PFF: Currently Make Sense Only For Diversification Purposes
Summary
- iShares' PFF includes hybrid securities and preferred stocks, or those which have preference over common shares for dividend payments.
- In this respect, a comparison with others in the fixed-income asset class shows PFF's income potential.
- For capital preservation purposes during such tumultuous times, I also compare total returns with higher dividend yield provider PGX which uses more stringent credit ratings when selecting holdings.
- Sector exposure and the Fed raising interest rates are two factors that should put pressure on PFF's share price, at least in the short term.
- PFF makes sense, but only if you are short of diversification options and are considering preferred stocks.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PFF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing.
I am long EDV.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.