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Globe and Mail
10 hours ago
- Business
- Globe and Mail
Fixed Rates, Flexible Strategy: How The Infrastructure Capital Bond Income ETF (BNDS) Navigates Today's Complex Waters
DETROIT, MICHIGAN - June 18, 2025 (NEWMEDIAWIRE) - Last year, investor sentiment for benchmark interest rate cuts rose, thanks in large part to actions taken by the Federal Reserve. In September, the central bank cut borrowing costs for the first time in more than four years, opting to lower the rates by 50 basis points to a range of 4.75% to 5%. Naturally, the Fed's decision carried an implied trickle-down effect on matters that are critical to consumers, such as mortgages and auto loans. At the same time, a lower rate environment generally spells positive tidings for income-generating funds like the Infrastructure Capital Bond Income ETF (ARCA: BNDS). An exchange-traded fund managed by Infrastructure Capital Advisors – commonly known as InfraCap – the main priority of BNDS is to maximize current income for its stakeholders. Secondarily, the fund seeks to pursue capital appreciation. However, with the trade policies of President Donald Trump and the residual impact of the COVID-19 crisis – most notably the sharply elevated costs of living – the Fed does not appear to be in the mood to reduce the benchmark interest rate. Indeed, the president has vocally expressed frustration with Fed Chair Jerome Powell's wait-and-see approach amid unresolved trade and budget issues. If that wasn't enough, Goldman Sachs analysts warned that higher inflation numbers could sideline the prospect of dovish monetary policy until December. If so, government bonds would theoretically compete with investment vehicles like the BNDS ETF. After all, U.S. Treasuries are backed by the full faith and credit of the U.S. government. That's a fancy way of saying risk-free yield. In that case, is there any reason to consider BNDS? A closer look at the underlying architecture reveals an intriguingly relevant picture. Practical Leadership: A Core Attribute Undergirding The BNDS ETF While the BNDS ETF and other income-oriented funds face challenges in the current economic and political environment, it's also worth noting that the Infrastructure Capital fund distinguishes itself from many other competitors with its active management. Unlike passive funds, which merely attempt to replicate the performance of benchmark indices, actively managed vehicles directly navigate the pitfalls that may arise in the market. Some of the potential advantages include the following as part of the strategy sought by the fund: Avoidance of weak credits or downgrade risks. Rotation into undervalued, higher-yielding bonds when conditions shift. Dynamic adjustment of sector and duration exposure. Deployment of options-based overlays to enhance income potential. More importantly, the BNDS ETF is overseen by Infrastructure Capital Founder, CEO and Portfolio Manager Jay D. Hatfield. Leveraging almost three decades of experience in the securities and investment industries, Hatfield commands broad expertise across a range of disciplines. By having intricate knowledge of the ebb and flow of the capital markets, Hatfield helps navigate the BNDS around pitfalls and toward probabilistically viable pathways. It's not just a marketing slogan or pitch. Rather, Hatfield's extensive body of work speaks for itself. In addition to the BNDS ETF, he also manages the Virtus InfraCap US Preferred Stock ETF (ARCA: PFFA), which seeks income, primarily through U.S. preferred securities. But arguably the biggest advantage that Hatfield offers is his acumen as it relates to writing options. Also known as selling options, this process is known as 'writing' because the trader is underwriting the risk that the underlying security will not move in accordance with the debit buyer's wish. By logical deduction, all written options are credit-based strategies because the seller of the options contract receives a premium for the risk acceptance. Subsequently, this premium is known as income, which is expressed in the form of the option's yield. Mathematically, the yield is the premium received divided by the capital at risk or capital required, usually expressed as a percentage over the contract's lifespan. Using options-writing strategies, traders can dramatically boost their income-generating portfolio. So, why don't more traders consider selling options? Primarily, it's because credit-based options suffer from the ever-present threat of tail risk. Initially, credit-based options are enticing because they start from a cash influx position. However, if the trade moves against the credit seller, the underlying yield imposes negative convexity. In simple terms, the credit seller ends up owing money at a non-linear rate the more the trade moves against the credit position. The maximum that can be lost is essentially the inverse of the yield, which can be severe depending on the yield size. Oftentimes, one fully toxic credit spread is enough to derail profits in other transactions. This is why the leadership and exercise of Jay Hatfield is critical to the integrity of the BNDS ETF. Narrowing Credit Spreads: An Underappreciated Market Dynamic Another reason to consider the BNDS ETF despite the high interest rate environment is the potential for the credit spread to narrow. A credit spread is the difference between Treasury yields and corporate bond yields. At the moment, spreads have been widening due to investors pricing in default risk (of