Why These 9% Yield ETFs Never Leave My Portfolio

In my world of income investing research and publishing, it’s easy to get wrapped up in reviewing the newest, hottest investment ideas. I’ve added more than 80 funds to my option-strategy ETF database over the last two years. These new funds are exciting, but our goal is to generate stable high-yield income, and some old standby ETFs continue to deliver what investors need.

I view two ETFs from Infrastructure Capital Advisors as core holdings for any investor focused on generating a high-yield income stream.

The Virtus InfraCap U.S. Preferred Stock ETF (PFFA) launched on May 15, 2018. PFFA is an actively managed fund, and,as the name implies, it invests in preferred stocks. Active management pays dividends (pun intended), as PFFA has significantly outperformed the index-tracking iShares Preferred and Income Securities ETF (PFF). The total returns for the last three years are 60.6% for PFFA, compared to 28.2% for PFF.

PFFA pays a slowly growing monthly dividend. It was $0.15 per share in 2020 and is now up to $0.175 per share. This dividend yields 9.5%. It’s an income stream you can count on for years.

The InfraCap Equity Income Fund ETF (ICAP) was launched on December 28, 2021. ICAP is an actively managed large-cap stock fund that uses a GARP (Growth at a Reasonable Price) investment strategy.

Fund managers use selective option writing (selling) and moderate leverage to enhance the portfolio’s income.

ICAP pays monthly dividends, which have grown from $0.18 per share in 2022 to a current $0.25 per share—almost 40% dividend growth in less than five years. ICAP currently yields 9.4%. The three-year total return is 65.8%.

PFFA and ICAP are a couple of ETFs that you can’t own too much of. Both have been in my Dividend Hunter-recommended portfolio since shortly after they each launched.