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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
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Making its debut on 04/03/2018, smart beta exchange traded fund iShares U.S. Infrastructure ETF (IFRA - Free Report) provides investors broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $881.36 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE FACTSET U.S. INFRASTRUCTURE INDEX .
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.30%.
The fund has a 12-month trailing dividend yield of 1.86%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 44.30% of the portfolio. Industrials and Materials round out the top three.
Taking into account individual holdings, Allegheny Technologies Inc (ATI - Free Report) accounts for about 1.01% of the fund's total assets, followed by Century Aluminum (CENX - Free Report) and Enlink Midstream Common Units (ENLC - Free Report) .
Its top 10 holdings account for approximately 9.02% of IFRA's total assets under management.
Performance and Risk
The ETF has lost about -2.35% so far this year and is up roughly 5.91% in the last one year (as of 04/28/2022). In the past 52-week period, it has traded between $33.99 and $39.92.
The fund has a beta of 1.04 and standard deviation of 26.90% for the trailing three-year period. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Infrastructure ETF is an excellent option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. There are other ETFs in the space which 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 $3.37 billion in assets, Global X U.S. Infrastructure Development ETF has $4.72 billion. IGF has an expense ratio of 0.43% and PAVE charges 0.47%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Utilities/Infrastructure ETFs.
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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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
Making its debut on 04/03/2018, smart beta exchange traded fund iShares U.S. Infrastructure ETF (IFRA - Free Report) provides investors broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $881.36 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE FACTSET U.S. INFRASTRUCTURE INDEX .
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.30%.
The fund has a 12-month trailing dividend yield of 1.86%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 44.30% of the portfolio. Industrials and Materials round out the top three.
Taking into account individual holdings, Allegheny Technologies Inc (ATI - Free Report) accounts for about 1.01% of the fund's total assets, followed by Century Aluminum (CENX - Free Report) and Enlink Midstream Common Units (ENLC - Free Report) .
Its top 10 holdings account for approximately 9.02% of IFRA's total assets under management.
Performance and Risk
The ETF has lost about -2.35% so far this year and is up roughly 5.91% in the last one year (as of 04/28/2022). In the past 52-week period, it has traded between $33.99 and $39.92.
The fund has a beta of 1.04 and standard deviation of 26.90% for the trailing three-year period. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Infrastructure ETF is an excellent option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. There are other ETFs in the space which 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 $3.37 billion in assets, Global X U.S. Infrastructure Development ETF has $4.72 billion. IGF has an expense ratio of 0.43% and PAVE charges 0.47%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Utilities/Infrastructure ETFs.
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.