The Global X U.S. Infrastructure Development ETF (
PAVE Quick Quote PAVE - Free Report) was launched on 03/06/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Infrastructure segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways 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 11, placing it in bottom 31%.
The fund is sponsored by Global X Management. It has amassed assets over $1.11 billion, making it one of the larger 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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.42%.
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 Industrials sector--about 70.10% of the portfolio. Materials and Information Technology round out the top three.
Looking at individual holdings, Fastenal Co (
FAST Quick Quote FAST - Free Report) accounts for about 4.23% of total assets, followed by Rockwell Automation Inc ( ROK Quick Quote ROK - Free Report) and United Rentals Inc ( URI Quick Quote URI - Free Report) .
The top 10 holdings account for about 34.16% of total assets under management.
Performance and Risk
The ETF has added roughly 5.98% and was up about 26.66% so far this year and in the past one year (as of 01/26/2021), respectively. PAVE has traded between $10.02 and $23.14 during this last 52-week period.
The ETF has a beta of 1.31 and standard deviation of 30.78% for the trailing three-year period. With about 94 holdings, it effectively diversifies company-specific risk.
Global X U.S. Infrastructure Development ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PAVE is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Global Infrastructure ETF (
GII Quick Quote GII - Free Report) tracks S&P Global Infrastructure Index and the iShares Global Infrastructure ETF ( IGF Quick Quote IGF - Free Report) tracks S&P Global Infrastructure Index. SPDR S&P Global Infrastructure ETF has $361.22 million in assets, iShares Global Infrastructure ETF has $3.02 billion. GII has an expense ratio of 0.40% and IGF charges 0.46%. Bottom Line
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