Fund Summary

Fiscal Year-end: November 30
Portfolio Manager: Flaherty & Crumrine
NYSE Symbol: PFD
CUSIP: 338480106
Inception: January 31, 1991
Inception Market Price: $15.00
Inception NAV: $13.95
Daily Data as of 08/05/22
Market Price$13.28
Market Distribution Rate 26.19%
NAV Distribution Rate 26.53%
Dividend Per Share Amount 1$0.0685
Ex-Dividend Date08/23/22
Payable Date08/31/22
52 Week High/Low Market Price$17.82 / $11.80
52 Week High/Low NAV$15.21 / $11.82
Net Assets$159,841,783
Common Shares Outstanding12,701,140
Annual Data as of 11/30/21
Fiscal Year-End11/30/21
Expense Ratio 31.22%
Portfolio Turnover Rate12.0%
Financial Leverage as of 08/05/22
Leverage Outstanding$91,100,000
1940 Act Asset Coverage Ratio275.5%
Percent Leveraged 436.3%
Monthly Data as of 07/31/22
Effective Duration 5, 73.6
Leverage Adjusted Effective Duration 6, 75.7
Average Coupon6.39%
Number of Holdings217
Monthly Total Return as of 07/31/22
 Market PriceNAV
1 Year-18.5%-11.2%
3 Year0.2%2.7%
5 Year4.0%3.7%
10 Year6.2%7.3%
Since Inception (01/31/91)8.9%9.1%

1 Most recent distribution paid or declared to today’s date. Subject to change in the future.

2 Distribution Rates represent the latest declared regular distribution, annualized, relative to the market price and NAV. Special distributions, including special capital gains distributions, are not included in the calculation.

3 Annualized, excluding interest expense associated with the Fund’s financial leverage strategy for the period ended 11/30/2021. With interest expense included, the annualized expense ratio was 1.67% for the same period.
4 As a percentage of total assets. This figure is calculated on a weekly basis.
5 Effective Duration measures sensitivity to interest rates by indicating an approximate percentage change in the value of the Fund’s managed assets given a 1% change in interest rates. Effective Duration is a duration calculation for bonds with embedded options. It takes into account the expected change in a security’s price caused by the embedded option as U.S. Treasury rates change, assuming the security’s option-adjusted spread to Treasuries remains constant.
6 Leverage Adjusted Effective Duration is the effective duration of the Fund’s net asset value. This calculation includes the impact of the Fund’s use of leverage. Funds that use leverage will have a leverage-adjusted effective duration that is greater than its baseline effective duration.
7 Duration can be measured differently by different analytics tools used by the Fund’s investment adviser. The duration measures presented here may differ from those used to manage the portfolio, or in other presentations describing the portfolio. Also, this duration measure may differ from that used by other funds/advisers or calculation agents, so reported durations of other funds or investment products may not be directly comparable.

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Since Inception returns assume a purchase of common shares at the initial offering price of $13.95 per share for market price returns or initial net asset value (NAV) of $15.00 per share for NAV returns. Returns for periods of less than one year are not annualized. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for market price returns or NAV for NAV returns. Until the DRIP price is available from the Plan Agent, the market price returns reflect the reinvestment at the closing market price on the last business day of the month. Once the DRIP is available around mid-month, the market price returns are updated to reflect reinvestment at the DRIP price.

Investment Objectives and Policies

The Fund’s investment objective is to provide its common shareholders with high current income consistent with preservation of capital. The Fund’s investment objective may not be changed except through an amendment to the Fund’s Articles of Incorporation. Any such amendment would require the affirmative vote of at least 80% of the votes of the Fund’s Common Shares and preferred stock (“Preferred Shares”) entitled to be cast by shareholders, voting together as a single class, and of at least 80% of the votes of the Fund’s Preferred Shares entitled to be cast by shareholders, voting as a separate class; unless such change in investment objective has been approved by the affirmative vote of 80% of the total number of directors of the Fund, in which case only the affirmative vote of a majority of the Common Shares and Preferred Shares entitled to vote, voting together as a single class, is required to approve such amendment. The Fund’s investment policies may be changed by the Fund’s Board of Directors without shareholder approval. However, the Fund’s 80% investment policy described below may only be changed upon 60 days’ prior written notice to the Fund’s shareholders.