corporations) and lingering economic uncertainty. However, the Fed has indicated that it would hold interest rates steady, which subtly indicates confidence in the economy; otherwise, the central bank would be tempted to consider interventionary policies. Moreover, Goldman Sachs analysts – while acknowledging the threat posed by persistent inflation – recently lowered recession odds to around 30%. In response to improving conditions, corporate bond yields may come down due to the reduced risk profile, a circumstance called spread compression. Simultaneously, corporate bond prices may rise due to yields and prices moving inversely. Down the line, the BNDS ETF – which holds a portfolio of corporate bonds – may see capital appreciation, a dynamic which would not impact Treasuries (since there are no spreads in that case to compress). In other words, investors who choose to put their money into Treasuries are dependent on Fed policy. On the flipside, the actively managed BNDS could rise based on a variety of well-researched strategies and methodologies, including spread compression and options writing. A Dynamic Fund For A Constantly Shifting Market With the introduction of new economic policies clashing with lingering challenges, the market environment of 2025 has caught many investors by surprise. Due to the broad uncertainties, a temptation exists to park funds in U.S. Treasuries. However, Infrastructure Capital's income-focused BNDS ETF may offer an intriguing alternative. As an actively managed fund, the BNDS seeks out undervalued and underappreciated opportunities to help stakeholders generate income. As well, through the expertise of Portfolio Manager Jay Hatfield, the ETF aims to deliver enhanced yield through options-writing strategies. Finally, BNDS could potentially see capital appreciation due to the credit-spread narrowing if economic conditions improve. Click here to learn more about the fund. Featured image from Shutterstock. This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.
Yahoo
11-05-2025
- Business
- Yahoo
Teekay Tankers Ltd. (TNK): Among Cheap Rising Stocks to Buy Right Now
We recently published a list of the 10 Cheap Rising Stocks to Buy Right Now. In this article, we will look at where Teekay Tankers Ltd. (NYSE:TNK) stands against other cheap rising stocks in which to invest. On May 2, US stocks notched their longest winning streak since 2004 as the United States and China signaled a willingness to have trade talks. The broad market index rose 1.47%, which helped it erase the losses since the Trump administration announced reciprocal tariffs on April 2. READ ALSO: ChatGPT Stock Advice: Top 12 Stock Recommendations and 11 Worst Performing Stocks in S&P 500 So Far in 2025. Trump told Time magazine on April 22 that his administration was engaged with China on striking a tariff deal. The US president also said he expects announcements on many other trade deals to be made over the next three to four weeks. During an interview with NBC on May 2, the US President stated that tariffs on Chinese imports will eventually be lowered: At some point, I'm going to lower them because otherwise, you could never do business with them. They want to do business very much … their economy is collapsing.' Jay Hatfield, founder and chief investment officer of InfraCap, believes the worst of the uncertainty around tariffs is over. He shared the following remarks while talking to CNBC: 'The confusion about whether there's really talks going on with China or not took some steam out of the market. Our view is that we've reached peak tariff tantrum and so it's likely to be more positive than negative.' A spokesperson for China's Commerce Ministry has said the country is currently assessing proposals shared by Washington to begin trade negotiations. Analysts view the statement as a subtle shift in tone from Beijing that could potentially open the door for talks on tariffs. The stock market has also received a boost from the latest jobs data shared by the Bureau of Labor Statistics. The American economy added 177,000 new jobs in April. While this was slightly down from 185,000 jobs in March, the gain was still stronger than the average pace of monthly job growth in the last three months, which reflected the resilience of the US job market. A large oil refinery against a backdrop of ocean containers and industrial cranes. For this article, we sifted through screeners to identify stocks with returns of 10% or more over the past 30 days, a forward P/E ratio of less than 15, a trailing P/E ratio of less than 15, and a P/B ratio of under 1. From there, we picked the 10 stocks with the lowest forward P/E ratio and ranked them in descending order. All data is as of the close of business on May 5, 2025. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). 