News

If you're interested in broad exposure to the Utilities - Infrastructure segment of the equity market, look no further than the iShares U.S. Infrastructure ETF (IFRA), 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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $2.22 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 2.02%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector--about 40.80% of the portfolio. Industrials and Materials round out the top three.

Looking at individual holdings, Nrg Energy Inc (NRG) accounts for about 0.89% of total assets, followed by Vistra Corp (VST) and New Fortress Energy Inc Class A (NFE).

The top 10 holdings account for about 8.02% of total assets under management.

Performance and Risk

So far this year, IFRA has lost about -2.09%, and is up about 8.12% in the last one year (as of 01/10/2024). During this past 52-week period, the fund has traded between $34.58 and $40.63.

The ETF has a beta of 1.05 and standard deviation of 18.80% for the trailing three-year period. With about 159 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 $5.53 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.

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iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports

iShares Global Infrastructure ETF (IGF): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.