A new income-focused exchange-traded fund began trading last week: Virtus InfraCap Preferred and Income Securities ETF (NYSEARCA:VPFF). The fund is issued through ETFis Series Trust I, with Virtus Investment Partners as sponsor and Infrastructure Capital Advisors, LLC serving as sub-adviser. Its summary prospectus is dated July 9, 2026, and shares are listed on NYSE Arca. VPFF opened for trading around $25.15 on July 15, 2026 and closed at $25 on July 21.
The fund carries a gross and net expense ratio of 0.80%, which works out to about $80 a year on a $10,000 investment. According to the prospectus, VPFF seeks to provide a high level of current income, with capital appreciation as a secondary goal. As of launch, no distributions have been declared, and initial holdings have not yet been disclosed in a public filing.
What the Fund Does
VPFF is an actively managed ETF, meaning a portfolio team picks the holdings rather than tracking an index. That team sits at Infrastructure Capital Advisors, the same shop behind the leveraged preferred fund Virtus InfraCap U.S. Preferred Stock ETF (NYSEARCA:PFFA). The strategy centers on preferred stock, a hybrid security that sits between bonds and common stock in a company’s capital structure. Preferred shareholders get paid dividends before common stockholders and rank ahead of them in a bankruptcy, but sit behind bondholders.
The prospectus says the fund can hold floating and fixed-rate preferred stock, callable and convertible preferred, baby bonds, senior notes, and other securities with similar economic characteristics. The sub-adviser evaluates issuers using quantitative, qualitative and relative valuation factors, weighing competitive position, return on capital, cash generation, and access to funding. For callable preferreds (which the issuer can buy back at a set price), the sub-adviser generally underweights or eliminates names trading above the call price with low or negative yield-to-call.
Two structural features matter here. VPFF is non-diversified, so it can put a larger slice of assets into a single issuer than a diversified fund. It can also concentrate by sector: as of the prospectus date, the fund focused its investments in the real estate and financial sectors. It may hold up to 10% of total assets in foreign income securities, and generally sticks to issuers with market capitalizations over $100 million.
Why It Exists and How It Stacks Up
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Preferred stock has become a familiar tool for income investors as the 10-year Treasury yield sits at 4.60% as of July 20, 2026 and the federal funds rate holds at 3.75%. Existing rivals include the iShares Preferred and Income Securities ETF (NYSEARCA:PFF), the Invesco Preferred ETF (NYSEARCA:PGX), and InfraCap’s own actively managed and leveraged PFFA. VPFF’s 0.80% fee is meaningfully above passive incumbents that charge in the 0.45% to 0.50% range, but roughly in line with other actively managed preferred funds. The extra cost, per the issuer’s rationale, buys human judgment on call risk, sector tilts, and security selection rather than a mechanical index weighting.
Who It Might Suit, and the Risks
The fund is designed for investors who want a steady stream of dividend income from a diversified basket of preferred securities and are comfortable with equity-like price swings. Investors should weigh several caveats:
- No track record. With only five trading days of history, there is no performance to evaluate. New ETFs also often trade with wider bid-ask spreads until assets build, and funds that fail to gather assets sometimes close.
- Concentration. The non-diversified structure and current tilt to real estate and financials means the fund’s fortunes are tied closely to those sectors and to interest rates.
- Preferred-specific risks. The prospectus flags deferral and omission risk, where issuers can defer distributions while the fund still reports taxable income, plus subordination to regular bonds in a bankruptcy.
- Rate sensitivity. Preferreds tend to behave like long-duration bonds, so their prices can fall when yields rise.
The near-term signals to watch are straightforward: how quickly VPFF gathers assets, the size of its first distribution, the sector mix once holdings are published, and how the fund trades relative to its net asset value during its early months on the market.
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