Launched on 03/06/2017, the Global X U.S. Infrastructure Development ETF (
PAVE Quick Quote PAVE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Infrastructure segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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%.
The fund is sponsored by Global X Management. It has amassed assets over $3.58 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.
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 0.47%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 71.10% of the portfolio. Materials and Utilities round out the top three.
Looking at individual holdings, Deere & Co (
DE Quick Quote DE - Free Report) accounts for about 3.24% of total assets, followed by Eaton Corp Plc ( ETN Quick Quote ETN - Free Report) and Parker Hannifin Corp ( PH Quick Quote PH - Free Report) .
The top 10 holdings account for about 29.38% of total assets under management.
Performance and Risk
So far this year, PAVE has added about 24.20%, and is up about 88.32% in the last one year (as of 05/26/2021). During this past 52-week period, the fund has traded between $14.51 and $27.18.
The ETF has a beta of 1.32 and standard deviation of 30.88% for the trailing three-year period. With about 102 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 reasonable 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.
IShares U.S. Infrastructure ETF (
IFRA Quick Quote IFRA - Free Report) tracks NYSE FACTSET U.S. INFRASTRUCTURE INDEX and the iShares Global Infrastructure ETF ( IGF Quick Quote IGF - Free Report) tracks S&P Global Infrastructure Index. IShares U.S. Infrastructure ETF has $552.42 million in assets, iShares Global Infrastructure ETF has $3.17 billion. IFRA has an expense ratio of 0.40% and IGF charges 0.46%. Bottom Line
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