PFF vs PFFR

PFFAiShares Preferred and Income Securities ETF

PFFRCInfraCap REIT Preferred ETF

In short

PFF Preferred stock is a clumsy market to shop one issue at a time. PFF, running since 2007, bundles roughly 500 US dollar preferreds and hybrids into a single heavily traded ticker and pays out monthly.

PFFR Most real estate ETFs buy the landlords' common stock. PFFR buys their preferred shares instead: an index of roughly 110 US-listed REIT preferreds, income-driven by design, paid out monthly.

Stated mandate

PFF The fund seeks to track an index of U.S. dollar-denominated preferred and hybrid securities, providing exposure to preferred stock and subordinated debt with an income-oriented mandate.

PFFR The Fund seeks to track, before fees and expenses, the price and yield performance of the Indxx REIT Preferred Stock Index.

Why people hold it

• PFF One ticker buys roughly 500 US dollar preferreds and hybrids tracking the ICE Exchange-Listed Preferred & Hybrid Securities Index, a corner most investors can't assemble issue by issue.
• Distributions land monthly rather than quarterly, a steadier rhythm for anyone spending the income.
• A multi-billion-dollar fund that trades actively, so getting in and out is rarely the hard part.
• Live since 2007, through the financial crisis and several rate cycles, with the same income-oriented mandate from a large index shop.

• PFFR A pure play on one narrow layer of the capital stack: normally at least 90% of assets in preferred securities issued by REITs and listed on US exchanges. Broad REIT funds skip this layer.
• Rules-based, not a manager's hunch. It tracks the Indxx REIT Preferred Stock Index, so what's inside follows a published methodology.
• Distributions arrive monthly, and the fund has been trading since 2017, so there's a real-world record behind it rather than a backtest.

Worth knowing

• PFF 0.45% a year is the going rate in this niche (the peer median), but it's many times what broad stock index trackers like VT charge.
• Preferreds and subordinated debt are hybrids: they rank below an issuer's senior bonds, so this trades on credit and rate conditions more than on earnings growth.
• The mandate is US dollar issuers only, so there's no international preferred exposure here.

• PFFR 0.45% a year sits above the real estate cohort median of 0.37%, and plain REIT trackers like SCHH (0.07%) and VNQ (0.13%) cost a fraction of it.
• Thinly traded compared with mainstream real estate ETFs, so spreads and order type matter more here than with the household names.
• Preferreds act more like bonds than landlord equity: they rank above common stock but behind a REIT's lenders, and interest rates drive them as much as property values do.

Full PFF profile⁠

Full PFFR profile⁠