Infrastructure Capital Advisors Founder and CEO Jay Hatfield is looking to capitalize on preferred stocks, which he believes carry more risk than bonds but are not as risky as common stocks. Hatfield manages the Virtus InfraCap U.S. Preferred Stock ETF (PFFA) and leads the company’s investing and business development efforts. He highlighted that high yield bonds and preferred stocks tend to perform well when the stock market is strong and during times of economic recovery, such as the current period in which we are coming out of a tightening cycle.
As of September 30, Hatfield’s ETF is up 10% in 2024 and nearly 23% over the past year. The fund’s three top holdings include Regions Financial, SLM Corporation, and Energy Transfer LP, which have all seen gains of around 18% or more this year, according to FactSet data. Hatfield’s investment approach involves selecting names that are viewed as mispriced relative to their risk and yield. He focuses on asset-intensive businesses and aims to identify opportunities where he sees potential for returns that outweigh the risks involved.
Despite its performance, the Virtus InfraCap U.S. Preferred Stock ETF has faced challenges since its inception in May 2018, with a decline of almost 9% since then. However, Hatfield remains optimistic about the fund’s prospects and believes in the long-term potential of preferred stocks as an asset class. He emphasized the importance of diversification and careful selection of holdings to manage risks effectively and maximize returns for investors. By leveraging his team’s expertise and experience, Hatfield aims to navigate the complexities of the market and position the ETF for continued growth and success.
Hatfield’s focus on preferred stocks as part of a diversified investment strategy reflects his confidence in the asset class’s ability to generate attractive returns while balancing risks. Preferred stocks offer a unique investment opportunity that falls between bonds and common stocks in terms of risk and potential rewards. By actively managing the Virtus InfraCap U.S. Preferred Stock ETF, Hatfield seeks to capitalize on market opportunities and deliver value to investors over the long term. His investment philosophy centers on identifying undervalued assets and creating a well-constructed portfolio that can weather market fluctuations and economic uncertainties.
In conclusion, Jay Hatfield’s approach to investing in preferred stocks through the Virtus InfraCap U.S. Preferred Stock ETF demonstrates his commitment to providing investors with a unique and potentially lucrative investment option. While preferred stocks carry some risks, Hatfield believes that by carefully selecting holdings and actively managing the fund, he can create value and deliver strong performance over time. As the economic landscape evolves and market conditions change, Hatfield remains focused on identifying opportunities that offer a balance of risk and reward for investors. With a track record of success and a dedication to his investment philosophy, Hatfield aims to continue positioning the ETF for growth and success in the dynamic financial markets.
