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Should You Invest in the Global X U.S. Infrastructure Development ETF (PAVE)?

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If you're interested in broad exposure to the Utilities - Infrastructure segment of the equity market, look no further than the Global X U.S. Infrastructure Development ETF (PAVE - Free Report) , a passively managed exchange traded fund launched on 03/06/2017.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.

Index Details

The fund is sponsored by Global X Management. It has amassed assets over $5.46 billion, making it one of the largest ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. PAVE seeks to match the performance of the INDXX U.S. Infrastructure Development Index before fees and expenses.

The INDXX U.S. Infrastructure Development Index measure the performance of U.S. listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.47%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.33%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 71.50% of the portfolio. Materials and Information Technology round out the top three.

Looking at individual holdings, Nucor Corp (NUE - Free Report) accounts for about 3.43% of total assets, followed by Eaton Corp Plc (ETN - Free Report) and Rockwell Automation Inc (ROK - Free Report) .

The top 10 holdings account for about 30.16% of total assets under management.

Performance and Risk

The ETF has gained about 36.78% so far this year and is up roughly 37.04% in the last one year (as of 12/08/2021). In that past 52-week period, it has traded between $20.67 and $29.01.

The ETF has a beta of 1.31 and standard deviation of 30.95% for the trailing three-year period. With about 90 holdings, it effectively diversifies company-specific risk.

Alternatives

Global X U.S. Infrastructure Development ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PAVE is an excellent option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID - Free Report) tracks NASDAQ OMX Clean Edge Smart Grid Infrastructure Index and the iShares Global Infrastructure ETF (IGF - Free Report) tracks S&P Global Infrastructure Index. First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF has $796.49 million in assets, iShares Global Infrastructure ETF has $3.13 billion. GRID has an expense ratio of 0.70% and IGF charges 0.43%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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