We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
Read MoreHide Full Article
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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $788.88 million, this makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. IFRA is managed by Blackrock. 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
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 IFRA are 0.30%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.74%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For IFRA, it has heaviest allocation in the Utilities sector --about 42.30% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Enlink Midstream Common Units (ENLC - Free Report) accounts for about 1.02% of the fund's total assets, followed by Sunnova Energy International Inc (NOVA - Free Report) and Pg&e Corp (PCG - Free Report) .
Its top 10 holdings account for approximately 6.29% of IFRA's total assets under management.
Performance and Risk
The ETF has lost about -5.87% so far this year and is up about 13.59% in the last one year (as of 02/23/2022). In the past 52-week period, it has traded between $31.53 and $38.56.
The ETF has a beta of 1.07 and standard deviation of 26.71% for the trailing three-year period. With about 156 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 $3.27 billion in assets, Global X U.S. Infrastructure Development ETF has $4.88 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $788.88 million, this makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. IFRA is managed by Blackrock. 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
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 IFRA are 0.30%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.74%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For IFRA, it has heaviest allocation in the Utilities sector --about 42.30% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Enlink Midstream Common Units (ENLC - Free Report) accounts for about 1.02% of the fund's total assets, followed by Sunnova Energy International Inc (NOVA - Free Report) and Pg&e Corp (PCG - Free Report) .
Its top 10 holdings account for approximately 6.29% of IFRA's total assets under management.
Performance and Risk
The ETF has lost about -5.87% so far this year and is up about 13.59% in the last one year (as of 02/23/2022). In the past 52-week period, it has traded between $31.53 and $38.56.
The ETF has a beta of 1.07 and standard deviation of 26.71% for the trailing three-year period. With about 156 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 $3.27 billion in assets, Global X U.S. Infrastructure Development ETF has $4.88 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.