PFFA ETF

Over the past couple of months, PFFA has not performed well. The unfavorable interest rate dynamics have introduced a pressure on PFFA's preferred share real estate, infrastructure and fixed-to-floating rate holdings. Yet, in the article I make an argument on why this could be considered an interesting opportunity for high and defensive income investors to lock in ~9.1% dividend.

PFFA offers a juicy 9.2% yield. However, that is not all it has going for it. We show why PFFA beats its competition.

On Tuesday, Virtus Investment Partners launched its latest active ETF, the Virtus Seix AAA Private Credit CLO ETF (PCLO).  The actively managed fund has a low net expense ratio of 0.29%.

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.

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.