News

Launched on 03/06/2017, the Global X U.S. Infrastructure Development ETF (PAVE) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Infrastructure segment of the equity market.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 2, placing it in top 13%.

Index Details

The fund is sponsored by Global X Management. It has amassed assets over $7.32 billion, making it one of the largest ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. PAVE seeks to match the performance of the INDXX U.S. Infrastructure Development Index before fees and expenses.

The INDXX U.S. Infrastructure Development Index measure the performance of U.S. listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.

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 0.47%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.64%.

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 Industrials sector--about 72.30% of the portfolio. Materials and Utilities round out the top three.

Looking at individual holdings, Eaton Corp Plc (ETN) accounts for about 3.53% of total assets, followed by Trane Technologies Plc (TT) and Quanta Services Inc (PWR).

The top 10 holdings account for about 30.64% of total assets under management.

Performance and Risk

Year-to-date, the Global X U.S. Infrastructure Development ETF has gained about 6.72% so far, and it's up approximately 19.44% over the last 12 months (as of 07/09/2024). PAVE has traded between $28.26 and $39.81 in this past 52-week period.

The ETF has a beta of 1.23 and standard deviation of 21.03% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.

Alternatives

Global X U.S. Infrastructure Development ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PAVE is an excellent option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

IShares U.S. Infrastructure ETF (IFRA) tracks NYSE FACTSET U.S. INFRASTRUCTURE INDEX and the iShares Global Infrastructure ETF (IGF) tracks S&P Global Infrastructure Index. IShares U.S. Infrastructure ETF has $2.34 billion in assets, iShares Global Infrastructure ETF has $3.59 billion. IFRA has an expense ratio of 0.30% and IGF charges 0.41%.

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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Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports

Quanta Services, Inc. (PWR) : Free Stock Analysis Report

Eaton Corporation, PLC (ETN) : Free Stock Analysis Report

iShares Global Infrastructure ETF (IGF): ETF Research Reports

Trane Technologies plc (TT) : Free Stock Analysis Report

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