Forget Individual REITs: $14.2 Billion ETF Offers 6.4% Monthly Dividends With Lower Risk

"iShares Preferred and Income Securities ETF ( NYSEARCA:PFF) offers investors a 6.4% yield by investing in U.S. preferred stocks and income-producing securities. With $14.2 billion in assets and an 18-year track record since 2007, PFF provides monthly income through a diversified portfolio of preferred securities issued primarily by financial institutions and REITs. The fund charges a 0.45% expense ratio and maintains no leverage."

"Preferred stocks occupy a middle ground between bonds and common equity. They pay fixed dividends like bonds but trade on stock exchanges and can appreciate or decline in value. PFF generates its yield by collecting these fixed dividend payments from its holdings and distributing them monthly to shareholders. However, these distributions fluctuate based on the portfolio's composition and the payment schedules of underlying securities."

"PFF's monthly distributions have ranged from $0.16 to $0.18 per share throughout 2025, totaling approximately $2.06 annually. This variability is normal for preferred stock ETFs, as different holdings pay on different schedules and rates adjust over time. The fund has maintained consistent monthly payments since inception, though amounts fluctuate quarter to quarter. The primary risk to PFF's dividend sustainability is interest rate sensitivity. Preferred stocks behave similarly to bonds-when interest rates rise, their prices typically fall, and vice versa."

PFF invests in U.S. preferred stocks and income-producing securities, yielding 6.4% and managing $14.2 billion in assets since 2007. The ETF holds a diversified portfolio primarily of financial institution and REIT preferred securities, provides monthly distributions, charges a 0.45% expense ratio, and uses no leverage. Preferred stocks pay fixed dividends and trade like equities, causing distributions to fluctuate with portfolio composition and issuer payment schedules. Monthly distributions in 2025 ranged $0.16–$0.18 per share, about $2.06 annually. Major risks include interest-rate sensitivity, which affects prices, and issuer stress that can suspend preferred dividends reducing income.

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