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Publicly Traded Investment Vehicles: Refresher comparing ETFs, Mutual Funds, and CEFs

New York, NY ~ July 6, 2023 ~ An InfraCap ETF Liquidity Dynamics Primer

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​ETFs vs. Mutual Funds vs CEFs

Exchange-Traded Funds (‘ETFs’)

  • Intra-day liquidity

  • Share count is flexible and determined by Authorized Participants / market makers.

  • Creates (buys) increase the fund share count

  • Redeems (sells) decrease the fund share count


Open-End Funds (‘Mutual Funds’)

  • Trades once per day, at the market close

  • Share count is flexible

  • Subscriptions (buys) increase the fund share count

  • Redemptions (sells) decrease the fund share count


Closed-End Funds (‘CEFs’)

  • Intra-day liquidity

  • Share count is fixed

  • Fund price can vary from actual NAV

ETF

​Mutual Fund

CEF

Exchange Traded

Yes

No

Yes

Visibility into Holdings

Daily

​Monthly or Quarterly

Monthly or Quarterly

Shares Outstanding

Based on market dynamics

Based on market dynamics

Fixed

Pricing

Primary Market: NAV Secondary Market: Market Determined

NAV

Market Determined

Liquidity

Secondary Market. Intraday

End of day only

Secondary Market, Intraday


ETF Creation Process - InfraCap ETF Primer

ETF Redemption Process - InfraCap ETF Primer

Authorized Participants ('APs')

  • Create and redeem ETF shares in exchange for the underlying basket of ETF securities

  • Provide liquidity of the underlying ETF

  • The creation/redemption process leads to ETFs trading close to NAV

  • APs receive a fee and the arbitrage profits between the ETF price and the price of the underlying basket of securities

  • Each ETF has numerous APs

Authorized Participants compete to capture arbitrage profits in the creation/redemption process which provides liquidity and a price near NAV for ETFs


 
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About Us:

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 current income opportunities as a primary objective in most, but not all, of ICA's investing activities.


DISCLOSURE:

The information contained herein represents our subjective belief and opinions and should not be construed as investment advice. The information and opinions provided should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions regarding any investments mentioned, and their prospects based on such investors’ own review of publicly available information and should not rely on the information contained herein. Infrastructure Capital Advisors, LLC nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever 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. Comparative fund information (CEF and open-end funds) is provided for informational purposes only, funds may have different characteristics and risks which are not presented. Infrastructure Capital Advisors and Jay Hatfield does not manage mutual funds or CEFs. Many of the statements in this file reflect our subjective belief. If you have any questions, please reach out to Craig Starr at Craig.Starr@icmllc.com or 212-763-8336.


Fund Risks:

Please consider each Fund’s investment objectives, risks, and charges and expenses carefully before investing. For PFFA, PFFR, and AMZA, Contact VP Distributors LLC at 1-888-383-4184 or visit https://www.virtus.com. to obtain a prospectus which contains this and other information about the Fund. The prospectus should be read carefully before investing. For ICAP ETF, please visit https://www.infracapequityincomefundetf.com/ or contact 800-617-0004. ICAP is distributed by Quasar Distributors, LLC.


Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Preferred Stock: Preferred stocks may decline in price, fail to pay dividends, or be illiquid.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Market Volatility: Securities in the Fund may go up or down in response to the prospects of individual companies and general economic conditions. Price changes may be short or long term.

Non-Diversified: The Fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the fund’s assets.

Short Sales: The Fund may engage in short sales, and may experience a loss if the price of a borrowed security increases before the date on which the fund replaces the security.

Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.

Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.

No Guarantee: There is no guarantee that the portfolio will meet its objective.

Prospectus: For additional information on risks, please see the Fund's prospectus.


Performance Data: Performance data quoted backtested results. Backtested Performance was derived from the retroactive application of a model developed with the benefit of hindsight. Backtested performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost.

NAV Returns: NAV returns are calculated using the Fund’s daily 4:00 p.m. NAV, and include the reinvestment of all dividends and other distributions (reinvested at the Fund's NAV on distribution ex-date). Market price returns are calculated using the 4:00 pm midpoint between the bid and offer, and include the reinvestment of all dividends and other distributions (reinvested at the 4:00pm bid/offer midpoint on distribution ex-date). Market price returns do not represent the return you would receive if you traded at other times.

Virtus ETF Advisers, LLC serves as the investment advisor and Infrastructure Capital Advisors, LLC serves as the sub-advisor to PFFA, PFFR, and AMZA. Infrastructure Capital Advisors, LLC serves as the investment advisor to ICAP.

Publicly Traded Investment Vehicles:

The information discussed represents a subset of the universe investment vehicles that are offered to the public, usually under the rules set for under the Investment Company Act of 1940. The creation and redemption features may differ by fund, strategy, or investment vehicle. Please consult your financial advisor before making an investment decision.

Data and Opinions: This data was prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice.


© 2023 Infrastructure Capital Advisors, LLC




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