Preferred stocks should benefit from fed rate cuts, according to Virtus money manager.
One financial firm aims to profit from preferred stocks, which offer higher returns than bonds but are less risky than common stocks.
Jay Hatfield, Founder and CEO of Infrastructure Capital Advisors, oversees the management of the company's investments and business development.
When the stock market is strong and we're exiting a tightening cycle, high yield bonds and preferred stocks typically outperform other fixed income categories, as stated by the expert on CNBC's "ETF Edge" this week.
In 2024, Hatfield's ETF experienced a 10% increase, while over the past year, it saw an almost 23% growth.
According to FactSet, his ETF's top three holdings as of Sept. 30 are , , and , with all three stocks experiencing an increase of approximately 18% or more this year.
Hatfield's team believes that many of the top holdings are undervalued based on their risk and potential return, he stated.
The Virtus InfraCap U.S. Preferred Stock ETF has experienced a nearly 9% decline since its launch in May 2018.
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