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Blackrock Launches Infrastructure ETF

By Zacks Investment ResearchStock MarketsApr 18, 2018 03:11AM ET
www.investing.com/analysis/blackrock-launches-infrastructure-etf-200306664
Blackrock Launches Infrastructure ETF
By Zacks Investment Research   |  Apr 18, 2018 03:11AM ET
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Blackrock (NYSE:BLK) launched a fund on Apr 5, focused on providing exposure to the infrastructure space of the United States equity market.
iShares U.S. Infrastructure ETF IFRA seeks to track, before fees and expenses, the performance of the NYSE FactSet U.S. Infrastructure Index.
Fund Characteristics
The fund’s index seeks to provide exposure to U.S. infrastructure companies that can benefit from an increase in domestic infrastructure activities.
The ETF’s index splits potential holdings into two groups — owners and operators — which could include railroads and utilities, and enablers. Enablers could be companies that provide raw materials or construction services. Each of the groups account for 50% of the portfolio, with the component stocks under the groups receiving equal weight.
“In particular, IFRA may allow investors to express a thematic view as it’s designed to offer exposure to U.S. companies that derive more than 50 percent of their revenue domestically, which could benefit from a potential increase in infrastructure activities in the U.S.,” per an etf.com article citing a statement by Blackrock.
The fund amassed $2.6 million in AUM within a few days of trading. It charges a fee of 40 basis points a year. The fund’s top three holdings include Potlatchdeltic Corp (NASDAQ:PCH) , Vistra Energy Corp (NYSE:VST) and Cheniere Energy Inc (NYSE:LNG) , with 1.2%, 1.0% and 0.9% exposure, respectively.
How Does it Fit in a Portfolio?
The infrastructure segment of the U.S. market has played an integral role in the expansion of the U.S. economy. President Trump made repairing America’s infrastructure one of the key points of his election campaign.
Trump unveiled a $1.5-trillion infrastructure plan in February, which is based on heavy investments from local and state governments. The Republican leader is pushing to use $200 billion of federal money to aid the ailing infrastructure in the United States. "Now is the time to rebuild our country, to take care of our people, to fight for our great American workers,” Trump said in a union training center speech in Ohio.
In case Congress ends up passing the infrastructure bill, this fund will be among the highest gainers. Moreover, it is a one-of-a-kind ETF since there are hardly any funds with such a high inclination toward U.S. infrastructure specifically.
Competition
The fund faces slight competition, owing to its high focus on U.S. infrastructure. Below we discuss a few ETFs that seek to provide exposure to the infrastructure sector.
ProShares DJ Brookfield Global Infrastructure ETF TOLZ
This fund seeks to provide exposure to infrastructure stocks and tracks the Dow Jones Brookfield Global Infrastructure Composite Index. It has 50.2% exposure to the United States. It has AUM of $38.7 million and charges a fee of 46 basis points a year.
The fund’s top three holdings are Enbridge Inc, American Tower Corp (NYSE:AMT) and Vinci SA (PA:SGEF) with 5.9%, 5.0% and 4.7% allocation, respectively. The fund has lost 1.1% in a year and 5.2% year to date.
SPDR S&P Global Infrastructure (NYSE:GII) ETF GII
This fund seeks to provide exposure to infrastructure stocks and tracks the Macquarie Global Infrastructure 100 Index. It has 34.7% exposure to the United States. It has AUM of $223.6 million and charges a fee of 40 basis points a year.
The fund’s top three holdings are Abertis Infraestructuras SA, Transurban Group Ltd. and Aena SME SA with 5.0%, 4.9% and 4.6% allocation, respectively. The fund has returned 3.9% in a year but lost 4.6% year to date.
iShares Global Infrastructure ETF IGF
This fund seeks to provide exposure to infrastructure stocks and tracks the S&P Global Infrastructure Index. It has 34.6% exposure to the United States. It has AUM of $2.5 billion and charges a fee of 48 basis points a year.
The fund’s top three holdings are Abertis Infraestructuras SA, Transurban Group Ltd. and Aena SME SA with 5.0%, 4.9% and 4.7% allocation, respectively. The fund has returned 4.2% in a year but lost 4.6% year to date.
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Blackrock launched a fund on Apr 5, focused on providing exposure to the infrastructure space of the United States equity market.
