PFFA ETF: 9%+ Preferred Income ETF Holding Its Ground Near $22

NYSEARCA:PFFA – 9%+ Preferred Income Engine Near The Top Of Its Range

NYSEARCA:PFFA price, yield and where it sits in the 2026 market

NYSEARCA:PFFA closed at about $21.82, down $0.07 on the day, a -0.32% move from the previous close at $21.89. Intraday, the ETF traded between $21.79 and $21.88, showing tight liquidity around the current level. Against the 52-week range of $19.24 to $22.49, the fund is roughly 13% above its yearly low and only about 3% below its high, so investors are not buying a distressed asset; they are paying close to the upper band of the last year’s trading corridor. Average daily volume of around 77.6K shares is modest but adequate for an income vehicle that investors typically hold rather than trade aggressively. At today’s price, the monthly distribution of $0.1725 translates into a cash yield in the 9.3–9.4% range, which is the core of the PFFA ETF story: equity-like total return behavior anchored by junk-like headline yield.

PFFA ETF income engine: 9.3–9.4% yield from preferreds, leverage and structure

The yield profile of NYSEARCA:PFFA is not an accident; it is engineered. The ETF sits on about $2 billion in assets and invests in U.S. preferred stock, but it does not simply mirror a broad preferred index. Instead, the manager layers three levers: high-coupon preferreds, leverage that can reach roughly 30% of assets, and derivatives income through long/short options. The trailing twelve-month yield around 9.4% is the output of that stack. From a tax standpoint, distributions behave like taxable bond income – essentially ordinary dividends rather than qualified rates – which matters for investors holding PFFA ETF in taxable accounts. The portfolio deliberately tilts toward higher yield-to-call preferreds, accepting slightly higher security-level risk to push the coupon profile up while controlling overall portfolio risk via diversification across roughly 195 individual issues.

PFFA ETF portfolio construction: preferreds with “real asset” DNA and ex-financial tilt

The adviser behind PFFA ETF has built a family of income products around a simple idea: “income from real assets.” That translates into preferred shares issued by capital-intensive businesses where tangible assets and contractual cash flows backstop the capital structure. The mix includes REIT preferreds, infrastructure and energy-linked businesses, non-bank financials and other asset-heavy sectors. Critically, NYSEARCA:PFFA does not just track whatever the benchmark index owns; it intentionally overweights certain pockets. At one recent point, non-bank financial services reached about 47.6% of the fund versus roughly 25% in the benchmark, and REITs stood around 22.9% versus only about 5.7% in the index. That ex-traditional-bank tilt matters in a cycle where rate cuts and regulatory pressure can compress margins and raise risk in the banking sector. The portfolio also uses non-cumulative preferreds and fixed-to-floating structures to capture higher coupons while managing interest-rate exposure.

NYSEARCA:PFFA vs passive peers: paying 2.48% to avoid being an index hostage

The headline cost of NYSEARCA:PFFA is high: an expense ratio around 2.48%, far above passive preferred ETFs such as broad index trackers. On paper, that looks punitive for an income vehicle. In practice, the performance record is what matters. Over the last five years, total returns for PFFA ETF have outpaced unlevered preferred benchmarks like the larger passive funds, even after fees. On a total-return chart, PFFA ETF “stands out from the crowd” despite carrying the highest expense ratio in its peer group. That outperformance has come through multiple stress regimes – pandemic-era drawdowns, the AI-driven equity melt-up that made fixed income look dull, and now the start of a falling base-rate environment. On the dividend side, NYSEARCA:PFFA has maintained and grown distributions where many high-yield products have cut. The combination of active security selection, sector tilting, leverage and options has, so far, justified the 2.48% fee in hard numbers rather than marketing language.

PFFA ETF dividend record: six consecutive annual raises from $0.1700 to $0.1725

Income stability is where NYSEARCA:PFFA earns its keep for retirees and cash-flow-focused investors. Earlier in January, the fund raised its monthly dividend from $0.1700 to $0.1725 per share, even though base rates have already started to move lower. That increase marks the sixth consecutive year of monthly dividend hikes. The five-year dividend compound annual growth rate sits around 2%, which looks small versus inflation or high-growth dividend ETFs but has to be judged against the starting point: a 9%+ cash yield, not a 2–3% payout. In the high-yield ETF universe, the usual debate is about how long the current payout can be maintained before a cut; PFFA ETF has done the opposite and nudged distributions higher through multiple cycles. The recent step-up, after a period when the yield briefly crossed above 10% during a tariff-driven selloff in April 2025, confirms management is comfortable that net investment income can support the new $0.1725 run-rate.

PFFA ETF and base-rate cuts: income pressure on one side, funding relief on the other

Lower policy rates are a double-edged sword for NYSEARCA:PFFA. On the negative side, a subset of the portfolio – especially floating-rate or fixed-to-floating preferreds indexed to benchmarks like SOFR – will gradually reset lower, compressing coupon income. Some older vintage issues that were attractive when rates were higher now roll down their yields as reference rates fall. However, that headwind is offset by two structural positives. The first is cheaper leverage: PFFA ETF finances 20–30% of its asset base with short-term borrowing. As base rates fall, the cost of this external leverage drops, directly boosting net interest income per share. The second is price action in fixed-rate preferreds. As the risk-free curve comes down, fixed-coupon preferred prices tend to rise. Active management can crystalize those gains and recycle capital into higher-yielding opportunities, turning rate cuts into realized capital gains and reinvestment fuel rather than a pure drag.

