#preferred-stock-etfs
#preferred-stock-etfs

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Trap!? PFFA's 9.6 Percent Preferred Yield Hides Up to 33 Percent Borrowed Leverage Most Income Investors Never See

PFFA’s high distribution yield is generated by borrowing to buy more preferred shares, so returns depend on financing costs and credit conditions.

$42,000 annual dividend income requires $1.2M at 3.5% yield, $700k at 6% yield, or $420k at 10% yield.

PFFA’s returns depend mainly on 2026 Fed cutting pace, since preferred stocks act like long-duration credit and leverage increases rate sensitivity.

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