Infrastructure Capital partners with HANetf to launch preferred equity ETF

Infrastructure Capital Advisors has teamed up with white-label platform HANetf to launch an ETF investing in US ‘preferreds’ – a hybrid security that combines features of debt and equity.

The Infrastructure Capital Preferred Income UCITS ETF (PFFI) debuts with a total expense ratio (TER) of 0.80% and is listed on Deutsche Boerse with additional listings on Borsa Italiana and the London Stock Exchange to follow.

PFFI will be actively managed and looks to beat its benchmark of US preferred stocks by capitalising on pricing inefficiencies thrown up by changes in interest rates, credit risk and market dislocations. It will pay monthly distributions.

Preferred stocks, or ‘preferreds’, sit between debt and equity in a company’s capital stack and offer priority on dividends and liquidation payouts but often with reduced voting rights.

They typically pay dividends on a quarterly basis and are known as perpetual instruments meaning they do not mature like a bond.

PFFI will be managed by New York-based Infrastructure Capital Advisors – a $2.5bn boutique which built its reputation in preferred securities.

The firm has five US-listed ETFs including the Virtus InfraCap U.S. Preferred Stock ETF (PFFA) which houses $1.9bn in assets, according to Trackinsight data.

Commenting on the launch, Jay Hatfield, CEO and CIO at Infrastructure Capital Advisors, said: “We are excited to bring our preferred income strategy to global markets. We believe it’s an opportune time for global investors to capture higher yielding income investments as interest rates are falling globally.”

Hatfield is a vocal critic of the Federal Reserve’s recent handling of interest rates and was quoted by US President Donald Trump in a recent Truth Social post saying: “The entire Organization [the Fed] is broken. It needs to be fixed. They need to use modern sources of information….We think Incompetence is more important than to defend theoretical independence.”

For HANetf, PFFI is the fourteenth active ETF to list via its white-label platform and the firm recently signalled an intensified push to attract US managers by making its first dedicated business development hire in the region.

Hector McNeil, co-founder and co-CEO of the white-labeller, commented: “With Infrastructure Capital’s research-driven active management process, we believe this fund offers a compelling alternative to traditional passive income strategies – providing the flexibility to capture attractive yield opportunities while managing downside risk.”

Invesco has two passively managed preferred equity ETFs housing a total of $219m in assets under management, according to ETFBook figures.