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Should You Invest in the iShares U.S. Infrastructure ETF (IFRA)?

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Designed to provide broad exposure to the Utilities - Infrastructure segment of the equity market, the iShares U.S. Infrastructure ETF (IFRA - Free Report) is a passively managed exchange traded fund launched on 04/03/2018.

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.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $809.52 million, making it one of the average sized ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. IFRA seeks to match the performance of the NYSE FACTSET U.S. INFRASTRUCTURE INDEX before fees and expenses.

The NYSE FactSet U.S. Infrastructure Index comprises of equities of U.S. companies that have infrastructure exposure and that could benefit from a potential increase in domestic infrastructure activities.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.30%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.69%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector--about 42.30% of the portfolio. Industrials and Materials round out the top three.

Looking at individual holdings, Enlink Midstream Common Units (ENLC - Free Report) accounts for about 1.02% of total assets, followed by Sunnova Energy International Inc (NOVA - Free Report) and Pg&e Corp (PCG - Free Report) .

The top 10 holdings account for about 6.29% of total assets under management.

Performance and Risk

Year-to-date, the iShares U.S. Infrastructure ETF has lost about -3.40% so far, and it's up approximately 17.20% over the last 12 months (as of 02/17/2022). IFRA has traded between $31.53 and $38.56 in this past 52-week period.

The ETF has a beta of 1.07 and standard deviation of 26.68% for the trailing three-year period. With about 156 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares U.S. Infrastructure 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, IFRA 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.

IShares Global Infrastructure ETF (IGF - Free Report) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF (PAVE - Free Report) tracks INDXX U.S. Infrastructure Development Index. IShares Global Infrastructure ETF has $3.31 billion in assets, Global X U.S. Infrastructure Development ETF has $5.10 billion. IGF has an expense ratio of 0.43% and PAVE charges 0.47%.

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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