Infrastructure Capital (ICA) has announced the launch of the Infrastructure Capital Nasdaq Option Income ETF (QVOL), listed on the Nasdaq. The fund aims to provide investors with high monthly income and capital appreciation through exposure to companies in the Nasdaq Composite Index, combining active equity selection with an options overlay strategy designed to capture income from volatility in the technology sector.
Unlike traditional buy-write funds that systematically write long-duration options on an index, QVOL will actively manage both its equity portfolio and option activity in tandem. The fund seeks to write options on Nasdaq equities or indexes that it believes are overvalued, using short-duration options to limit the upside cap often associated with option writing. This approach is intended to allow QVOL to participate in greater market upside compared to many competitors while generating annual premium from option writing.
QVOL has the flexibility to select investments across the Nasdaq Composite Index, which includes a broad range of technology companies. According to ICA, the Nasdaq Composite Index and the Nasdaq-100 Index are highly correlated, with the top holdings substantially overlapping due to market-cap weighting. This gives QVOL exposure to major tech companies such as the Magnificent Seven while offering more investment opportunities.
The fund employs ICA's active management approach, selecting equities and options based on quantitative, qualitative, and relative valuation factors. For instance, QVOL may favor stocks with lower relative pricing or higher profitability compared to their index representation. The investment philosophy emphasizes discipline, consistency, and risk management, with sell decisions triggered by excessive valuation, better opportunities, or changes in a company's fundamentals.
Infrastructure Capital manages over $3.5 billion in total assets and offers a lineup of ETFs including the Infrastructure Capital Bond Income ETF (BNDS) and the InfraCap MLP ETF (AMZA). Jay Hatfield, lead portfolio manager with more than 30 years of experience, oversees all ICA funds.
Investing involves risks, including potential loss of principal. The fund is newly organized with no operating history. Derivatives, including options, involve additional risks such as leverage, imperfect correlation, and liquidity issues. Leverage from borrowing or derivatives may amplify losses. A high portfolio turnover rate could result in higher capital gains distributions.
For more information, visit https://www.infracapfunds.com.
QVOL is distributed by Quasar Distributors, LLC.
