Best Infrastructure ETFs for Q3 2022

ENFR, TOLZ, and GII are the best infrastructure ETFs for Q3 2022

Infrastructure exchange-traded funds (ETFs) provide exposure to companies that build and maintain major projects and systems such as roads, bridges, waterways, railways, communication networks, and electricity systems. Companies in the infrastructure sector include Dominion Energy Inc.(D), Fortis Inc. (FTS), and Consolidated Edison Inc. (ED).

Investors seeking to own a diversified basket of infrastructure companies, rather than betting on an individual stock, might consider an infrastructure ETF.

Key Takeaways

  • The infrastructure sector outperformed the broader U.S. stock market over the past year.
  • The infrastructure exchange-traded funds (ETFs) with the best one-year trailing total returns are ENFR, TOLZ, and GII.
  • The top holdings of these ETFs are Enbridge Inc., American Tower Corp., and Transurban Group Ltd., respectively.

Nine distinct infrastructure ETFs trade in the United States, excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). The infrastructure sector, as measured by the S&P Global Infrastructure Index, has outperformed the broader U.S. stock market over the past 12 months, with a total return of 10.5% compared to the S&P 500’s total return of 3.9%, as of April 28, 2022. The best-performing infrastructure ETF, based on performance over the past year, is the Alerian Energy Infrastructure ETF (ENFR). Note that the top three infrastructure ETFs include an energy infrastructure fund, an electrical power infrastructure fund, and an internet infrastructure fund. Other infrastructure ETFs are generally more broad-based infrastructure funds.

We examine the best three infrastructure ETFs below. All numbers are as of April 28, 2022.

Alerian Energy Infrastructure ETF (ENFR)

  • Performance over one-year: 33.8%
  • Expense ratio: 0.35%
  • Annual dividend yield: 7.43%
  • Three-month average daily volume: 38,087
  • AUM: $101.0 million
  • Inception date: Nov. 1, 2013
  • Issuer: SS&C

ENFR is a multi-cap fund that targets the Alerian Midstream Energy Select Index. The index is composed of North American midstream energy infrastructure companies, including corporations and master limited partnerships (MLPs), engaged in pipeline transportation, storage, and processing of energy commodities. About 90% of the fund’s holdings are in companies involved in gathering and processing, and in natural gas and petroleum pipeline transportation. ENFER’s focus on energy infrastructure makes it different from the other two funds below, both of which invest in a different targeted portfolio of infrastructure companies.

The top holdings of ENFR include Enbridge Inc. (ENB:TSE), a Canada-based pipeline company; Enterprise Products Partners L.P. (EPD), a midstream gas and crude oil pipeline company; and TC Energy Corp. (TRP:TSE), a Canada-based energy company.

ProShares DJ Brookfield Global Infrastructure ETF (TOLZ)

  • Performance over one-year: 13.3%
  • Expense ratio: 0.46%
  • Annual dividend yield: 3.26%
  • Three-month average daily volume: 13,429
  • AUM: $147.6 million
  • Inception date: March 25, 2014
  • Issuer: ProShares

TOLZ is a multi-cap, blended fund that targets the Dow Jones Brookfield Global Infrastructure Composite Index. The index is comprised of companies in developed and emerging markets whose primary business is owning and operating infrastructure. Over a third of the fund's portfolio is allocated toward oil & gas storage & transportation companies, followed by communications and electricity transmission & distribution firms. U.S.-based companies account for just over half of the portfolio, with other top-represented countries including Canada, the U.K., Spain, and France, among others.

The top holdings of TOLZ include American Tower Corp. (AMT), a real estate investment trust (REIT) that owns and operates cellular and wireless towers and infrastructure; Enbridge Inc.; and Crown Castle International Corp. (CCI), a REIT that owns and operates cell towers and fiber networks.

SPDR S&P Global Infrastructure ETF (GII)

  • Performance over one-year: 11.2%
  • Expense ratio: 0.40%
  • Annual dividend yield: 2.26%
  • Three-month average daily volume: 43,098
  • AUM: $504.6 million
  • Inception date: Jan. 25, 2007
  • Issuer: State Street

GII tracks the S&P Global Infrastructure Index, an index comprised of the 75 largest infrastructure-related stocks based on float-adjusted market capitalization. The fund provides exposure to transportation, utilities, and energy infrastructure companies. About 80% of the fund's portfolio is split roughly evenly between utilities and industrials stocks, with energy stocks making up the remainder. GII is a multi-cap, blended fund.

The top holdings of GII include Transurban Group Ltd. (TCL:ASX), an Australia-based urban toll road operator; Atlantia S.p.A (ATL:MIL), an Italy-based road, airport, and general infrastructure company; and Enbridge.

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