With the Federal Reserve under new Chair Kevin Warsh signaling a shift toward price stability and potentially multiple rate hikes in 2026, income-seeking investors face a challenging environment. The Infrastructure Capital Equity Income ETF (NYSE: ICAP) offers a solution by focusing on high-quality large-cap stocks that pay dividends, providing both income and total return potential regardless of the Fed's next move.
Warsh left the federal funds rate unchanged at 3.5% to 3.75% in his first meeting in June, but his emphasis on fighting inflation has led some on Wall Street to anticipate three quarter-point rate hikes in September, October and December. Others argue that energy-driven inflation may ease once the war in Iran concludes, suggesting rates could hold or eventually drop. This uncertainty has driven many investors away from speculative growth stocks and into income-paying large caps.
The ICAP ETF, managed by Infrastructure Capital Advisors, seeks to invest at least 80% of its net assets in a diversified portfolio of large-cap equity securities that pay dividends. As of July 8, 2026, the fund held $113 million in assets under management. The ETF is actively managed by founder, CEO and Portfolio Manager Jay D. Hatfield, who brings nearly thirty years of experience in financial markets. Hatfield employs a hands-on approach, maintaining proprietary company models and relationships with management teams to determine earnings estimates and forward-looking outlooks. He also uses a dynamic relative valuation framework based on price, earnings and growth to establish price targets, and employs 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 in the fund include Citizens Financial Group Inc., NextEra Energy Inc., Marvell Technology Inc. and Toll Brothers Inc., providing a diversified basket of leaders across various industries. Holdings are subject to change, and the current top ten holdings can be viewed here.
Infrastructure Capital Advisors manages more than $3.5 billion in total assets as of June 30, 2026, across several funds including the InfraCap Small Cap Income Fund (NYSE: SCAP), InfraCap MLP ETF (NYSE: AMZA), InfraCap REIT Preferred ETF (NYSE: PFFR), and Virtus InfraCap U.S. Preferred Stock ETF (NYSE: PFFA). The ICAP ETF offers investors a way to seek monthly income and protection against market swings while waiting for clarity on interest rates.
As the markets await the Fed's next decision, the ICAP ETF provides exposure to high-quality large-cap stocks that pay dividends, potentially helping investors navigate the current environment of inflation and volatility. The fund's active management and focus on income may be particularly appealing to those who prefer not to speculate on the direction of rates.
