As the Federal Reserve navigates a shifting policy landscape under new chair Kevin Warsh, investors are grappling with uncertainty over the direction of interest rates. Amid this backdrop, the Infrastructure Capital Equity Income ETF (NYSE: ICAP) offers a strategy focused on maximizing income and total return through large-cap equity securities that pay dividends.
Warsh, who succeeded Jerome Powell, has emphasized price stability over labor market concerns and has indicated a desire for the Fed to communicate less about monetary policy. At his first meeting in June, the Fed held the federal funds rate steady at 3.5% to 3.75%, disappointing President Donald Trump, who had expected a cut. However, Warsh's tough stance on inflation has led some analysts to predict three rate hikes in 2026—in September, October, and December—each of 0.25%. Others argue that energy-driven inflation, which contributed to a 4.2% increase in May, may ease once the war in Iran concludes, potentially allowing the Fed to hold or cut rates.
This back-and-forth creates challenges for income-seeking investors, as tariffs, high energy costs, and sticky inflation have hurt corporate profits in certain sectors. Many have shifted from speculative growth stocks to income-paying large caps. Infrastructure Capital Advisors believes investors do not need to pick a side in the rate debate. Instead, they can use the Infrastructure Capital Equity Income ETF to gain exposure to high-quality dividend-paying large caps while waiting for clarity.
ICAP, which had $113 million in assets under management as of July 8, 2026, invests at least 80% of its net assets in a diversified portfolio of large-cap equity securities that pay dividends. The fund is actively managed by Infrastructure Capital Founder, CEO, and Portfolio Manager Jay D. Hatfield, who brings nearly thirty years of experience in financial markets. Hatfield also manages the InfraCap Small Cap Income Fund (NYSE: SCAP), InfraCap MLP ETF (NYSE: AMZA), InfraCap REIT Preferred ETF (NYSE: PFFR), Virtus InfraCap U.S. Preferred Stock ETF (NYSE: PFFA), and a series of hedge funds. Infrastructure Capital Advisors reports managing more than $3.5 billion in total assets as of June 30, 2026.
Hatfield employs a hands-on approach to selecting companies for ICAP, including maintaining proprietary company models, establishing price targets using a dynamic relative valuation framework, and employing a selective option writing strategy with modest leverage of typically 15-30% to enhance income while retaining upside market exposure. Investors receive monthly payouts or reinvested income.
Core holdings include Citizens Financial Group Inc., NextEra Energy Inc., Marvell Technology Inc., and Toll Brothers Inc., providing diversified exposure across industries. Fund holdings are subject to change; current top ten holdings can be viewed here.
As markets await the Fed's next move, ICAP offers a way to seek income and total return through high-quality large-cap stocks, potentially shielding against volatility and inflation. For more information, click here.
Past performance does not guarantee future results. Investing involves risk, including possible loss of principal. Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. A prospectus is available here.
