Infrastructure Capital Advisors has partnered with Virtus ETF Solutions to launch the first exchange traded fund (NYSE: PFFA) that specifically targets dividend-yielding preferred securities and strives to enhance yield, performance, and stability through an options strategy on approximately 20% of the portfolio.*There is no assurance that the ETF’s objective will be achieved or maintained.
We screen the preferred stock index and eliminate those stocks priced above an assessed value known as their net asset value.
Then, based on our systematic valuation methodology, we select what we believe are the 100 strongest stocks. This comprises at least 80% of the portfolio. We then add a modest amount of leverage—typically 20%.
We then add an option strategy—anywhere from 0 to 20% of the portfolio. This is an income-seeing strategy similarly employed by institutions, and is now available within this ETF structure. Here we write options on common stocks where preferred shares are available but don’t meet our selection criteria. This also acts as a hedge against interest rate movements.
Please read our investment guide to learn how (NYSE: PFFA) seeks to pay monthly dividends in an easy-to-buy, easy-to-sell ETF.Read Our Guide
We’ve designed (PFFA) to be composed of preferred stocks because they have historically displayed attractive yield potential, both fixed income and equity characteristics, and lower equity beta than the broad U.S. equity market.
To obtain a prospectus, please click here.
Infrastructure Capital Advisors, LLC (ICA) is a registered investment advisor that manages exchange traded funds (ETFs) and a series of hedge funds. The firm was formed in 2012 and is based in New York City.
The firm seeks current income as its primary objective of most of its investing activities. Consequently, the firm focuses generally on companies that generate and distribute substantial streams of free cash flow. This approach is based on the belief that tangible assets that produce free cash flow have intrinsic values that are unlikely to deteriorate over time.Leadership Team