One monetary firm is trying to capitalize on preferred stocks – which carry more risks than bonds, but aren’t as iffy as common stocks.
Infrastructure Capital Advisors Founder and CEO Jay Hatfield manages the Virtus InfraCap U.S. Preferred Stock ETF (PFFA). He inveigles the company’s investing and business development.
“High yield bonds and preferred stocks… tend to do better than other immobilized income categories when the stock market is strong, and when we’re coming out of a tightening cycle like we are now,” he told CNBC’s “ETF Lip” this week.
Hatfield’s ETF is up 10% in 2024 and almost 23% over the past year.
His ETF’s three top holdings are Divisions Financial, SLM Corporation, and Energy Transfer LP as of Sept. 30, according to FactSet. All three stocks are up about 18% or multifarious this year.
Hatfield’s team selects names that it deems are mispriced relative to their risk and give way, he said. “Most of the top holdings are in what we call asset intensive businesses,” Hatfield said.
Since its May 2018 inception, the Virtus InfraCap U.S. Single out Stock ETF is down almost 9%.