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 are also funds of convenience, offering many 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 12, placing it in bottom 25%.
The fund is sponsored by Global X Management. It has amassed assets over $3.98 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 0.59%.
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 69.10% of the portfolio. Materials and Utilities round out the top three.
Looking at individual holdings, Nucor Corp (
NUE Quick Quote NUE - Free Report) accounts for about 4.26% of total assets, followed by Sempra Energy ( SRE Quick Quote SRE - Free Report) and Deere & Co ( DE Quick Quote DE - Free Report) .
The top 10 holdings account for about 30.54% of total assets under management.
Performance and Risk
So far this year, PAVE has lost about -16.84%, and is down about -9.53% in the last one year (as of 06/14/2022). During this past 52-week period, the fund has traded between $23.70 and $29.01.
The ETF has a beta of 1.27 and standard deviation of 31.54% for the trailing three-year period. With about 100 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.
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 $1.70 billion in assets, iShares Global Infrastructure ETF has $3.39 billion. IFRA has an expense ratio of 0.30% and IGF charges 0.43%. Bottom Line
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