The Ground Up: New REIT Preferred ETF, STAG's CEO, And Chuck Carnevale

| About: InfraCap REIT (PFFR)

Summary

InfraCap REIT Preferred ETF (PFFR) targets high yielding liquid preferred securities issued by REITs.

The new REIT Preferred ETF has a 0.45% expense ratio.

Also listen to Ben Butcher, CEO of STAG Industrial (STAG).

Fellow Seeking Alpha contributor, Chuck Carnevale, weighs in on REITs.

Infrastructure Capital Advisors has partnered with Virtus ETF Solutions to launch the first exchange traded fund that specifically targets high yielding liquid preferred securities issued by REITs. Infrastructure Capital Advisors rolled out the InfraCap REIT Preferred ETF (NYSEARCA:PFFR).

The new REIT Preferred ETF has a 0.45% expense ratio and according to Jay D. Hatfield, Co-founder and President of InfraCap

PFFR is one of the newest products to overlap the newly added 11th sector in the S&P 500 and allows investors to invest in the real estate industry without having to select individual companies. We also believe it will be extremely attractive to investor’s looking for income in a yield-stretched market.

The new REIT ETF will try to reflect the performance of the Index REIT Preferred Stock Index, which 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 like debt instruments. Additionally, preferred stocks issue dividends on a regular basis, but investors don’t usually enjoy capital appreciation on par with common shares.

REITs are securities that trade like a stock and invest in real estate directly through property ownership or mortgages. Consequently, revenue is mainly generated through rents or interest on mortgage loans. To qualify for special tax considerations, the asset also distributes the majority of income, about 90% of taxable profits, to investors as dividends, and receive at least 75% of that income from rents, mortgages and sales of property.

To be included in PFFR’s underlying index, components must be a preferred security from a U.S. REIT with $75 million or more in market capitalization, an average monthly trading volume of 250,000 shares or more for 6 months and a yield to worst of 3% or more.

The fund will include REITs that involved in mortgage, office properties, hotels, healthcare, shopping centers and others. Top holdings include VEREIT Inc (VER) 10.9%, WellTower Inc (HCN) 10.1%, Alexandria Real Estate (ARE) 6.2%, Felcor Lodging Trust (FCH) 6.0% and National Retail Properties (NNN) 5.3%.

On my radio show this week, Jay Hatfield (Co-founder of PFFR) is a guest.

Also, last week I wrote on STAG Industrial (STAG) and Ben Butcher (CEO of STAG) is also a guest on my show this week, along with Seeking Alpha contributor Chuck Carnevale.

To LISTEN to the Ground Up PODCAST CLICK HERE. (Let me know what you think about the radio show and the podcast).

REIT ETF: (PFFR)

Check out The REIT Beat if you'd like to get more of my ideas, including early access to my highest-conviction REIT plays, access to Q&As with management teams, weekend REIT reports, and more. We'd love to have you on board, so have a look.

Author Note: Brad Thomas is a Wall Street writer, and that means he is not always right with his predictions or recommendations. That also applies to his grammar. Please excuse any typos, and be assured that he will do his best to correct any errors, if they are overlooked.

Finally, this article is free, and the sole purpose for writing it is to assist with research, while also providing a forum for second-level thinking. If you have not followed him, please take five seconds and click his name above (top of the page).

Disclosure: I am/we are long APT, ARI, BXMT, CONE, CORR, CCP, CCI, CHCT, CLDT, CUBE, DLR, DOC, EXR, FPI, GPT, HTA, HASI, KIM, LADR, LTC, LXP, O, OHI, QTS, ROIC, STWD, SNR, STAG, SKT, SPG, TCO, UBA, VTR, WPC, PEI, EQR, STOR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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