iShares U.S. Infrastructure ETF (IFRA) seeks to track, before fees and expenses, the performance of the NYSE FactSet U.S. Infrastructure Index.
Fund Characteristics
The fund’s index seeks to provide exposure to U.S. infrastructure companies that can benefit from an increase in domestic infrastructure activities.
The ETF’s index splits potential holdings into two groups — owners and operators — which could include railroads and utilities, and enablers. Enablers could be companies that provide raw materials or construction services. Each of the groups account for 50% of the portfolio, with the component stocks under the groups receiving equal weight.
“In particular, IFRA may allow investors to express a thematic view as it’s designed to offer exposure to U.S. companies that derive more than 50 percent of their revenue domestically, which could benefit from a potential increase in infrastructure activities in the U.S.,” per an etf.com article citing a statement by Blackrock.
The fund amassed $2.6 million in AUM within a few days of trading. It charges a fee of 40 basis points a year. The fund’s top three holdings include Potlatchdeltic Corp (PCH), Vistra Energy Corp (VST) and Cheniere Energy Inc (LNG), with 1.2%, 1.0% and 0.9% exposure, respectively.
How Does it Fit in a Portfolio?
The infrastructure segment of the U.S. market has played an integral role in the expansion of the U.S. economy. President Trump made repairing America’s infrastructure one of the key points of his election campaign.
Trump unveiled a $1.5-trillion infrastructure plan in February, which is based on heavy investments from local and state governments. The Republican leader is pushing to use $200 billion of federal money to aid the ailing infrastructure in the United States. "Now is the time to rebuild our country, to take care of our people, to fight for our great American workers,” Trump said in a union training center speech in Ohio.
In case Congress ends up passing the infrastructure bill, this fund will be among the highest gainers. Moreover, it is a one-of-a-kind ETF since there are hardly any funds with such a high inclination toward U.S. infrastructure specifically.
Competition
The fund faces slight competition, owing to its high focus on U.S. infrastructure. Below we discuss a few ETFs that seek to provide exposure to the infrastructure sector.
ProShares DJ Brookfield Global Infrastructure ETF (TOLZ)
This fund seeks to provide exposure to infrastructure stocks and tracks the Dow Jones Brookfield Global Infrastructure Composite Index. It has 50.2% exposure to the United States. It has AUM of $38.7 million and charges a fee of 46 basis points a year.
The fund’s top three holdings are Enbridge Inc, American Tower Corp (AMT) and Vinci SA with 5.9%, 5.0% and 4.7% allocation, respectively. The fund has lost 1.1% in a year and 5.2% year to date.
SPDR S&P Global Infrastructure ETF (GII)
This fund seeks to provide exposure to infrastructure stocks and tracks the Macquarie Global Infrastructure 100 Index. It has 34.7% exposure to the United States. It has AUM of $223.6 million and charges a fee of 40 basis points a year.
The fund’s top three holdings are Abertis Infraestructuras SA, Transurban Group Ltd. and Aena SME SA with 5.0%, 4.9% and 4.6% allocation, respectively. The fund has returned 3.9% in a year but lost 4.6% year to date.
iShares Global Infrastructure ETF (IGF)
This fund seeks to provide exposure to infrastructure stocks and tracks the S&P Global Infrastructure Index. It has 34.6% exposure to the United States. It has AUM of $2.5 billion and charges a fee of 48 basis points a year.
The fund’s top three holdings are Abertis Infraestructuras SA, Transurban Group Ltd. and Aena SME SA with 5.0%, 4.9% and 4.7% allocation, respectively. The fund has returned 4.2% in a year but lost 4.6% year to date.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>


American Tower Corporation (REIT) (AMT): Free Stock Analysis Report

Potlatch Corporation (PCH): Free Stock Analysis Report

ISHARS-GL IN (IGF): ETF Research Reports

SPDR-F/M GI100 (GII): ETF Research Reports

PRO-DJ BF GB IF (TOLZ): ETF Research Reports

Cheniere Energy, Inc. (LNG): Free Stock Analysis Report

Vistra Energy Corp. (VST): Free Stock Analysis Report

ISHR-US INFRAST (IFRA): ETF Research Reports

Original post

Zacks Investment Research

Blackrock Launches Infrastructure ETF
 

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Blackrock Launches Infrastructure ETF

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