Is iShares U.S. Infrastructure ETF (IFRA) a Strong ETF Right Now?
Smart Beta ETF report for IFRA
The iShares U.S. Infrastructure ETF (IFRA - Free Report) was launched on 04/03/2018, and is a smart beta exchange traded fund designed to offer broad exposure to the Utilities/Infrastructure ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.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.This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.Fund Sponsor & IndexThe fund is managed by Blackrock, and has been able to amass over $1.76 billion, which makes it one of the larger ETFs in the Utilities/Infrastructure ETFs. This particular fund, 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 ExpensesFor 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 cheaper products in the space, this ETF has annual operating expenses of 0.30%.The fund has a 12-month trailing dividend yield of 1.98%.Sector Exposure and Top HoldingsWhile 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 42.20% of the portfolio. Industrials and Materials round out the top three.Taking into account individual holdings, Infrastructure And Energy Alternat accounts for about 1.01% of the fund's total assets, followed by Xpel Inc (XPEL - Free Report) and Otter Tail Corp (OTTR - Free Report) .Its top 10 holdings account for approximately 6.14% of IFRA's total assets under management.Performance and RiskThe ETF has lost about -0.06% and is down about -3.20% so far this year and in the past one year (as of 01/04/2023), respectively. IFRA has traded between $32.24 and $39.92 during this last 52-week period.The ETF has a beta of 1.04 and standard deviation of 28.66% for the trailing three-year period.
With about 163 holdings, it effectively diversifies company-specific risk.AlternativesIShares U.S. Infrastructure ETF is an excellent option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. There are other ETFs in the space which investors could consider as well.Global X U.S.
Infrastructure Development ETF (PAVE - Free Report) tracks INDXX U.S. Infrastructure Development Index and the iShares Global Infrastructure ETF (IGF - Free Report) tracks S&P Global Infrastructure Index. Global X U.S.
Infrastructure Development ETF has $3.54 billion in assets, iShares Global Infrastructure ETF has $3.94 billion. PAVE has an expense ratio of 0.47% and IGF charges 0.40%.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 LineTo 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.