Making its debut on 04/03/2018, smart beta exchange traded fund iShares U.S. Infrastructure ETF (
IFRA Quick Quote IFRA - Free Report) provides investors broad exposure to the Utilities/Infrastructure ETFs category of the market. What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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
Managed by Blackrock, IFRA has amassed assets over $1.71 billion, making it one of the average sized 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.30% for IFRA, making it one of the cheaper products in the space.
IFRA's 12-month trailing dividend yield is 2.02%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
IFRA's heaviest allocation is in the Utilities sector, which is about 46.80% of the portfolio. Its Industrials and Materials round out the top three.
Looking at individual holdings, Allegheny Technologies Inc (
ATI Quick Quote ATI - Free Report) accounts for about 1.01% of total assets, followed by Century Aluminum ( CENX Quick Quote CENX - Free Report) and Enlink Midstream Common Units ( ENLC Quick Quote ENLC - Free Report) .
The top 10 holdings account for about 9.02% of total assets under management.
Performance and Risk
The ETF has lost about -9.51% and is down about -1.18% so far this year and in the past one year (as of 06/29/2022), respectively. IFRA has traded between $32.87 and $39.92 during this last 52-week period.
IFRA has a beta of 1.01 and standard deviation of 27.50% for the trailing three-year period. With about 155 holdings, it effectively diversifies company-specific risk.
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 Quick Quote IGF - Free Report) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF ( PAVE Quick Quote PAVE - Free Report) tracks INDXX U.S. Infrastructure Development Index. IShares Global Infrastructure ETF has $3.43 billion in assets, Global X U.S. Infrastructure Development ETF has $3.65 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.
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.