Fed rate cuts should favor preferred stocks, Virtus money manager says

One fiscal steadfast is trying to capitalize connected preferred stocks – which transportation much risks than bonds, but aren't arsenic risky arsenic communal stocks.

Infrastructure Capital Advisors Founder and CEO Jay Hatfield manages the Virtus InfraCap U.S. Preferred Stock ETF (PFFA). He leads the company's investing and concern development.

"High output bonds and preferred stocks… thin to bash amended than different fixed income categories erstwhile the banal marketplace is strong, and erstwhile we're coming retired of a tightening rhythm similar we are now," helium told CNBC's "ETF Edge" this week.

Hatfield's ETF is up 10% successful 2024 and astir 23% implicit the past year.

His ETF's 3 apical holdings are Regions Financial, SLM Corporation, and Energy Transfer LP arsenic of Sept. 30, according to FactSet. All 3 stocks are up astir 18% oregon much this year.

Hatfield's squad selects names that it deems are mispriced comparative to their hazard and yield, helium said. "Most of the apical holdings are successful what we telephone plus intensive businesses," Hatfield said.

Since its May 2018 inception, the Virtus InfraCap U.S. Preferred Stock ETF is down astir 9%.