Infrastructure Capital Advisors is targeting small-cap U.S. companies poised to deliver income and growth potential with its latest active ETF. The InfraCap Small Cap Income ETF (SCAP ) will place a particular emphasis on small-cap equities considered value stocks. Jay Hatfield, InfraCap’s founder, CEO, and portfolio manager, will manage the fund.
Small-caps are enjoying their time in the sun. A cooler-than-expected October CPI report pushed the Russell 2000 to rally last month and enter positive territory. In fact, the Russell 2000 is up nearly 8% year to date as of December 11.
See more: Small Caps Rally Following CPI Report
“Small-cap stocks are trading at historically low prices and may be poised for a bounce-back year in 2024,” Hatfield said. “We believe that substantial alpha can be added through active management of the less efficient small-cap sector.”
He added that “investors and advisors understand the role that small-cap exposure can play in a growth-focused approach.” However, “the role this kind of exposure can play in an income-generating portfolio” is “less understood.”
A Blended Approach for Seeking Total Return
SCAP will seek total return through a blended approach of capital appreciation and current income. The fund will focus primarily on the securities of U.S.-listed small-cap companies. Investments may include common stocks, preferred stocks, convertible securities, debt instruments, equity-linked notes, or other small-cap-focused ETFs.
The fund charges 80 basis points.
SCAP joins a lineup of InfraCap ETFs that includes the Virtus InfraCap U.S. Preferred Stock ETF (PFFA ), the InfraCap REIT Preferred ETF (PFFR ), the InfraCap MLP ETF (AMZA ), and the InfraCap Equity Income Fund ETF (ICAP ). Hatfield is the lead portfolio manager for all of InfraCap’s funds.
InfraCap manages more than $1.5 billion in assets.
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