Investing in infrastructure ETFs provides a diverse method of accessing this profitable market.
More importantly, the infrastructure sector is on the cusp of global change.
Companies adapting to the new realities of fluctuating funding, evolving environmental objectives, and expanding urbanization present opportunities for investors.
Moreover, this provides a rare chance for investors to capitalize on changes in this industry at the outset.
The infrastructure of a country is its bedrock. Historically, this has included infrastructure like utilities, roads and bridges, and oil and natural gas pipelines that are essential to the functioning of the economy.
The scope of this concept has broadened to include various other areas of modern life, such as renewable energy initiatives, telecommunications networks supporting mobile and remote communications, and cloud systems housing digital data.
Any nation’s economy, businesses, and families can benefit greatly from improved infrastructure.
In this article, we’ll examine a few of the best infrastructure ETFs. You may also want to check out the best airline ETFs, the best defense ETFs, and the best artificial intelligence ETFs.
If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.
What are Infrastructure ETFs?
Infrastructure ETFs give investors access to businesses involved in constructing and maintaining infrastructure such as roads, power grids, bridges, rivers, trains, and communication networks.
Dominion Energy (D), Fortis (FTS), and Consolidated Edison (ED) are all examples of companies operating in the infrastructure market.
Instead of betting on a single company, investors who want exposure to a wide range of infrastructure companies may choose to explore an infrastructure ETF.
7 Best Infrastructure ETFs
iShares Environmental Infrastructure and Industrials ETF (NASDAQ:EFRA)
The objective of the iShares Environmental Infrastructure and Industrials ETF (NASDAQ:EFRA) is to replicate the performance of the FTSE Green Revenues Select Infrastructure and Industrials Net Index.
Companies from the United States and around the world are represented in this index because of their commitment to developing infrastructural and industrial solutions that improve environmental outcomes like energy efficiency, pollution prevention, and resource conservation.
On September 25, 2023, the ETF had a portfolio of 52 stocks, up from its initial investment of $1 million on November 1, 2022.
The fund has an expense ratio of 0.47% and net assets of $4.2 million as of September 25.
Among the top holdings of iShares Environmental Infrastructure and Industrials ETF (NASDAQ:EFRA) is Westinghouse Air Brake Technologies Corporation (NYSE:WAB).
Technology-driven locomotives, machinery, solutions, and services for the global freight rail and passenger transit industries are offered by Westinghouse Air Brake Technologies Corporation (NYSE:WAB). It operates through its two divisions, Freight and Transit.
The number of optimistic hedge funds on Westinghouse Air Brake Technologies Corporation (NYSE:WAB) fell from 52 to 41 in the second quarter, according to the database.
Pzena Investment Management, led by Richard S. Pzena, had the most shares ($829.13M worth) in the company.
ProShares DJ Brookfield Global Infrastructure ETF (NYSE:TOLZ)
As an investment vehicle, ProShares DJ Brookfield Global Infrastructure ETF (NYSE:TOLZ) aspires to replicate the performance of the Dow Jones Brookfield Global Infrastructure Composite Index as precisely as possible.
This ETF began trading on March 25, 2014, and as of the 30th of June, 2023, its stock holdings number 110. The cost to the customer is only 0.46%.
The ProShares DJ Brookfield Global Infrastructure ETF (NYSE:TOLZ) has American Tower Corporation (NYSE:AMT) as one of its top holdings.
The American Tower Corporation (NYSE:AMT) is a well-known global REIT that is a leading independent owner, manager, and constructor of assets used for a variety of forms of communication.
The number of hedge funds bullish on American Tower Corporation (NYSE:AMT) fell from 65 to 60 in the second quarter, according to the database.
Charles Akre’s Akre Capital Management holds the largest interest in the company, which is now valued at $1.31 billion across 6.74 million shares.
Stocks like American Tower Corporation (NYSE:AMT), Canadian National Railway Company (NYSE:CNI), and Westinghouse Air Brake Technologies Corporation (NYSE:WAB), as well as Parker-Hannifin Corporation (NYSE:PH), are among the best in the infrastructure sector.
Bny Mellon Global Infrastructure Income ETF (BATS:BKGI)
If you’re looking for a unique way to invest in infrastructure, go no further than the Bny Mellon Global Infrastructure Income ETF (BATS:BKGI).
By concentrating on both conventional and unconventional infrastructure assets, it expands the scope of possible investments in that field.
Starting with a portfolio of 31 equities on August 31, 2023, the fund was established on November 2, 2022. On September 25, 2023, the ETF had almost $15 million in net assets and an expense ratio of 0.65%.
Bny Mellon Global Infrastructure Income ETF (BATS:BKGI) has ONEOK, Inc. (NYSE:OKE) as one of its top holdings.
When it comes to natural gas and natural gas liquids in the United States, ONEOK, Inc. (NYSE:OKE) has its hands in a number of different pots.
Various operations associated with gathering, separating, processing, transporting, storing, and promoting NGLs and natural gas are included here.
In order to better manage their business, they have separated it into three distinct divisions: Natural Gas Gathering and Processing; Natural Gas Liquids; and Natural Gas Pipelines.
A total of 35 hedge funds were long ONEOK, Inc. (NYSE:OKE) as of the end of the second quarter, up from 33 at the end of the first quarter, according to data compiled by Insider Monkey.
With 2.3 million shares worth $140.8 million, Paul Marshall and Ian Wace’s Marshall Wace LLP is the company’s largest stockholder.
SPDR S&P Kensho Intelligent Structures ETF (NYSE:SIMS)
NYSE:SIMS is an ETF that aims to replicate the total return performance of the S&P Kensho Intelligent Infrastructure Index.
Companies at the cutting edge of intelligent infrastructure innovation are specifically targeted for inclusion in this index.
