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VanEck’s Preferred Securities ex Financials ETF, known by its ticker PFXF, has built a $209.41 million position in Strategy Inc’s Stretch preferred stock. The fund now holds approximately 2.42 million shares of STRC, the company’s Variable Rate Series A Perpetual Stretch Preferred Stock.
What STRC actually is, and why a yield fund wants it
STRC launched in late July 2025 as part of Strategy’s expanding suite of capital market instruments. Strategy Inc, the company formerly known as MicroStrategy before its rebrand, has been on a years-long mission to turn itself into a publicly traded Bitcoin holding vehicle, and STRC is the latest tool in that toolkit.
The preferred stock pays a 12% annualized dividend rate, distributed in cash on a semi-monthly basis.
STRC has a $100 par value, but recent trading prices have lingered in the mid-to-high $80s. When you’re collecting a 12% coupon on a security you bought at a discount to par, the effective yield climbs above 13%.
STRC now constitutes roughly 8-9% of the entire PFXF portfolio. PFXF was launched in 2012 with an expense ratio of 0.40%, and its entire thesis revolves around owning preferred securities outside the financial sector, explicitly excluding bank-issued preferreds.
Strategy’s preferred stock machine
The STRC security includes a price mechanism aimed at keeping its trading price near the $100 par value, though the current discount to par suggests the market is pricing in some risk premium.
Strategy’s approach has essentially created a new category of crypto-adjacent securities that don’t require holders to own a single satoshi of Bitcoin directly. The preferred dividends get paid in cash, not crypto. The underlying company just happens to hold a massive Bitcoin treasury.
This distinction matters enormously for institutional investors operating under mandates that may restrict direct cryptocurrency holdings but have no issues with preferred stock issued by a Nasdaq-listed company.
What this means for investors
With STRC offering effective yields above 13%, it stands out in a landscape where most investment-grade preferred securities offer considerably less. VanEck appears to be overweighting high-yielding non-financial preferreds as a deliberate strategy, and Strategy’s offering fits that thesis.
Strategy’s ability to maintain that 12% dividend depends on its overall financial health, which is deeply intertwined with Bitcoin’s price. A sustained Bitcoin downturn could pressure the company’s balance sheet and, by extension, its preferred dividend payments. The discount to par that STRC currently trades at suggests the market is already pricing some of that uncertainty.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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