PFD: The Risks Here Could Be Greater Than Believed
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Power HedgeInvesting Group LeaderFollow5ShareSavePlay(32min)Comment(1)SummaryThe Flaherty & Crumrine Preferred and Income Fund underperforms peers in yield and total return, despite outperforming the preferred stock index.PFD's current 6.88% yield trails comparable closed-end funds, making it less attractive for income-focused investors seeking higher payouts.The fund trades at a 7.50% discount to NAV, its cheapest level among peers and below its five-year average, but this does not offset its lower yield.Further Fed rate cuts could benefit PFD only if inflation subsides; persistent or rising inflation poses significant risk to fixed-income investors. PM Images/DigitalVision via Getty Images The Flaherty & Crumrine Preferred and Income Fund (PFD) is a closed-end fund that aims to provide its investors with a high level of current income. However, the fund’s current yield is lower than thatThis article was written byPower Hedge15.92K FollowersFollowPower Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields. He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.