QVOL: Infrastructure Capital Partners With Nasdaq To Offer Its First Nasdaq ETF

Advisors and investors are always looking for ways to enhance their income, however there is generally a tradeoff between yield and capital appreciation. QVOL seeks to actively capture income from the volatility-heavy technology sector, while positioning the equity portfolio for capital appreciation. Unlike competitor buy-write and option overlay strategies, ICA will actively manage the construction of QVOL’s equity portfolio and option activity, in tandem, in an effort to capture upside while generating premiums from option activity. QVOL can selectively write options on Nasdaq equities or indexes to achieve high income. While many competitor funds deploy systematic, long duration option writing strictly on an index, QVOL seeks to dynamically capture option premiums on companies that it believes are overvalued and can use short duration option activity to limit the potential upside cap from option writing.  This allows QVOL to participate in greater market upside than many of its competitors. QVOL’s option strategies are designed to generate high income by seeking annual premium from option writing.

QVOL aims to capture upside by actively selecting equity and option investments driven by quantitative and qualitative analysis, including relative value indicators. QVOL has the flexibility of selecting investments across the Nasdaq Composite Index. The Nasdaq Composite Index and the Nasdaq-100 Index are highly correlated and tend to move together because the 100 largest non-financial companies in the Nasdaq-100 generally make up about 80% to 90% of the total market capitalization of the much broader composite. In addition, due to the market cap weighting of the Nasdaq Composite Index, the top index holdings substantially overlap with the Nasdaq 100 Index. Accordingly, QVOL will provide investors exposure to big tech companies (e.g., the Magnificent 7) while offering QVOL more flexibility to seek to select valuable companies held in the Nasdaq Composite Index. The team at ICA believes this broader exposure to the Nasdaq Composite Index and flexibility to have more investment opportunities will support QVOL’s performance. 

QVOL deploys ICA’s active management approach.  The team at Infrastructure Capital selects investments for the portfolio pursuant to a variety of quantitative, qualitative, and relative valuation factors. When screening for equities and constructing the basket, ICA emphasizes selecting companies that screen well when considering a variety of relative valuation factors. As an example, QVOL may favor lower relative priced stock, or companies with higher profitability as compared to their representation in the Index (favorable relative value). If a company has a low price in relation to its book value or relative to the price of its peers, that would also be considered a positive factor. When evaluating the relative price of a security, ICA considers additional features such as enterprise values, capital ratios, operating metrics, and other key financial ratios that it believes are pertinent to valuing a sector or industry group of the company, such as price to cash flow or price to earnings ratios.

While QVOL’s equity and option investments are driven by quantitative, qualitative, and relative valuation factors, QVOL aims to achieve an investment philosophy that is: (1) driven by discipline, (2) applied consistently, and (3) centered around risk management. For example, a transaction will be executed for QVOL only after ICA has considered the time horizon for the investment and the portfolio’s positioning. Factors considered as part of the sell discipline include excessive valuation, opportunities to shift to more favorable investments, lack of confidence in the original thesis, changes in the company’s fundamental position, and whether a better opportunity exists to further QVOL’s strategy. 

QVOL ETF is listed on the Nasdaq and joins an Infrastructure Capital ETF lineup which also includes the Infrastructure Capital Bond Income ETF (NYSE:BNDS), Infrastructure Capital Small Cap Income ETF (NYSE:SCAP), Virtus U.S. Preferred Stock ETF (NYSE:PFFA), REIT Preferred ETF (NYSE:PFFR), InfraCap MLP ETF (NYSE:AMZA), and the Infrastructure Capital Equity Income ETF (NYSE:ICAP).

Infrastructure Capital Advisors, LLC (ICA) is an SEC-registered investment advisor that manages exchange traded funds (ETFs) and a series of hedge funds. The firm was formed in 2012 and is based in New York City. ICA seeks total-return opportunities driven by catalysts, largely in key infrastructure sectors. These sectors include energy, real estate, transportation, industrials and utilities. It often identifies opportunities in entities that are not taxed at the entity level, such as master limited partnerships (“MLPs”) and real estate investment trusts (“REITs”). It also looks for opportunities in credit and related securities, such as preferred stocks.

Current income is a primary objective in most, but not all, of ICA’s investing activities. Consequently, the focus is generally on companies that generate and distribute substantial streams of free cash flow. This approach is based on the belief that tangible assets that produce free cash flow have intrinsic values that are unlikely to deteriorate over time. For more information, please visit https://www.infracapfunds.com. *Alpha is a common investing term used to describe a strategy’s investment ability to beat the market. Opinions represented are subject to change and should not be considered investment advice. Past performance is not indicative of future results. This data was prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed.

Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus with this and other information about the Fund, please click here or call 800-617-0004.  Please read the prospectus carefully before investing. For more information about the Fund, Fund strategies or InfraCap, please reach out to Craig Starr at 212-763-8336 ([email protected]).

The Nasdaq Composite is a stock market index composed of thousands of stocks listed on the Nasdaq Stock Market®, with a particular emphasis on technology-related companies. Established in 1971, it is known for featuring a wide range of companies—from established giants like Apple and Microsoft to smaller, fast-growing firms—reflecting a broad cross-section of the U.S. technology sector. The index is market capitalization-weighted, meaning that larger companies have a greater influence on its overall performance, and it is commonly used as a benchmark to gauge the health and trends of the technology-driven segments of the American economy.

A company’s Earnings Growth is not a measure of future performance. Growth Potential, Income Potential, Historical Valuations, Stock Discounts, Value Investing factors and approaches to not guarantee future results. The information contained herein represents our subjective belief and opinions and should not be construed as investment, tax, legal, or financial advice.  Infrastructure Capital Advisors, LLC nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss however arising, directly or indirectly, from any use of the information contained herein. This data includes information based on data and calculations sourced from Bloomberg and third-party sources. We believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information in this article. 

A word about risk: Investing involves risk. Principal loss is possible. The Fund is a recently organized investment company with no operating history prior to the date of this Prospectus. As a result, prospective investors have no track record or history on which to base their investment decision. Derivatives may pose risks in addition to and greater than those associated with investing directly in securities, currencies or other investments, including risks relating to leverage, imperfect correlations with underlying investments or the Fund’s other portfolio holdings, high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. Options transactions involve special risks that may make it difficult or impossible to close a position when the Fund desires. The prices of securities the Adviser believes are undervalued may not appreciate as anticipated or may go down, the valuations may never improve or returns on value equity securities may be less than returns on other styles of investing or the overall stock market. Leverage is investment exposure which exceeds the initial amount invested. When the Fund borrows money for investment purposes, or when the Fund engages in certain derivative transactions, such as options, the Fund may become leveraged. A high portfolio turnover rate (portfolio turnover in excess of 100% of the average value of the Fund’s portfolio) has the potential to result in the realization and distribution to shareholders of higher capital gains, which may subject you to a higher tax liability. QVOL is distributed by Quasar Distributors, LLC.