When Passive Investing Isn't Enough: Infrastructure Capital Equity Income ICAP ETF Seeks To Help Investors Looking To Capitalize On Volatility
By Meg Flippin, Benzinga DETROIT, MICHIGAN - October 23, 2026 - When it comes to investing in large-cap, dividend-paying stocks, it may not always be enough to select an ETF that tracks the S&P 500 and sit back and watch it appreciate. In the current environment marked by rising interest rates, stubborn inflation and market volatility, doing that may cost you. Passive, broad-market funds can expose investors to overconcentration risk and capped upside potential. They may also lock investors into overvalued large-cap names and fail to adapt when market conditions shift. The passive income-seeking ones may not be much better. They can potentially put investors at a disadvantage because broad index yields are stuck near lows, rigid rules may fail to protect against inflation, and capping upside limits long-term growth. It doesn’t help that inflation is rising, with prices up 3.7% in September, according to the latest Consumer Price Index reading. Passive May Not Be Enough All of that is particularly true in a volatile market where news in one sector can take down the entire market. Or where broad downturns could trigger losses. When things like the Federal Reserve announcing another rate hike - like it did at its most recent meeting in September - tanks the market, a passive ETF can’t react quickly. Investors have to be mindful that even if an ETF or fund layers options on top of its passive strategy, if it remains too rigid, they could still be at a disadvantage. Many of these rules-based ETFs hold a portfolio that mirrors the S&P 500 and sell monthly SPX index call options on 100% of their holdings. Despite using options to generate income, the fund may be forced to lock in losses during market pullbacks and strictly cap its participation in recovery rallies, because it has a rules-based approach. That does not benefit investors as an actively managed fund would. Infrastructure Capital Equity Income ETF: All The Action You Need The Infrastructure Capital Equity Income ETF (NYSE: ICAP) takes an actively managed approach. The fund does not track an index like the S&P 500. Instead, it selects large-cap, dividend-paying companies from a range of sectors using bottom-up fundamental analysis. That way, it is not beholden to one stock, sector, industry or region. Investors aren’t locked into one mega-cap company or overconcentrated in one area. The portfolio construction emphasizes discounted cash flow estimates along with a dynamic valuation screen that includes metrics such as price-to-earnings, enterprise value-to-EBITDA and price-to-funds-from-operations. Holdings are also chosen for their consistent dividends, reasonable payout ratios and the potential for future dividend growth. ICAP also employs a flexible, discretionary options overlay. Rather than systematically overwriting a fixed percentage of the portfolio, the fund sells covered calls on individual stocks. Coverage ratios, strike prices and expirations are all managed dynamically. Hands-On Approach Gives Investors An Edge The fund is able to do that because it is run by Infrastructure Capital Founder, CEO and Portfolio Manager Jay D. Hatfield, who brings with him nearly thirty years of experience in the financial markets, offering a broad perspective on stocks, options and investing. Thanks to his extensive experience as an investment banker, portfolio manager and research director, investors get access to a seasoned money manager who has created his own approach to investing. Hatfield has a hands-on approach to selecting companies for the ICAP ETF that includes maintaining proprietary company models and relationships with the management teams to determine earnings estimates and forward-looking outlooks, establishing price targets using a dynamic relative valuation framework based on the relationship between price, earnings and growth and employing a selective option writing strategy and modest leverage of typically 15-30% to enhance income while retaining upside market exposure. Plus, investors get either a monthly payout or income that is reinvested. Holdings are subject to change. Please see current top ten holdings by clicking here. Inflation is rising, the Fed is still raising rates and the markets are reacting. Passive investing in this environment can almost feel like a fool's game sometimes, especially if you are seeking income. The Infrastructure Capital Equity Income ETF (ICAP) takes an active approach. To learn more about the ICAP ETF, click here. Featured image from Shutterstock. This content was originally published on Benzinga. Read further disclosures here. This post contains sponsored content and was created in collaboration with a third-party partner. Benzinga is a publisher and does not provide personalized investment advice or act as a broker or dealer. This content is for informational purposes only and is not intended to be investing advice or an offer or solicitation to buy or sell any security.