A financial company is trying to utilize preferred stock. Preferred stocks are riskier than bonds, but not as risky as common stocks.
Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, manages the Virtus InfraCap US Preferred Stock ETF (PFFA). He leads the company’s investments and business development.
“High-yield bonds and preferred stocks tend to outperform other fixed income categories when the stock market is doing well, or coming out of a tightening cycle like we’re seeing now,” he said on CNBC’s “ETF Edge” this week. he said. .
Hatfield’s ETF is up 10% in 2024 and nearly 23% over the past year.
The top three stocks in his ETF as of Sept. 30 were Regions Financial, SLM Corporation and Energy Transfer LP, according to FactSet. All three stocks are up more than 18% since the beginning of the year.
He said Hatfield’s team picks stocks that it believes are mispriced relative to risk and yield. “Most of the top holdings are in so-called asset-intensive businesses,” Hatfield said.
Since its inception in May 2018, the Virtus InfraCap US Preferred Stock ETF is down nearly 9%.
