The fund will seek to invest broadly in companies with proven track records of dividend payouts during normal market conditions, and the portfolio manager is Jay D. Hatfield, the InfraCap founder and CEO.
ICAP’s portfolio will contain a diverse array of securities that spreads broadly across sectors and industries such as utilities, REITs, industrials, financials, and pipelines, to name a few.
“Investors are always looking for income, however, today’s historically low interest rate environment and considerable inflation pressures make it difficult to identify income opportunities,” said Hatfield in the press release. “We are very pleased to be bringing ICAP to market at this time, as this highly differentiated equity income approach seeks to provide investors and advisors with a key building block in constructing a well-diversified income-generating portfolio.”
The fund will also seek to increase yield while decreasing portfolio beta during normal market conditions by investing in select preferred securities handpicked by the portfolio manager. Hatfield brings a wealth of experience with preferred-focused portfolios as the portfolio manager of InfraCap’s preferred stock ETF.
ICAP can invest in securities of any market cap, and invests primarily in U.S. companies. The fund can also purchase and write put and call options on its securities and equity security indexes in order to try and generate income, reduce the fund’s volatility, or to hedge against risk within the market or risks within the portfolio, per the prospectus, and will engage in swap agreements.
The fund can also engage in short sales of its securities, in which a security is borrowed and sold at current market price with the anticipation of buying the security back at a lower price when it is time to be returned; securities will not be sold short if the market value of what is sold is greater than 20% of the fund’s net assets.
ICAP can also invest up to 20% of the fund in fixed income securities of different durations, maturities, and credit quality, including junk bonds. It is also able to borrow up to a third of its total assets from banks for the purpose of investing and leveraging. Under normal market conditions, the fund seeks to have between 20–30% of its assets leveraged.
ICAP is actively managed and carries an expense ratio of 0.80%.
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