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Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
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The iShares U.S. Infrastructure ETF (IFRA - Free Report) made its debut on 04/03/2018, and is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $2.42 billion, this makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA is managed by Blackrock. 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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.30%.
The fund has a 12-month trailing dividend yield of 1.78%.
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.
This ETF has heaviest allocation in the Utilities sector - about 38.40% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, Vistra Corp (VST - Free Report) accounts for about 0.85% of total assets, followed by Mge Energy Inc (MGEE - Free Report) and Nrg Energy Inc (NRG - Free Report) .
The top 10 holdings account for about 7.82% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Infrastructure ETF return is roughly 8.97% so far, and it's up approximately 20.69% over the last 12 months (as of 05/24/2024). IFRA has traded between $34.58 and $44.87 in this past 52-week period.
IFRA has a beta of 1.04 and standard deviation of 18.42% for the trailing three-year period. With about 170 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 $3.73 billion in assets, Global X U.S. Infrastructure Development ETF has $7.55 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?
The iShares U.S. Infrastructure ETF (IFRA - Free Report) made its debut on 04/03/2018, and is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $2.42 billion, this makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. IFRA is managed by Blackrock. 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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.30%.
The fund has a 12-month trailing dividend yield of 1.78%.
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.
This ETF has heaviest allocation in the Utilities sector - about 38.40% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, Vistra Corp (VST - Free Report) accounts for about 0.85% of total assets, followed by Mge Energy Inc (MGEE - Free Report) and Nrg Energy Inc (NRG - Free Report) .
The top 10 holdings account for about 7.82% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Infrastructure ETF return is roughly 8.97% so far, and it's up approximately 20.69% over the last 12 months (as of 05/24/2024). IFRA has traded between $34.58 and $44.87 in this past 52-week period.
IFRA has a beta of 1.04 and standard deviation of 18.42% for the trailing three-year period. With about 170 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 $3.73 billion in assets, Global X U.S. Infrastructure Development ETF has $7.55 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.