Infrastructure Capital (ICA) announced the launch of the Infrastructure Capital Nasdaq Option Income ETF (QVOL), a new fund listed on Nasdaq that seeks to provide investors with high monthly income and capital appreciation through exposure to companies in the Nasdaq Composite Index. The ETF is designed to address the tradeoff between yield and capital appreciation by actively managing both equity and option positions.
QVOL aims to capture income from the volatility-heavy technology sector while positioning its equity portfolio for growth. Unlike competitor buy-write and option overlay strategies, ICA will actively manage the construction of QVOL’s equity portfolio and option activity in tandem. This approach seeks to capture upside while generating premiums from option writing. QVOL can selectively write options on Nasdaq equities or indexes to achieve high income, targeting annual premium from option writing through short-duration option activity to limit potential upside cap.
The fund has the flexibility to select investments across the Nasdaq Composite Index, which includes a broad range of technology-related companies. Due to the high correlation between the Nasdaq Composite Index and the Nasdaq-100 Index, QVOL provides exposure to major tech companies, including the Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla), while offering more investment opportunities. ICA believes this broader exposure will support QVOL’s performance.
ICA’s active management approach involves selecting investments based on quantitative, qualitative, and relative valuation factors. The team emphasizes companies with favorable relative value, such as lower relative priced stocks or those with higher profitability compared to their index representation. Factors considered include price-to-book value, enterprise values, capital ratios, and other financial metrics like price-to-cash flow or price-to-earnings ratios.
QVOL’s investment philosophy is driven by discipline, applied consistently, and centered around risk management. Transactions are executed only after considering the time horizon and portfolio positioning. The sell discipline includes factors such as excessive valuation, opportunities to shift to more favorable investments, lack of confidence in the original thesis, and changes in the company’s fundamental position.
QVOL is listed on Nasdaq and joins ICA’s ETF lineup, which includes the Infrastructure Capital Bond Income ETF (BNDS), Infrastructure Capital Small Cap Income ETF (SCAP), Virtus U.S. Preferred Stock ETF (PFFA), REIT Preferred ETF (PFFR), InfraCap MLP ETF (AMZA), and the Infrastructure Capital Equity Income ETF (ICAP). Jay Hatfield, lead portfolio manager for all ICA funds, brings over 30 years of experience. As of the date of the announcement, the firm manages more than $3.5 billion in total assets.
Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus with this and other information about the Fund, please click here or call 800-617-0004. The Fund is distributed by Quasar Distributors, LLC.
