EQS-News: Generating Income Opportunities In A High-Volatility, High-Interest Rate World: Why The BNDS Bond Income ETF May Deserve A Closer Look

By Meg Flippin, Benzinga

DETROIT, MICHIGAN - May 28, 2026 (NEWMEDIAWIRE) - The world may seem like it's in chaos with war in Iran, volatility at fever pitch and oil prices soaring, but when it comes to the Federal Reserve’s view of its interest rate policy, it appears to be steady as she goes, at least in the near term. 

The steady as she goes mindset was the signal Fed Chairman Jerome Powell sent at the central bank’s last meeting in January, even as the Fed stood divided. In prepared remarks, Powell said the committee is “well-positioned” to assess incoming data, noting they need to see more consistent evidence that inflation is moving sustainably toward their 2% goal before committing to further reductions. 

Expectations on Wall Street were for the Fed to keep rates steady in the 3.5% to 3.75% range through April, with any cuts coming during the July meeting at the earliest. It could be pushed back to September or even further if inflation keeps rising, the war in Iran continues and disruptions in the Strait of Hormuz don’t end. 

On the other hand, while stock market volatility tends to drive many investors to seek out the relative stability of bonds, finding the right investment vehicle in the current interest rate environment can be a challenge – but there are options that may hold advantages.

Actively Managing The Wait With The Infrastructure Capital Bond Income ETF

The Fed’s policy shouldn’t be too much of a shock to the bond market, even though it complicates the path for bond price appreciation; however, for income-seeking investors, there are opportunities to be found through actively managed bond ETFs. That’s because they can continually reinvest the proceeds from maturing bonds with lower interest into securities that pay higher rates. As a result, investors could potentially get higher monthly dividend payments, which is what income-seeking investors are after.

It's the philosophy behind the Infrastructure Capital Bond Income ETF (NYSE: BNDS), which seeks to maximize current income, with a secondary objective to pursue strategic opportunities for capital appreciation. BNDS ETF aims to achieve that by investing at least 80% of its total assets in a diverse range of fixed-income securities, largely corporate bonds, although it also includes some municipal bonds and government debt. The bonds have varying maturities, so the ETF can reinvest proceeds and generate income for its investors that is distributed monthly – a key attraction for income-seeking investors. Plus, the structure of BNDS allows the management team to opportunistically employ an option-writing strategy to enhance income.

Since BNDS ETF is actively managed, it is not stuck tracking specific benchmarks; instead, it uses its combination of quantitative and qualitative factors when selecting investments for the ETF, emphasizing those fixed income securities that are trading at a discount and/or offer a total return opportunity. The enterprise value, capital ratio, operating metrics and other key financial data is also built into the selection process, with the aim to purchase bonds at a fire sale that have a big potential to increase.  

Getting Picky To Win 

When selecting bonds, the fund managers – Infrastructure Capital Founder, CEO and Portfolio Manager Jay D. Hatfield and Portfolio Manager Andrew Meleney, who combined have over thirty years of experience in the securities and investment markets – look for companies that have a strong competitive position, earn a high return on capital, have stable and reliable profits and are exhibiting the ability to generate cash in excess of growth needs. Some of the bond holdings in the ETF that Infrastructure Capital says check off those boxes are issued by 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 fund’s top ten holdings. 

In the current climate, in which the Fed may not cut interest rates for a while and when there is heightened geopolitical uncertainty, the fact that the BNDS ETF is actively managed can be an extremely attractive feature. That’s because the fund managers can be proactive and adjust the portfolio bond durations, credit quality and sector exposure to navigate any changes in the economy or Federal Reserve policy. If the Fed surprised the markets and cut rates at an upcoming meeting, the fund managers could react. If inflation suddenly comes back down, that won’t be lost on Hatfield or Meleney. Because they are constantly watching and evaluating the markets, they can rotate into higher-yielding bonds when they present themselves and hedge against volatility. This means the fund is continually reinvesting proceeds from maturing bonds into new securities that pay higher market rates, in essence positioning to capture the benefits of the current rate environment and using the dividend payments as a cushion against short-term volatility. How is that for steady as she goes? 

To learn more about how to generate income from bonds when the Fed is in a holding pattern, visit Infrastructure Capital's BNDS fund page.

Featured image from Shutterstock.

This content was originally published on Benzinga. Read further disclosures 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.

Important Information

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. For additional information about these and other fund risks, please refer to the "Principal Investment Risks" section of the prospectus.

ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF's shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact an ETF's ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns

BNDS is distributed by Quasar Distributors, LLC.