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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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 sponsored by Blackrock. It has amassed assets over $3.38 billion, making it one of the larger ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, IFRA 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for IFRA are 0.30%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.59%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 38.80% of the portfolio --while Industrials and Materials round out the top three.
Taking into account individual holdings, Vistra Corp (VST - Free Report) accounts for about 1.10% of the fund's total assets, followed by Constellation Energy Corp (CEG - Free Report) and Century Aluminum (CENX - Free Report) .
Its top 10 holdings account for approximately 6.23% of IFRA's total assets under management.
Performance and Risk
The ETF return is roughly 29.28% and was up about 40.17% so far this year and in the past one year (as of 11/29/2024), respectively. IFRA has traded between $37.66 and $51.71 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 18.49% for the trailing three-year period. With about 164 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 $4.70 billion in assets, Global X U.S. Infrastructure Development ETF has $9.64 billion. IGF has an expense ratio of 0.42% 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 sponsored by Blackrock. It has amassed assets over $3.38 billion, making it one of the larger ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, IFRA 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for IFRA are 0.30%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.59%.
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.
For IFRA, it has heaviest allocation in the Utilities sector --about 38.80% of the portfolio --while Industrials and Materials round out the top three.
Taking into account individual holdings, Vistra Corp (VST - Free Report) accounts for about 1.10% of the fund's total assets, followed by Constellation Energy Corp (CEG - Free Report) and Century Aluminum (CENX - Free Report) .
Its top 10 holdings account for approximately 6.23% of IFRA's total assets under management.
Performance and Risk
The ETF return is roughly 29.28% and was up about 40.17% so far this year and in the past one year (as of 11/29/2024), respectively. IFRA has traded between $37.66 and $51.71 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 18.49% for the trailing three-year period. With about 164 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 $4.70 billion in assets, Global X U.S. Infrastructure Development ETF has $9.64 billion. IGF has an expense ratio of 0.42% 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.