Under normal market conditions, the Fund invests at least 80% of its Managed Assets (defined below) in a portfolio of preferred and other income-producing securities. Preferred and other income-producing securities may include, among other things, traditional preferred stock, trust preferred securities, hybrid securities that have characteristics of both equity and debt securities, contingent capital securities (“CoCos”), subordinated debt and senior debt. “Managed Assets” are the Fund’s net assets, plus the principal amount of loans from financial institutions or debt securities issued by the Fund, the liquidation preference of preferred stock issued by the Fund, if any, and the proceeds of any reverse repurchase agreements entered into by the Fund.

The Fund will invest, under normal market conditions, at least 25% of its total assets in the financials sector, which for this purpose is comprised of the bank, thrifts & mortgage finance, diversified financial services, finance, consumer finance, capital markets, asset management & custody, investment banking & brokerage, insurance, insurance brokerage and real estate investment trust (“REIT”) industries. From time to time, the Fund may have 25% or more of its total assets invested in any one of these industries. For example, the Fund could have more than 25% of its total assets in insurance companies, while at other times it could have that portion invested in banks. At all times, though, the Fund would have at least 25% of its total assets invested in the financials sector. In addition, the Fund also may focus its investments in other sectors or industries, such as (but not limited to) energy, industrials, utilities, communications and pipelines. The Adviser retains broad discretion to allocate the Fund’s investments as it deems appropriate considering current market and credit conditions.

The Fund may invest up to 100% of its total assets in securities of U.S. companies, and may also invest up to 30% of its total assets in U.S. dollar-denominated securities issued by companies organized or having their principal place of business outside the United States.

At the time of purchase, at least 85% of the Fund’s total assets will be either (a) rated investment grade by any one of Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”) or (b) issued by companies with issuer or senior unsecured debt ratings that are investment grade by any one of Moody’s, S&P or Fitch. In addition, for purposes of this 85% policy, the Fund may include unrated securities that the Adviser deems to be comparable in quality to rated issues in which the Fund is authorized to invest. Some of the Fund’s total assets may be invested in securities rated (or issued by companies rated) below investment grade at the time of purchase. Securities that are rated below investment grade are commonly referred to as “high yield” or “junk bonds.” Securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to capacity to pay dividends and interest and repayment of principal. Due to the risks involved in investing in securities of below investment grade quality, an investment in the Fund should be considered speculative.

The maturities of securities in which the Fund will invest generally will be longer-term (perpetual, in the case of many preferred securities and CoCos, and ten years or more for other preferred and debt securities); however, as a result of changing market conditions and interest rates, the Fund may also invest in shorter-term securities. The Fund can buy securities of any maturity or duration. Duration is the sensitivity, expressed in years, of the price of a fixed-income security to changes in the general level of interest rates (or yields). Securities with longer durations tend to be more sensitive to interest rate (or yield) changes than securities with shorter durations. For example, a three-year duration means a bond is expected to decrease in value by 3% if interest rates rise by 1% and increase in value by 3% if interest rates fall by 1%.

The portion of the Fund’s Managed Assets not invested in preferred and other income-producing securities may be invested in, among other securities, common stocks, money market instruments, money market mutual funds, asset- backed securities, and securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities (“Government Securities”) and such obligations which are subject to repurchase agreements and commercial paper. Depending on market conditions, these investments may at times have a higher or lower yield than preferred securities and other income-producing securities in which the Fund invests.

Unless designated as a “fundamental policy” and except as described above, the investment limitations and policies of the Fund may be changed by the Board of Directors without shareholder approval.