Designed to provide broad exposure to the Utilities - Infrastructure segment of the equity market, the iShares U.S. Infrastructure ETF (IFRA) is a passively managed exchange traded fund launched on 04/03/2018.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.53 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. 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.
Costs
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 counterparts, other things remaining 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 1.75%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 41.90% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, Vistra Corp- (VST) accounts for about 1.08% of total assets, followed by Nextera Energy Inc- (NEE) and Nrg Energy Inc- (NRG).
The top 10 holdings account for about 8.87% of total assets under management.
Performance and Risk
The ETF has added about 12.57% so far this year and it's up approximately 15.69% in the last one year (as of 07/17/2024). In that past 52-week period, it has traded between $34.58 and $45.
The ETF has a beta of 1.02 and standard deviation of 18.37% for the trailing three-year period. With about 168 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Infrastructure ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IFRA is a good option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Global Infrastructure ETF (IGF) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF (PAVE) 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 $7.96 billion. IGF has an expense ratio of 0.41% and PAVE charges 0.47%.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
iShares Global Infrastructure ETF (IGF): ETF Research Reports
Vistra Corp. (VST) : Free Stock Analysis Report
Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