Risk profile of NYSEARCA:PFFA: preferreds, diversification and drawdown shielding

The core risk profile of NYSEARCA:PFFA is fundamentally different from a high-yield equity fund. Preferred shares sit above common equity in the capital stack; dividends on the common must be cut before preferred distributions are impacted in most structures. Payments to preferred holders are quasi-mandatory: terms and schedules are set in the prospectus, and skipping them without extreme distress sends a negative signal to creditors and the market. The fact that PFFA ETF holds more than 195 individual preferred issues spreads idiosyncratic risk; a problem in one issuer or sector does not automatically compromise the whole income stream. In practice, when cash-flow stress appears, issuers usually halt common dividends, raise new equity, or sell assets long before they touch preferred coupons. That dynamic, combined with diversification and the absence of common-equity exposure in the portfolio, makes PFFA ETF structurally safer than a basket of 9%-yielding small-cap stocks.

PFFA ETF leverage and options: return amplifier and risk magnifier in one package

The same tools that give NYSEARCA:PFFA its edge – leverage up to roughly 30% of assets and options overlays – also introduce non-trivial risk. Leverage boosts current yield and capital appreciation when preferred prices rise, but it also amplifies drawdowns when rates spike or credit spreads widen. The 20–30% external gearing means that a 10% move down in the underlying portfolio can translate into a larger hit at the NAV level. The long/short options program provides incremental income and some hedging, but options are path-dependent; sharp, gap-style moves can overwhelm hedges or create mark-to-market noise. Investors buying PFFA ETF at $21.82 need to be comfortable with this structure: a leveraged, option-enhanced preferred portfolio that will not trade like a sleepy passive product when volatility returns. The reward is the roughly 9.3–9.4% distribution; the trade-off is higher sensitivity to stress episodes than an unlevered peer.

PFFA ETF versus BDCs and MLPs: yield peers with different risk exposures

When comparing income opportunities, NYSEARCA:PFFA sits in an interesting pocket. The current ~9.3% yield is slightly below what diversified BDC baskets like BIZD can offer, but the risk is different. BDCs such as MAIN and HTGC, often viewed as dividend strongholds, typically pay base yields below 9%, and they carry direct equity and credit risk into leveraged middle-market loans. MLPs, represented by vehicles like AMLP, can offer yields in the same ballpark as PFFA ETF, but their cash flows are exposed to energy and commodity cycles and partnership-specific tax issues. In contrast, PFFA ETF gives investors a leveraged preferred stack diversified across real-asset-backed issuers and ex-bank financials, with no direct common-equity exposure. For an investor constructing an income barbell, NYSEARCA:PFFA looks like a middle ground between safer but lower-yielding preferred index funds and higher-risk, higher-beta yield plays.

Dividend coverage, ROC mix and NAV trend in PFFA ETF

The quality of NYSEARCA:PFFA’s payout matters as much as the headline number. Recently, around 93% of distributions over a three-month window have come from net investment income rather than return of capital. That mix confirms the fund is largely funding its 9%+ yield out of coupons and portfolio earnings, not just handing investors back their own capital. Since the COVID-19 shock and a strategic shift away from covered-call exposure, PFFA ETF’s NAV trajectory has been upward, despite volatility spikes and macro-level scares. That is consistent with an income engine that covers itself and modestly grows capital while paying out a high monthly cheque. It also explains why the fund was able to raise the dividend from $0.1700 to $0.1725 even as base rates fell – cheaper leverage and better coverage gave management room to increase the payout without eroding NAV.

Role of NYSEARCA:PFFA in a portfolio: anchor income, not a speculative trade

In a world where the S&P 500’s price-to-earnings multiple has been stretched by three years of AI-driven gains, NYSEARCA:PFFA offers a different proposition. The ETF has been explicitly framed as suitable for retirees and investors who rely on portfolio cash flows to fund living expenses and want to avoid the psychological and financial damage of dividend cuts. A 20–30% allocation to PFFA ETF in a diversified portfolio has been suggested as a reasonable anchor when equity valuations look vulnerable; more aggressive investors can trim that share and rotate into growth stocks, but the idea is clear: PFFA ETF functions as a high, durable income core, not as a tactical trading vehicle. At a price of $21.82, with a 52-week band of $19.24–$22.49 and a yield north of 9%, the fund sits in a zone where it can continue to serve that role if investors accept the leverage and rate-cycle risks that come with the structure.

Verdict on NYSEARCA:PFFA: high-yield buy with leverage and rate-path risk clearly on the table

Putting the numbers together, NYSEARCA:PFFA offers a roughly 9.3–9.4% yield at $21.82, supported by a diversified preferred portfolio of about 195 securities, external leverage in the 20–30% range, and an actively managed options overlay. The expense ratio of 2.48% is unquestionably high, but five-year total returns and dividend resilience have outpaced unlevered preferred peers, indicating that investors have been paid for that cost. Six consecutive years of monthly dividend increases, including the recent move to $0.1725 per share, a five-year dividend CAGR around 2%, and coverage figures where about 93% of distributions come from income rather than return of capital, all point to a well-structured income engine rather than a fragile yield trap. The main risks are clear: leverage will magnify drawdowns when credit and rate volatility spike, and falling base rates will pressure some floating-rate holdings even as they reduce funding costs. On balance, given the current $21.82 price near the upper end of the $19.24–$22.49 range, the yield around 9.4%, and the track record through multiple shocks, PFFA ETF justifies a Buy stance for investors seeking high, recurring cash flow and willing to accept leverage and rate-path risk as the cost of that income.