The Federal Reserve's policy direction under new Chair Kevin Warsh remains uncertain, with Wall Street divided on whether the central bank will cut, raise, or hold interest rates at its September meeting. Amid this uncertainty, the Infrastructure Capital Equity Income ETF (NYSE: ICAP) offers investors a way to seek income and total return through large-cap equity exposure.
At its June meeting, Warsh's first as chair, the Fed left the federal funds rate unchanged at 3.5% to 3.75%, defying President Donald Trump's expectations of a cut. Warsh has signaled a focus on price stability, and some analysts anticipate three quarter-point rate hikes in 2026—in September, October, and December. However, others argue that inflation, which hit 4.2% in May, may be easing as energy-driven price pressures subside, potentially leading to rate cuts or holds.
This back-and-forth creates challenges for income-focused investors, who have increasingly turned to large-cap dividend-paying stocks as speculative growth stocks falter under tariffs, high energy costs, and sticky inflation. The Infrastructure Capital Equity Income ETF (ICAP) aims to provide a gateway to such quality yield without forcing investors to pick a side in the rate debate.
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 Jay D. Hatfield, founder, CEO, and portfolio manager of Infrastructure Capital Advisors, who brings nearly three decades of experience. Hatfield also manages other 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), with Infrastructure Capital Advisors overseeing more than $3.5 billion in total assets as of June 30, 2026.
Hatfield employs a hands-on approach for ICAP, including proprietary company models and management team relationships to estimate earnings and outlooks, dynamic relative valuation frameworks for price targets, and a selective option writing strategy with modest leverage of typically 15-30% to enhance income while retaining upside market exposure. The fund offers 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, and current top ten holdings can be viewed here.
As markets await the Fed's next move, ICAP offers a way to seek monthly income and an active shield against market volatility through high-quality large-cap stocks.
