Investors are grappling with uncertainty over whether the Federal Reserve will continue raising interest rates or hold them steady as 2027 approaches. Inflation remains above the Fed's target, and unemployment sits at a healthy 4%, factors that typically prompt Fed intervention. Yet economists and some Fed governors are split on whether a rate hike will tame rising prices, pointing instead to geopolitical tensions and tariffs. Meanwhile, the White House would prefer new Fed chair Kevin Warsh to keep rates steady or even cut them, though the odds of a cut were slim at the Fed's September 15-16 meeting. This uncertainty is fueling market volatility and putting income-seeking investors on edge. Historically, if the Fed raises rates, cash investments like savings accounts and new bonds pay more, but older bonds and growth stocks may suffer. If rates stay steady, stocks might stabilize, but cash earnings stall. In such an unpredictable environment, an actively managed ETF can adjust on the fly to help keep income flowing without taking on extra risk.
That is the approach taken by the Infrastructure Capital Bond Income ETF (NYSE: BNDS), which aims to maximize income and provide capital appreciation. The fund invests at least 80% of its assets in fixed-income securities, primarily corporate bonds, focusing on sectors and issuers with strong cash flows and pricing power. The management team combines quantitative and qualitative analysis to evaluate relative value opportunities across fixed-income markets, then applies fundamental analysis to assess issuers' financial health and ability to service debt. This active management allows BNDS to opportunistically employ an option-writing strategy to enhance income. While high-yield bond funds can be volatile, the fund's managers believe that adding options can turn volatility into higher premiums for option sellers, providing an additional income source. Distributions are monthly, and the fund had a 30-day SEC yield of 8.01% as of September 9, 2026.
Actively managed ETFs may seem rare in the age of self-directed investing, but they can gain importance when market volatility and uncertainty are high. Individual investors can build their own portfolios, but that requires time, knowledge, and skill. BNDS is structured to seek asymmetric income-generating opportunities, and the financial services provider's decades of experience help it identify what to look for and what pitfalls to avoid. At the helm is Jay D. Hatfield, founder, CEO, and portfolio manager of Infrastructure Capital Advisors. With nearly three decades of experience across investment banking, hedge fund management, and portfolio construction, Hatfield has focused on income-generating securities and companies tied to real assets like energy infrastructure and real estate. Before launching Infrastructure Capital, he co-founded NGL Energy Partners and managed income-oriented portfolios at SAC Capital (now Point72) and Zimmer Lucas Partners. That deep background informs BNDS's disciplined approach to corporate bond selection, combined with tactical enhancements like option writing.
For investors seeking to maximize income with the help of options and seasoned professionals, BNDS may be worth considering. To learn more about the Infrastructure Capital Bond Income ETF (BNDS), click here. Performance data quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please call 800-617-0004 or visit the fund's website.
