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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
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The iShares U.S. Infrastructure ETF (IFRA - Free Report) was launched on 04/03/2018, and is a smart beta exchange traded fund designed to offer 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
IFRA is managed by Blackrock, and this fund has amassed over $2.32 billion, which makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. This particular fund 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.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.30%, making it one of the least expensive products in the space.
IFRA's 12-month trailing dividend yield is 2.25%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 37.10% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Vistra Corp (VST - Free Report) accounts for about 0.85% of the fund's total assets, followed by Worthington Enterprises Inc (WOR - Free Report) and Great Lakes Dredge And Dock Corp (GLDD - Free Report) .
Its top 10 holdings account for approximately 7.7% of IFRA's total assets under management.
Performance and Risk
The ETF has gained about 6.06% and is up about 19.03% so far this year and in the past one year (as of 03/22/2024), respectively. IFRA has traded between $34.58 and $42.55 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 18.58% for the trailing three-year period. With about 160 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Infrastructure ETF is a reasonable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $3.51 billion in assets, Global X U.S. Infrastructure Development ETF has $7.08 billion. IGF has an expense ratio of 0.41% 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?
The iShares U.S. Infrastructure ETF (IFRA - Free Report) was launched on 04/03/2018, and is a smart beta exchange traded fund designed to offer 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
IFRA is managed by Blackrock, and this fund has amassed over $2.32 billion, which makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. This particular fund 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.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.30%, making it one of the least expensive products in the space.
IFRA's 12-month trailing dividend yield is 2.25%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 37.10% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Vistra Corp (VST - Free Report) accounts for about 0.85% of the fund's total assets, followed by Worthington Enterprises Inc (WOR - Free Report) and Great Lakes Dredge And Dock Corp (GLDD - Free Report) .
Its top 10 holdings account for approximately 7.7% of IFRA's total assets under management.
Performance and Risk
The ETF has gained about 6.06% and is up about 19.03% so far this year and in the past one year (as of 03/22/2024), respectively. IFRA has traded between $34.58 and $42.55 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 18.58% for the trailing three-year period. With about 160 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Infrastructure ETF is a reasonable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $3.51 billion in assets, Global X U.S. Infrastructure Development ETF has $7.08 billion. IGF has an expense ratio of 0.41% 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.