Infrastructure Capital Advisors Launches New Corporate Bond ETF Amid Promising Market Conditions

Infrastructure Capital Advisors has unveiled a new exchange-traded fund designed to provide investors strategic access to the corporate bond market. The Infrastructure Capital Bond Income ETF (ARCA: BNDS) seeks to maximize current income and pursue capital appreciation through an actively managed portfolio of fixed-income securities.

The new ETF arrives at a time when corporate bond markets demonstrate significant potential. With investment-grade corporate bonds currently offering average yields of 5.6% and corporations maintaining strong financial positions, the timing appears opportune for income-focused investors. The fund will primarily invest in corporate bonds, with potential allocations to municipal and government bonds, and up to 20% in equities.

Led by Infrastructure Capital Founder Jay D. Hatfield and Portfolio Manager Andrew Meleney, the ETF employs a sophisticated investment approach combining quantitative and qualitative analysis. The managers will focus on identifying undervalued fixed-income securities by examining factors such as term premium, credit premium, liquidity premium, industry dynamics, and market capitalization.

The launch comes amid a favorable economic backdrop characterized by resilient corporate profits, increasing corporate cash balances, and relatively tight corporate bond spreads. Economic projections suggest continued strength, with potential deregulation, anticipated Federal Reserve interest rate adjustments, and low unemployment contributing to a positive market environment.

Hatfield emphasized the importance of active management in navigating the current fixed-income landscape, stating that their approach focuses on mitigating interest rate, credit, and call risks. The ETF represents a strategic response to challenges facing income investors, including high inflation and historically low yields in traditional investment vehicles.

With Infrastructure Capital Advisors managing over $2 billion in total assets, the new ETF adds to the firm's existing lineup of income-generating investment solutions. The BNDS ETF offers investors a potentially attractive option for diversifying their portfolios and accessing corporate bond markets through professional, active management.