PFO: Low Yield And Poor Performance Weaken The Case For This Fund

Power HedgeInvesting Group LeaderFollow5ShareSavePlay(35min)CommentsSummaryThe Flaherty & Crumrine Preferred and Income Opportunity Fund has underperformed peers, delivering a negative total return over five years and offering the lowest yield in its group.PFO's 6.77% yield is higher than preferred stock indices but trails peer closed-end funds, making it less compelling for income-focused investors.Recent performance improved, with a 13.17% nine-month total return, but the fund's lower yield and past distribution cuts remain concerns.PFO covers its distribution with net investment income and realized gains, trading at a 6.74% NAV discount, but higher-yielding, better-performing alternatives exist.Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More » PM Images/DigitalVision via Getty Images The Flaherty & Crumrine Preferred and Income Opportunity Fund (PFO) is a closed-end fund that investors may choose to purchase as a way of earning an attractive level of income from the assets that they already possess. The fund doesThis article was written byPower Hedge16.05K 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.