Companies in the infrastructure sector build and maintain major projects and systems such as roads, bridges, waterways, railways, communication networks, and electricity systems. Companies involved in this category include Sempra Energy (SRE), Fortis Inc. (FTS), and Crown Castle International Corp. (CCI). The need for heavy spending on infrastructure is becoming a growing priority among national leaders in Washington despite the drastic decline in economic activity due to the COVID-19 pandemic. Investors seeking exposure across the diversified group of infrastructure companies, while also mitigating risk, might consider infrastructure exchange-traded funds (ETFs).
There are 5 ETFs in the infrastructure universe, which excludes funds with under $50 million in assets under management (AUM) as well as inverse and leveraged funds,. The best infrastructure ETF for Q3 2020 is the FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA). We examine the top 3 infrastructure ETFs below. All figures are as of June 17, 2020.
- Performance over 1-Year: -1.1%
- Expense Ratio: 0.47%
- Annual Dividend Yield: 2.59%
- 3-Month Average Daily Volume: 211,192
- Assets Under Management: $1.7 billion
- Inception Date: October 8, 2013
- Issuer: FlexShares
The benchmark for NFRA is the STOXX Global Broad Infrastructure Index, which is designed to track the performance of infrastructure companies that are in both developed and emerging markets, including the U.S. Companies in the NFRA portfolio include industrials, utilities, communication services, and more. The current top holdings in the ETF include Canadian National Railway Co. (CNR.TO), the freight railway; Verizon Communications Inc. (VZ), the telecommunications conglomerate; and AT&T Inc. (T), the telecommunications and entertainment multinational.
- Performance over 1-Year: -5.0%
- Expense Ratio: 0.46%
- Annual Dividend Yield: 3.46%
- 3-Month Average Daily Volume: 39,217
- Assets Under Management: $146.0 million
- Inception Date: March 25, 2014
- Issuer: ProShares
The ProShares DJ Brookfield Global Infrastructure ETF tracks the Dow Jones Brookfield Global Infrastructure Composite Index, which is comprised of stocks worldwide that are considered "pure-play" infrastructure companies. The fund holds large-cap utilities and other infrastructure companies in developed markets. The current top holdings in TOLZ include American Tower Corp. (AMT), the owner and operator of wireless communication towers; Enbridge Inc. (ENB), the Canadian energy transportation company; and Crown Castle International Corp. (CCI), the communications services firm.
- Performance over 1-Year: -11.8%
- Expense Ratio: 0.95%
- Annual Dividend Yield: 4.65%
- 3-Month Average Daily Volume: 1,031,738
- Assets Under Management: $2.0 billion
- Inception Date: June 20, 2012
- Issuer: First Trust
EMLP is an actively-managed fund that focuses on Canadian income trusts, pipeline companies, and utilities companies deriving at least half of their revenue from the operation of infrastructure assets, among other categories of companies. The top holdings for EMLP are TC Energy Corp. (TRP), the pipelines and energy company; Enterprise Products Partners LP (EPD), the midstream natural gas and oil pipeline firm; and Nextera Energy Partners LP (NEP), the renewable energy company.