% dividend yield but is less diversified than most of its peers. The fund's strong yield makes it a buy, but the fund's niche holdings mean positions should be kept small.

Preferreds are fixed income instruments that normally provide strong yield but minimal capital appreciation potential. Recently, however, prices have become dislocated and irrational. They now have around 50% capital appreciation potential on top of outsized dividend yields.