DDesigned to provide broad exposure to the Utilities – Infrastructure segment of the equity market, the iShares US Infrastructure ETF (IFRA) is a passively managed exchange-traded fund launched on 04/03/2018.

Passively managed ETFs are increasingly popular with institutional and retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long-term investors.

Investor-friendly sector ETFs offer many options for gaining low-risk, diversified exposure to a broad group of companies in particular industries. Utilities – Infrastructure is one of the 16 major Zacks sectors in the Zacks Industry classification. He is currently ranked 7, which puts him in the top 44%.

Index details

The fund is sponsored by Blackrock. It has amassed assets of over $938.12 million, making it one of the mid-sized ETFs attempting to match the performance of the Utilities – Infrastructure segment of the stock market. The IFRA seeks to match the performance of the NYSE FACTSET US INFRASTRUCTURE INDEX before fees and expenses.

The NYSE FactSet US Infrastructure Index is comprised of stocks of US companies that have exposure to infrastructure and could benefit from a potential increase in domestic infrastructure activity.

Costs

Expense ratios are an important factor in an ETF’s performance and over the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

The annual operating expense of this ETF is 0.30%, making it one of the cheapest products on the market.

It has a 12-month dividend yield of 1.73%.

Sector exposure and main holdings

Although ETFs provide diversified exposure, which minimizes single-stock risk, a thorough examination of 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 the largest allocation to the utilities sector, approximately 43.80% of the portfolio. Industries and materials complete the top three.

In terms of individual holdings, Allegheny Technologies Inc (ATI) accounts for approximately 1.01% of total assets, followed by Century Aluminum (CENX) and Enlink Midstream Common Units (ENLC).

The top 10 holdings represent approximately 9.02% of total assets under management.

Performance and risks

The ETF’s return is around 5.01% and has risen around 15.60% so far this year and over the past year (as of 04/21/2022), respectively. IFRA has traded between $33.99 and $39.92 over this past 52-week period.

The ETF has a beta of 1.04 and a standard deviation of 26.83% for the three-year period. With approximately 155 holdings, it effectively diversifies company-specific risks.

Alternatives

IShares US Infrastructure ETF holds a Zacks ETF rating of 2 (buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. For this reason, IFRA is an exceptional option for investors who want exposure to the Utilities/Infrastructure ETF segment of the market. There are other additional ETFs in the space that investors might also consider.

IShares Global Infrastructure ETF (IGF) tracks the S&P Global Infrastructure Index and the Global X US Infrastructure Development ETF (PAVE) tracks the INDXX US Infrastructure Development Index. IShares Global Infrastructure ETF has $3.54 billion in assets, Global X US Infrastructure Development ETF has $5.10 billion. IGF has an expense ratio of 0.43% and PAVE charges 0.47%.

Conclusion

To learn more about this product and other ETFs, research products that match your investment goals, and read articles about the latest developments in the ETF investment universe, please visit Zacks ETF Center.

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iShares US Infrastructure ETF (IFRA): ETF Research Reports

Allegheny Technologies Incorporated (ATI): Free Inventory Analysis Report

iShares Global Infrastructure ETF (IGF): ETF Research Reports

Century Aluminum Company (CENX): Free Stock Analysis Report

EnLink Midstream, LLC (ENLC): Free Stock Analysis Report

Global X US Infrastructure Development ETF (PAVE): 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.