PFFA Profile
The Virtus InfraCap U.S. Preferred Stock ETF is an actively managed fund that primarily focuses on investing in U.S. preferred stocks. Under normal market conditions, the fund allocates at least 80% of its net assets, including any borrowings used for investment purposes, to U.S. preferred stocks. Additionally, it may invest in derivatives and other financial instruments that have economic characteristics similar to preferred stocks. This strategy provides investors with targeted exposure to income-generating securities with a focus on capital appreciation and stability.
The fund's investment strategy is overseen by the Sub-Adviser, which employs a blend of quantitative, qualitative, and relative valuation approaches to manage the fund's assets. This involves assessing various factors such as the financial health of the issuing companies, market conditions, and the relative attractiveness of different preferred stocks. The goal is to construct a portfolio that maximizes returns while managing risk, taking into account both current income and potential price appreciation.
Preferred stocks, which the fund primarily invests in, are hybrid securities that typically offer higher yields than common stocks and possess seniority over common equity in the event of liquidation. They provide investors with fixed dividends and can be an attractive option for those seeking steady income. The fund's investment in derivatives and similar instruments further enhances its ability to achieve its investment objectives by providing additional tools to manage risk and optimize returns.
As a non-diversified fund, the Virtus InfraCap U.S. Preferred Stock ETF concentrates its investments in a specific asset classâ€U.S. preferred stocksâ€resulting in higher exposure to sector-specific or issuer-specific risks. However, this focus allows for a more specialized approach to investing, aimed at capturing the unique characteristics of preferred stocks, such as their income-generating potential and relative stability compared to common stocks. This concentrated strategy seeks to deliver both income and capital growth for investors interested in the preferred stock market.
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