PFF - HPI: This Fund Is Navigating The Current Environment Well But It Is Pricy

2024-06-03 17:30:00 ET

Summary

• The John Hancock Preferred Income Fund offers an attractive 8.88% yield, one of the highest among preferred stock funds.
• The fund's current yield may not keep up with rising living costs if held in a taxable account.
• The fund has outperformed its benchmark indices and has a relatively stable distribution history, but its portfolio allocation and valuation should be considered.
• The fund has a surprisingly large corporate bond allocation, which might be a drag on its performance. However, it appears to be reducing its overall portfolio risk.
• The fund has been managing to cover its distribution in the current fiscal year, but there is a chance that this could change if the market corrects.

The John Hancock Preferred Income Fund ( HPI ) is a closed-end fund that can be purchased by income-focused investors as a method of achieving their goals that involve the generation of a large amount of income from the assets in their portfolios. The fund manages to do fairly well at this, as it currently boasts an attractive 8.88% yield at the current share price. This is one of the highest yields currently possessed by any preferred stock fund, as we can clearly see here:

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