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High 6.76% yield of PFF ETF masks 5-year after-tax loss of -1.34% in taxable accounts

Market News
19 Oct 2026
24/7 Wall Street
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Bearish
High 6.76% yield of PFF ETF masks 5-year after-tax loss of -1.34% in taxable accounts

The iShares Preferred and Income Securities ETF (PFF) offers a headline yield of 6.76%, attracting retirees seeking income. However, after accounting for federal taxes on distributions, the fund's five-year average annual return in taxable accounts is actually -1.34%, according to BlackRock's data as of September 30, 2026. The fund faces risks from issuer calls, limited upside participation, and interest rate sensitivity, which have impacted returns. PFF may suit investors needing income in tax-deferred accounts but can mislead those in taxable accounts who focus only on yield without considering tax effects and capital losses.

While PFF's yield attracts income-focused investors, BlackRock Inc. (BLK), the fund's manager, is trading at USD 1,127.27 on Pluang as of Oct 20, 2026 07:11 WIB, down 0.63% for the day. The stock's dividend yield is 2.02%, and most Pluang users are selling, with 84% of orders as of that time. This context highlights investor caution around BlackRock amid the challenges noted for PFF's returns in taxable accounts.

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