A financial company is trying to capitalize on preferred stocks — which carry more risk than bonds, but are not as risky as common stocks.
Infrastructure Capital Advisors is managed by Founder and CEO, Jay Hatfield Virtus InfraCap US Preferred Stock ETF (PFFA). He leads the company's investment and business development.
“High-yield bonds and blue-chip stocks…tend to do better than other fixed-income classes when the stock market is strong, when we're coming out of a tightening cycle like we are now,” he told CNBC's “ETF Edge” this week. .
Hatfield's ETF is up 10% in 2024 and nearly 23% over the past year.
His top three ETF holdings are Financial areas, SLM Companyand LP power transfer As of September 30, according to FactSet. All three stocks are up 18% or more this year.
He said that Hatfield's team selects names that it believes are mispriced compared to their risks and returns. “Most of the largest holdings are in what we call asset-intensive companies,” Hatfield said.
Since its inception in May 2018, the Virtus InfraCap US Preferred Stock ETF is down approximately 9%.
