Fed’s Steady Rate Policy Creates Opportunities for Active Bond ETFs Like BNDS

Amid global turmoil, including war in Iran and soaring oil prices, the Federal Reserve has signaled it will keep interest rates steady in the near term, with Chairman Jerome Powell stating the committee is ‘well-positioned’ to assess incoming data before committing to further reductions. Wall Street expects rates to remain in the 3.5% to 3.75% range through at least April, with potential cuts pushed to July or later if inflation persists and geopolitical disruptions continue.

For income-seeking investors, this prolonged holding pattern presents challenges for bond price appreciation, but it also creates opportunities through actively managed bond ETFs. Unlike passive funds, active managers can continually reinvest proceeds from maturing bonds into higher-yielding securities, potentially boosting monthly dividend payments. The Infrastructure Capital Bond Income ETF (NYSE: BNDS) is designed to maximize current income with a secondary focus on capital appreciation.

BNDS invests at least 80% of its assets in a diversified range of fixed-income securities, primarily corporate bonds, along with municipal and government debt. The fund’s actively managed structure allows it to employ an option-writing strategy to enhance income and adjust portfolio duration, credit quality, and sector exposure in response to economic changes or Fed policy shifts. Portfolio managers Jay D. Hatfield and Andrew Meleney, who bring over thirty years of combined experience, select bonds based on quantitative and qualitative factors, targeting securities trading at a discount or offering total return opportunities.

Current holdings include bonds from companies such as Genesis Energy LP (3.43%), The Chemours Company (3.93%), Plains All American Pipeline LP (3.61%), and Sunoco LP (3.44%). *Portfolio holdings will change due to ongoing management of the funds. References to specific securities or sectors should not be misconstrued as recommendation to buy or sell any security. Please visit https://www.infracapfund.com/BNDS for the fund’s top ten holdings.

In the current environment of heightened geopolitical uncertainty and a Fed on hold, the active management of BNDS is a key advantage. The fund managers can proactively rotate into higher-yielding bonds and hedge against volatility, using dividend payments as a cushion against short-term market swings. This approach aims to capture the benefits of the current rate environment while providing monthly income distributions.

Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus with this and other information about the ETF, please click here https://www.infracapfund.com/BNDS. Please read the prospectus carefully before investing. Investing involves risk including the risk of principal loss. The fund’s principal investment risks include Debt Securities Risk, Credit Risk, Interest Rate Risk, and New Fund Risk. ETFs are subject to additional risks, including that shares may trade at a premium or discount to net asset value, and brokerage commissions will reduce returns. BNDS is distributed by Quasar Distributors, LLC.

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