PFFA: The Junk Every One Likes For No Real Reason

Summary

• PFFA's portfolio is filled with low-quality, high-yield preferred stocks, with only 5% investment-grade securities, exposing investors to significant credit risk.
• Investors may not be getting the full picture about the fund's actual risk-adjusted performance due to its use of leverage and low credit ratings.
• PFFA's active management strategy appears flawed. It holds numerous losing positions and fails to capitalize on market inefficiencies, contradicting the market perception of generating alpha.
• Investors should be cautious of PFFA's high management fee and the fund's overall stock-picking skills, which undermine its purported advantages.