Virtus InfraCap U.S. Preferred Stock (PFFA)

Overview

The Virtus InfraCap U.S. Preferred Stock ETF (ICAP) is an actively managed ETF that seeks high current income while secondarily considering capital appreciation by investing primarily in U.S. preferred stocks.

Reputation and Reliability

Virtus is a well-established asset management firm with a history of offering various investment products.

Management Expertise

InfraCap is the sub-advisor known for expertise in income-oriented strategies including preferred stocks.

Goal

To provide high current income, with a secondary objective of capital appreciation.

Investment Approach and Strategy

Strategy: Actively managed strategy focused on selecting preferred stocks believed to offer attractive yields and capital appreciation potential.

Composition Primarily U.S. preferred stocks, with potential for other income-generating securities.

Market Share: ICAP's market share varies within the preferred stock ETF sector.

Total Net Assets (AUM): 174400000

Key Competitors

• PFF
• PGX
• SPFF
• PSL

Competitive Landscape

The preferred stock ETF market is competitive, with larger, passively managed funds dominating. ICAP differentiates itself through active management and a focus on high current income. This approach may result in higher returns than passively managed funds in certain market environments, but also carries higher risk due to active stock selection. ICAP's smaller AUM could impact liquidity.

Historical Performance: Historical performance should be evaluated based on reported returns over various time periods (e.g., 1-year, 3-year, 5-year, 10-year) which are available on financial websites.

Benchmark Comparison: Performance should be compared against a broad preferred stock index such as the ICE BofA US Preferred Stock Index.

Expense Ratio: 0.79

Average Trading Volume

ICAP's average trading volume is moderate, which may result in wider bid-ask spreads during less active periods.

Bid-Ask Spread

The bid-ask spread varies depending on market conditions and trading volume; investors should check the spread before trading.

Market Environment Factors

Interest rate changes, credit spreads, and economic growth influence preferred stock performance. Regulatory changes impacting financials can also affect preferred shares.

Growth Trajectory

Growth depends on investor demand for income-generating assets and ICAP's ability to generate competitive returns.

Competitive Edge

ICAP's active management approach and focus on high current income differentiate it from passively managed preferred stock ETFs. The fund seeks to identify undervalued preferred stocks with strong yield potential. The management team actively adjusts the portfolio based on market conditions and individual security analysis. This active approach may provide an advantage in navigating changing interest rate environments and credit cycles, allowing ICAP to potentially outperform passively managed peers.

Volatility

Preferred stocks are generally less volatile than common stocks, but ICAP's active management may introduce additional volatility compared to passive funds.

Market Risk

Preferred stocks are subject to interest rate risk (falling prices when rates rise), credit risk (issuer default), and call risk (issuer redeeming shares).

Ideal Investor Profile

Investors seeking high current income from preferred stocks, willing to accept the risks of active management, and comfortable with the potential for fluctuations in net asset value.

Market Risk

Suitable for income-seeking investors with a moderate risk tolerance who are looking for an actively managed preferred stock strategy.

ICAP is an actively managed preferred stock ETF that aims to provide high current income. Its active management approach differentiates it from many passive preferred stock ETFs, potentially offering higher returns but also higher risk. The ETF's performance is influenced by interest rate changes and credit spreads. Ideal investors are income-seeking individuals comfortable with the potential volatility associated with active management. Its market share in the preferred stock ETF market is relatively small compared to more passively managed products.

Data Sources:

• Virtus InfraCap U.S. Preferred Stock ETF Fact Sheet
• ETF.com
• Morningstar
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Market share data is approximate and may vary based on the source and date.