Virtus InfraCap U.S. Preferred Stock ETF

Virtus InfraCap U.S. Preferred Stock ETF (PFFA) is an actively managed fund that holds mostly U.S. preferred stock, chosen by sub-adviser Infrastructure Capital Advisors. Unlike most preferred funds, it borrows money to buy more securities and may trade options to boost income. Its trailing 12-month yield was 10.78% as of October 27, 2026. The trade-off is cost: its 2.11% expense ratio compares with a 0.39% average among similar funds.

• Over the year to Oct 27, 2026, PFFA returned -3.6%, 3rd of 5 among similar funds.
• Its 5-year annualized return was +4.1%.
• Its worst full calendar year was 2022 (-21.0%); its best was 2023 (+26.9%).
• The deepest fall in its price history was 22.8% (Dec 31, 2021 to Oct 21, 2022), recovered by Dec 29, 2023.

As of Jul 31, 2026, the fund held 194 securities; the ten largest made up 22.86% of assets.

• Over the three months to Jul 31, 2026, investors added a net $205.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.05%, -2.83%, +1.24%.

PFFA, issued by Virtus Investment Partners, does not track an index. Its sub-adviser, Infrastructure Capital Advisors, LLC, picks holdings actively, putting at least 80% of net assets into U.S. preferred stock or derivatives that mimic it. Preferred stock pays fixed or floating dividends ahead of common shareholders but ranks below bonds. Most holdings come from companies valued above $100 million.

The sub-adviser favors issuers with strong competitive positions, high returns on capital, steady profits, spare cash and access to funding. It tends to trim or avoid preferreds trading above the price at which the issuer can buy them back, since holders could lose money on a buyback. As of July 31, 2026, the fund held 194 securities, led by preferreds from Strategy Inc, Flagstar Bank and KKR at about 2.5% to 2.6% each. It is non-diversified (it can concentrate in fewer issuers) and, as of October 31, 2025, focused on real estate and financial companies.

The fund borrows from banks, usually 15% to 25% of net assets, to buy more securities. This leverage magnifies gains and losses; preferred stock equaled about 126% of net assets as of July 31, 2026. The sub-adviser may also trade options to add income, damp swings or hedge, though selling calls gives up gains above a set price.

• PFFA charges 2.11% a year, versus an average of 0.39% for the similar funds below (5th of 5, cheapest first).
• Of that, 0.8% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $214 in the first year and $2,441 over 10 years (assuming a 5% annual return).

The fund's first goal is current income, which it pays monthly at a high yield, though borrowing and high costs make it riskier than a typical income fund.

PFFA's main draw is income. It pays monthly, and its trailing 12-month yield was 10.78% ($2.04 per share) as of October 27, 2026. It is expensive: 2.11% a year, or $214 on $10,000 in the first year under the SEC's standard example. It launched in 2018, so it has no record from the 2008 crisis. In the COVID crash it lost 50.96% in the first quarter of 2020, then gained 45.22% the next quarter. In 2022 it fell about 21% between January and October, its worst calendar year, and took about 15 months to recover, until December 29, 2023.

Someone drawing income in a year like that might have to sell shares after a deep drop and lock in the loss. The fund's borrowing can also force it to sell holdings at poor prices. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).