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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
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Launched on 04/03/2018, the iShares U.S. Infrastructure ETF (IFRA - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $2.20 billion, which makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA, before fees and expenses, 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
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 least expensive products in the space.
It has a 12-month trailing dividend yield of 2.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 40.50% of the portfolio --while Industrials and Materials round out the top three.
Looking at individual holdings, Nrg Energy Inc (NRG - Free Report) accounts for about 0.89% of total assets, followed by Vistra Corp (VST - Free Report) and New Fortress Energy Inc Class A (NFE - Free Report) .
IFRA's top 10 holdings account for about 8.02% of its total assets under management.
Performance and Risk
So far this year, IFRA has lost about -3.03%, and is up about 3.69% in the last one year (as of 01/16/2024). During this past 52-week period, the fund has traded between $34.58 and $40.63.
The fund has a beta of 1.05 and standard deviation of 18.80% for the trailing three-year period. With about 159 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 $3.67 billion in assets, Global X U.S. Infrastructure Development ETF has $5.55 billion. IGF has an expense ratio of 0.41% 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?
Launched on 04/03/2018, the iShares U.S. Infrastructure ETF (IFRA - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $2.20 billion, which makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA, before fees and expenses, 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
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 least expensive products in the space.
It has a 12-month trailing dividend yield of 2.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 40.50% of the portfolio --while Industrials and Materials round out the top three.
Looking at individual holdings, Nrg Energy Inc (NRG - Free Report) accounts for about 0.89% of total assets, followed by Vistra Corp (VST - Free Report) and New Fortress Energy Inc Class A (NFE - Free Report) .
IFRA's top 10 holdings account for about 8.02% of its total assets under management.
Performance and Risk
So far this year, IFRA has lost about -3.03%, and is up about 3.69% in the last one year (as of 01/16/2024). During this past 52-week period, the fund has traded between $34.58 and $40.63.
The fund has a beta of 1.05 and standard deviation of 18.80% for the trailing three-year period. With about 159 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 $3.67 billion in assets, Global X U.S. Infrastructure Development ETF has $5.55 billion. IGF has an expense ratio of 0.41% 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.