Launched on 04/03/2018, the iShares U.S. Infrastructure ETF (IFRA) is a smart beta exchange traded fund offering 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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 & Index
The fund is managed by Blackrock, and has been able to amass over $3.19 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 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 IFRA are 0.30%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.71%.
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 41.20% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, New Fortress Energy Inc Class A (NFE) accounts for about 1.02% of total assets, followed by Antero Midstream Corp (AM) and Kinder Morgan Inc (KMI).
Its top 10 holdings account for approximately 3.45% of IFRA's total assets under management.
Performance and Risk
The ETF return is roughly 2.05% so far this year and is up about 23.71% in the last one year (as of 01/29/2025). In the past 52-week period, it has traded between $38.36 and $51.71.
The fund has a beta of 1.05 and standard deviation of 18.47% for the trailing three-year period. With about 166 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) 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 $5.11 billion in assets, Global X U.S. Infrastructure Development ETF has $8.88 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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Get it free >>iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports
Antero Midstream Corporation (AM) : Free Stock Analysis Report
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
iShares Global Infrastructure ETF (IGF): ETF Research Reports
Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports
New Fortress Energy LLC (NFE) : Free Stock Analysis Report
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