30-day returns: 33.94% Forward P/E ratio: 7.13 Teekay Tankers Ltd. (NYSE:TNK) is a Bermuda-based company that provides marine transportation services to the oil industry. Its fleet includes 36 double-hull tankers and four chartered-in oil tankers. Analysts believe the current trade disruptions and geopolitical shifts present a compelling investment opportunity, with Teekay Tankers Ltd. (NYSE:TNK) set to gain as Canadian producers explore alternative markets amid the imposition of recent tariffs by the US. The shift in trade partners also translates into increased demand for tankers, higher daily charter rates, and longer shipping distances, which is a direct tailwind for the company. Teekay Tankers Ltd. (NYSE:TNK) reported a GAAP net income of $76.0 million, or $2.20 per share, for the first quarter of fiscal 2025, while adjusted net income was $41.8 million, or $1.21 per share. Total revenue stood at $231.6 million. During the earnings call, the company also declared a fixed cash dividend of 25 cents per share and a special cash dividend of $1 per share, payable on May 30. Wall Street analysts have a consensus Buy rating for Teekay Tankers Ltd. (NYSE:TNK), with an average share price upside potential of nearly 16%. On May 8, Jefferies maintained its price target of $55 for the stock. Given the impressive returns over the past month and a low forward P/E ratio, TNK is one of the cheap rising stocks to invest in right now. According to Insider Monkey's database for Q4 2024, 21 hedge funds held a stake in Teekay Tankers Ltd. (NYSE:TNK). Overall, TNK ranks 6th among the 10 Cheap Rising Stocks to Buy Right Now. While we acknowledge the potential of TNK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TNK but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
10-05-2025
- Business
- Yahoo
Webster Financial Corporation (WBS): Among Cheap Rising Stocks to Buy Right Now
We recently published a list of the 10 Cheap Rising Stocks to Buy Right Now. In this article, we will look at where Webster Financial Corporation (NYSE:WBS) stands against other cheap rising stocks in which to invest. On May 2, US stocks notched their longest winning streak since 2004 as the United States and China signaled a willingness to have trade talks. The broad market index rose 1.47%, which helped it erase the losses since the Trump administration announced reciprocal tariffs on April 2. READ ALSO: ChatGPT Stock Advice: Top 12 Stock Recommendations and 11 Worst Performing Stocks in S&P 500 So Far in 2025. Trump told Time magazine on April 22 that his administration was engaged with China on striking a tariff deal. The US president also said he expects announcements on many other trade deals to be made over the next three to four weeks. During an interview with NBC on May 2, the US President stated that tariffs on Chinese imports will eventually be lowered: At some point, I'm going to lower them because otherwise, you could never do business with them. They want to do business very much … their economy is collapsing.' Jay Hatfield, founder and chief investment officer of InfraCap, believes the worst of the uncertainty around tariffs is over. He shared the following remarks while talking to CNBC: 'The confusion about whether there's really talks going on with China or not took some steam out of the market. Our view is that we've reached peak tariff tantrum and so it's likely to be more positive than negative.' A spokesperson for China's Commerce Ministry has said the country is currently assessing proposals shared by Washington to begin trade negotiations. Analysts view the statement as a subtle shift in tone from Beijing that could potentially open the door for talks on tariffs. The stock market has also received a boost from the latest jobs data shared by the Bureau of Labor Statistics. The American economy added 177,000 new jobs in April. While this was slightly down from 185,000 jobs in March, the gain was still stronger than the average pace of monthly job growth in the last three months, which reflected the resilience of the US job market. An executive in a suit walking across the lobby of a modern commercial bank. For this article, we sifted through screeners to identify stocks with returns of 10% or more over the past 30 days, a forward P/E ratio of less than 15, a trailing P/E ratio of less than 15, and a P/B ratio of under 1. From there, we picked the 10 stocks with the lowest forward P/E ratio and ranked them in descending order. All data is as of the close of business on May 5, 2025. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). 30-day returns: 18.51% Forward P/E ratio: 8.65 Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank. It provides financial products and services to individuals, families, and businesses in the United States. On April 24, the company reported financial results for the first quarter of fiscal 2025, with net income applicable to common stockholders of $220.4 million, translating to diluted earnings per share of $1.30. While this was an improvement from a net income of $210.1 million, or $1.23 per diluted share in Q1 2024, earnings fell short of expectations by 8 cents. Webster Financial Corporation (NYSE:WBS)'s revenue was posted at $704.8 million, which also fell shy of forecasts. However, the company demonstrated solid asset growth, with total assets increasing by $1 billion from the last quarter to $80 billion. Deposits also grew by $800 million. Return on average assets stood at 1.15%, while return on average tangible common equity was just below 16%. On April 30, Webster Financial Corporation (NYSE:WBS) declared a quarterly cash dividend of 40 cents per share on its common stock, payable on May 22, to all shareholders on record as of May 12. The company has also recently announced plans to expand its stock repurchase program by an additional $700 million. Webster Financial Corporation (NYSE:WBS) is among the cheap rising stocks to buy right now. Wall Street analysts have a consensus Buy rating for WBS with an average share price upside potential of 29%. Overall, WBS ranks 10th among the 10 Cheap Rising Stocks to Buy Right Now. While we acknowledge the potential of WBS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WBS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