The first announcement of the fund was made on December 26, 2017. When the 22nd of September, 2023 rolled around, the fund’s portfolio held 48 different equities and had an AUM of $20.86 million. This fund has a fee of 0.45% per year.
SPDR S&P Kensho Intelligent Structures ETF (NYSE:SIMS) has a significant position in Carrier Global Corporation (NYSE:CARR).
As a publicly traded corporation on the New York Stock Exchange (NYSE:CARR), Carrier Global Corporation is a world leader in HVAC&R; refrigeration; security; fire protection; and building automation systems.
Air conditioning, refrigeration, and fire and security are the three divisions that make up the whole of the organization.
Carrier Global Corporation (NYSE:CARR) had 34 hedge funds with a bullish position at the end of the second quarter, down from the previous quarter’s 41 funds.
Ric Dillon’s Diamond Hill Capital owns the most shares (4.3 million worth $216.22 million) of the company.
iShares U.S. Infrastructure ETF (BATS:IFRA)
Third on our list of the top infrastructure ETFs is the iShares U.S. Infrastructure ETF (BATS:IFRA), which seeks to replicate the performance of the NYSE FactSet U.S. Infrastructure Index, which is composed of securities issued by U.S. corporations involved in infrastructure.
These businesses may prosper as the number of domestic infrastructure projects increases.
The fund has an expense ratio of 0.30% and will manage $2.08 billion in assets as of September 25, 2023. It was established on April 3, 2018.
Among the many companies held by the iShares U.S. Infrastructure ETF (BATS:IFRA), The Greenbrier Companies, Inc. (NYSE:GBX) is a notable one.
Equipment for railroad freight carriages is developed, manufactured, and distributed globally by The Greenbrier Companies, Inc. (NYSE:GBX).
The organization is structured into three primary departments: production, maintenance, and leasing and management.
Transport businesses, banks, leasing organizations, shippers, and carriers are among its clientele.
The number of positive hedge funds on The Greenbrier Companies, Inc. (NYSE:GBX) rose from 12 in the previous quarter to 15 in the second.
With 206,505 shares worth $8.9 million, Ken Griffin’s Citadel Investment Group maintained a sizable stake in the company.
SPDR S&P Global Infrastructure ETF (NYSE:GII)
To provide investors with returns that track the overall performance of the S&P Global Infrastructure Index, the SPDR S&P Global Infrastructure ETF (NYSE:GII) tracks that index.
The ETF intends to provide exposure to the 75 largest stocks in the infrastructure sector, as determined by a weighted average of their float and market capitalization.
The fund’s inception date was January 25, 2007, and as of September 22, 2023, the fund’s 75-stock portfolio is managing $434.68 million.
It has a cost-to-income ratio of 0.40 percent. One of the best infrastructure ETFs to keep an eye on is the SPDR S&P Global Infrastructure ETF (NYSE:GII).
When it comes to the SPDR S&P Global Infrastructure ETF (NYSE:GII), NextEra Energy, Inc. (NYSE:NEE) is a top holding. Electricity is produced, transmitted, distributed, and sold to retail and wholesale consumers in North America by NextEra Energy, Inc. (NYSE:NEE).
Wind, solar, nuclear, coal, and natural gas power plants all contribute to their grid. NextEra also plays a major role in the industry of developing, building, and operating long-term contracted assets that provide clean energy solutions.
The number of hedge funds bullish on NextEra Energy, Inc. (NYSE:NEE) remained unchanged from the previous quarter at 59, according to the database as of the end of the second quarter.
John Overdeck and David Siegel’s Two Sigma Advisors owned a sizable chunk of the corporation, valued at about $190.42 million across 2.57 million shares.
Global X U.S. Infrastructure Development ETF (BATS:PAVE)
In an effort to replicate the performance of the Indxx U.S. Infrastructure Development Index, the Global X U.S. Infrastructure Development ETF (BATS:PAVE) was created.
Included in this index are firms well-positioned to profit from the United States’ recent uptick in infrastructure spending.
These businesses operate in a variety of industries, including raw material production, engineering, heavy equipment manufacturing, and construction.
Launched on March 6, 2017, the Global X U.S. Infrastructure Development ETF (BATS:PAVE) will have $5.04 billion in assets as of September 25, 2023.
It has a cost-to-income ratio of 0.47 percent. As of September 25th, 2023, 98 stocks are held in the fund’s portfolio.
Based on its 5-year performance, the Global X U.S. Infrastructure Development ETF (BATS:PAVE) is one of the best infrastructure ETFs.
One of the largest holdings in the Global X U.S. Infrastructure Development ETF (BATS:PAVE) is Parker-Hannifin Corporation (NYSE:PH).
The Parker-Hannifin Corporation (NYSE:PH) is a multinational corporation specializing in the design, development, and distribution of innovative motion and control solutions.
Mobile, industrial, and aerospace are just some of the markets that can benefit from their wares. The business operates in two divisions: Aerospace Systems and Diversified Industrial.
Data from the second quarter shows that fewer hedge funds were positive on Parker-Hannifin Corporation (NYSE:PH) than in the first quarter.
Harris Associates owns 2.26 million shares of the company’s stock for a total value of $883.16 million, making it the firm’s largest shareholder.
Final Thoughts
Investing in infrastructure ETFs provides investors with a diversified, lower-risk option. Furthermore, investment in industry disruptors can yield substantial financial gains.
However, before putting your money down, make sure you’ve done your homework. Investments carry inherent risks and there is no assurance of a positive return.
However, this is when digging into a certain fund can prove to be invaluable.
Private banking clients often seek expert advice on building diversified portfolios, which may include allocating capital to the best infrastructure ETFs and other investment funds for long-term wealth preservation.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
