**Preferred Stocks: A Hidden Gem in the Fixed Income Landscape**
As the stock market continues to soar, one investment expert is betting big on preferred stocks, a often-overlooked asset class that offers a sweet spot between the stability of bonds and the growth potential of common stocks.
Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, manages the Virtus InfraCap U.S. Preferred Stock ETF (PFFA), which has seen impressive gains of 10% in 2024 and 23% over the past year. Hatfield attributes this success to the ETF’s focus on high-yielding preferred stocks, which tend to outperform other fixed-income categories during strong market conditions.
The ETF’s top holdings, including Regions Financial, SLM Corporation, and Energy Transfer LP, have all seen significant gains of 18% or more this year. Hatfield’s team uses a unique approach to select mispriced stocks that offer attractive yields relative to their risk profiles.
“We focus on asset-intensive businesses that are often overlooked by the market,” Hatfield explained. “Our strategy has allowed us to deliver strong returns while minimizing risk.”
Despite some volatility since its inception in May 2018, Hatfield remains bullish on the potential of preferred stocks to deliver steady income and capital appreciation. As investors continue to seek yield in a low-interest-rate environment, preferred stocks may offer a compelling alternative to traditional bonds and common stocks.
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