As the Federal Reserve signals further interest rate increases to combat persistent inflation, investors are reassessing their portfolios, particularly in rate-sensitive sectors like technology and real estate. According to a recent press release from NEWMEDIAWIRE, many investors are turning to small-capitalization stocks as a potential source of growth and income. Small-cap companies, often at the beginning of their business cycle, may offer bargains and upside that larger, more heavily covered firms do not.
The Russell 2000 Index, which tracks 2,000 small-cap U.S. companies, is up 13% year-to-date as of October 5, 2026, with industrials, financials, and energy driving most of the gains. Similarly, the S&P SmallCap 600 has risen nearly 15% over the same period, led by the same sectors. These returns suggest that investors are finding value in smaller companies that are less sensitive to interest rate fluctuations and may have more room to grow.
For those seeking both income and growth, small-cap dividend stocks can be particularly attractive. Some offer yields that outpace large-cap counterparts, providing regular income that can buffer against market volatility. However, identifying reliable small-cap income generators requires careful analysis and experienced management. The Infrastructure Capital Small Cap Income ETF (NYSE: SCAP) aims to fill that need. The actively managed fund invests at least 80% of its net assets in an income-oriented portfolio of small-cap stocks, targeting above-average yield.
SCAP is managed by Jay D. Hatfield, founder, CEO, and portfolio manager of Infrastructure Capital. With nearly thirty years of experience in financial markets, Hatfield brings a deep understanding of stocks, options, and investing. His background as an investment banker, portfolio manager, and research director informs the fund’s strategy, which focuses on small-cap stocks, convertible securities, and preferred securities. The portfolio is concentrated in sectors such as aerospace and defense, homebuilding, casinos and gaming, regional banks, and mortgage REITs.
The fund’s approach combines internal price targets based on earnings growth and price-to-earnings ratios, selective option writing, and modest leverage to generate additional income. As of the end of June, the 30-day SEC yield was 4.08%, reflecting annualized net yield from dividends and interest. The expense ratio is 2.20%, reflecting the active management and specialized strategy.
Hatfield and his team maintain relationships with issuer management teams to gauge earnings estimates and forward-looking outlooks, aiming to identify companies with potential for upside relative to market expectations. Because small-cap stocks often receive less research coverage, the fund seeks to capitalize on inefficiencies and provide investors with exposure to earlier-stage growth opportunities.
This content was originally published on Benzinga. The featured image is from Shutterstock. For further disclosures, readers can visit the partner disclosure page 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.
