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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
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Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the iShares U.S. Infrastructure ETF (IFRA - Free Report) is a smart beta exchange traded fund launched on 04/03/2018.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Blackrock, IFRA has amassed assets over $1.87 billion, making it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA 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.
Annual operating expenses for this ETF are 0.30%, making it one of the cheaper products in the space.
IFRA's 12-month trailing dividend yield is 2.04%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 39.10% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 1.27% of the fund's total assets, followed by Vistra Corp (VST - Free Report) and Mge Energy Inc (MGEE - Free Report) .
The top 10 holdings account for about 8.38% of total assets under management.
Performance and Risk
The ETF has added about 8% and was up about 16.06% so far this year and in the past one year (as of 07/11/2023), respectively. IFRA has traded between $32.24 and $39.80 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 19.94% for the trailing three-year period. With about 166 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - 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 $3.77 billion in assets, Global X U.S. Infrastructure Development ETF has $4.84 billion. IGF has an expense ratio of 0.40% 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.
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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the iShares U.S. Infrastructure ETF (IFRA - Free Report) is a smart beta exchange traded fund launched on 04/03/2018.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Blackrock, IFRA has amassed assets over $1.87 billion, making it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA 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.
Annual operating expenses for this ETF are 0.30%, making it one of the cheaper products in the space.
IFRA's 12-month trailing dividend yield is 2.04%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 39.10% of the portfolio --while Industrials and Materials round out the top three.
When you look at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 1.27% of the fund's total assets, followed by Vistra Corp (VST - Free Report) and Mge Energy Inc (MGEE - Free Report) .
The top 10 holdings account for about 8.38% of total assets under management.
Performance and Risk
The ETF has added about 8% and was up about 16.06% so far this year and in the past one year (as of 07/11/2023), respectively. IFRA has traded between $32.24 and $39.80 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 19.94% for the trailing three-year period. With about 166 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - 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 $3.77 billion in assets, Global X U.S. Infrastructure Development ETF has $4.84 billion. IGF has an expense ratio of 0.40% 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.