PFFA: This 9.7% Yield From Preferreds Won't Last Forever

Treading SoftlyInvesting GroupFollow5ShareSavePlay(9min)Comments(4)SummaryVirtus InfraCap US Preferred Stock ETF is an actively managed, leveraged ETF targeting preferred securities and outperforming its benchmark, PFF.PFFA offers a near 9.7% yield, but its distribution is variable and subject to cuts as interest rates decline.The fund’s strategy involves rotating into discounted, higher-risk preferreds, including MLP and REIT issues, to capture outsized yields and capital gains.PFFA is best used to augment, not replace, individual preferred holdings, as its income stream is less stable than fixed-rate preferred securities.This idea was discussed in more depth with members of my private investing community, The Dividend Kings. Learn More » Luis Alvarez/DigitalVision via Getty Images I used to love April Fools' Day as a kid. As an adult, I don't participate in the festivities nearly as much as I used to. My wife enjoys April Fools' Day significantly more than I do, and she typically plays pranksThis article was written byTreading Softly4.4K FollowersFollowScott Kaufman, aka Treading Softly, learned about investing firsthand from over a decade of financial sector experience. He is the lead analyst for Dividend Kings providing actionable insight into high quality dividend growing and undervalued opportunities. His focus is to see a bountiful harvest of cash dividends and strong capital gains, providing a robust total return.Analyst’s Disclosure: I/we have a beneficial long position in the shares of PFFA, ET.PR.I, RF, RLJ.PR.A either through stock ownership, options, or other derivatives. 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. Kody's Dividends, Justin Law, and Rachel Kaufman are part of the Dividend Kings teamSeeking 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.