Despite calls for higher interest rates ahead, investors are concerned that markets might be stuck in an extended low-yield environment. Nevertheless, income-minded investors may look to a few high-yield ETF strategies to generate cash.
For example, the InfraCap REIT Preferred ETF (NYSEArca: PFFR) can be extremely attractive for investors looking for income in a yield-stretched market. PFFR has a 0.45% expense ratio and shows a 6.39% 12-month yield.
The REIT Preferred ETF is comprised of preferred securities listed on U.S. exchanges that are issued by REITs.
Preferred stocks are a type of hybrid security that show bond- and equity-like characteristics. The shares are issued by financial institutions, utilities and telecom companies, among others. Within the securities hierarchy, preferreds are senior to common stocks but junior to corporate bonds.
While preferred securities represent ownership interest in a company, preferred stockholders usually have no voting rights with respect to corporate matters of the issuer, but preferred securities have rights and characteristics similar to debt instruments. Additionally, preferred stocks issue dividends on a regular basis, but investors don’t usually enjoy capital appreciation on par with common shares.