With the Federal Reserve’s next moves on interest rates shrouded in uncertainty, income-seeking investors are increasingly turning to actively managed strategies that can adapt to changing conditions. The Infrastructure Capital Bond Income ETF (NYSE: BNDS) is positioning itself as a solution that seeks to provide both income and capital appreciation, even as volatility persists.
The central question facing markets is whether the Fed will continue to raise rates or hold them steady. Inflation remains above the Fed’s target, and unemployment is at a healthy 4%, traditionally a sign that the central bank might need to intervene. Yet economists and some Fed governors are split on whether a rate hike will be enough to tame rising prices, pointing to geopolitical tensions such as the war in Iran and tariffs rather than underlying economic issues. Meanwhile, the White House would prefer new Fed chair Kevin Warsh to keep rates steady or even cut them, though the odds of a cut were already slim when the Fed met on September 15 and 16. This uncertainty is adding to market volatility, putting income investors on edge.
Historically, if the Fed raises rates, cash investments like savings accounts and money market funds pay more income, but older bonds and growth stocks could suffer. If rates stay steady, stocks might stabilize, but cash earnings stop growing. In such an unpredictable environment, an actively managed ETF can adjust on the fly to help keep income flowing without taking on extra risk.
That is precisely what the portfolio managers of BNDS aim to do daily. The fund’s primary objective is to maximize income, with a secondary goal of capital appreciation. According to the fund, it generates elevated yield by investing at least 80% of its total assets in fixed-income securities, primarily corporate bonds. The team focuses on sectors and issuers with strong cash flows and pricing power. When selecting securities, the managers use a flexible mix of quantitative and qualitative analysis to evaluate relative value opportunities across fixed-income markets. They then apply fundamental analysis to issuers, reviewing enterprise value, capital ratios, and operating metrics to assess financial health and debt-servicing ability.
What sets BNDS apart from many other income-focused ETFs is its active management, which allows it to opportunistically employ an option-writing strategy to enhance income. While high-yield bond funds can be volatile, especially amid Fed uncertainty, the fund’s managers believe that by adding options, volatility can translate into higher premiums for option sellers, providing an additional source of income. Distributions are monthly, and the fund had a 30-day SEC yield of 8.01% as of September 9, 2026.
Actively managed ETFs may seem rare in the age of self-directed investing, but they can gain importance when market volatility and uncertainty are high. While individual investors can build their own portfolios, that requires time, knowledge, and skill—all of which the team at Infrastructure Capital can provide. BNDS is structured to seek and extract asymmetric income-generating opportunities, and the firm’s decades of experience help it identify what to look for and what pitfalls to avoid.
At the helm of BNDS is Jay D. Hatfield, founder, CEO, and portfolio manager of Infrastructure Capital Advisors. With nearly three decades of experience across investment banking, hedge fund management, and portfolio construction, Hatfield has focused on income-generating securities and companies tied to real assets like energy infrastructure and real estate. Before launching Infrastructure Capital, he co-founded NGL Energy Partners and managed income-oriented portfolios at SAC Capital (now Point72) and Zimmer Lucas Partners. That deep background matters: Infrastructure Capital reports that Hatfield’s career has been defined by identifying undervalued credit opportunities and structuring strategies to extract reliable cash flows. For BNDS, this translates into a disciplined approach to corporate bond selection, combined with tactical enhancements like option writing.
In uncertain times, investors can go it alone, but for those seeking to maximize income with the help of options and seasoned professionals, BNDS may be worth considering. To learn more about the Infrastructure Capital Bond Income ETF (BNDS), click here.
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please call 800-617-0004 or visit https://infracapfund.com/bnds for performance data current to the most recent month end.
