PFF's Shift to Non-Bank Credits Alters Risk Profile

The iShares Preferred and Income Securities ETF (PFF) offers a yield of 5.41% from its diversified pool of preferred and hybrid securities, according to Seeking Alpha.

However, PFF's portfolio has undergone significant changes, with increased exposure to non-bank credits and AI-related convertibles. The fund now holds a 12% perpetual from a bitcoin treasury company, altering its risk profile.

Long-term total returns for PFF have been mediocre, compounding at under 4% annually since 2007 due to callable structures capping upside and leaving downside open.

Analyst's Disclosure: The author has no business relationship with BlackRock or any company mentioned and was not compensated for this article.