HANetf Launches PFFI, an Active Income ETF for Infrastructure

It aims to generate monthly income and exploit upside opportunities.

In a market still searching for yield in an environment of historically low interest rates, the range of income instruments is enriched by a new proposal. LSE welcomes the Infrastructure Capital Preferred Income UCITS ETF (PFFI), an actively managed fund from HANetf II ICAV that promises to find opportunities in the complex universe of infrastructure-related securities.

As stated in the offering document, the fund’s objective is twofold: to maximize current income and to identify medium-to-long-term capital appreciation strategies. This is an ambitious mission that the manager intends to pursue not with a passive strategy, but through an active and dynamic selection of a basket of securities.

The Core of the Strategy: Preferred Securities and Mortgage REITs

PFFI primarily invests in a portfolio of preferred, hybrid, and other income-generating securities. The manager specifically targets corporate issuers in North America and Europe. However, it is the specific allocation that captures the interest of more demanding investors: under normal circumstances, the fund will invest at least 80% of its assets in North American and European mortgage REITs and preferred stocks from the same sector.

Mortgage REITs do not own physical properties but invest in mortgages and mortgage-backed securities (MBS), profiting from the flow of interest. This makes them instruments sensitive to interest rates, but potentially able to offer higher yields compared to traditional REITs, albeit with a different risk profile.

The arrival of the Infrastructure Capital Preferred Income UCITS ETF on LSE represents a niche yet significant choice. It targets sophisticated investors seeking high and potentially stable income, who are willing to accept the intrinsic risks of an actively managed fund and a sector—mortgage REITs—that is known to be cyclical and sensitive to monetary policy.