President Trump says his infrastructure plan will “build gleaming new roads, bridges, highways, railways, and waterways across our land.” That commitment to spending on infrastructure is making exchange-traded funds that focus on this sector attractive.

The top infrastructure ETFs in the United States have been regularly paying handsome dividends and saw impressive 2017 returns. There is a lot of stability in companies that build infrastructure because their contracts tend to be for extended terms. Revenues are steady, and future earnings are predictable. 

In 2018, similar to many other sectors, technology and technology disruption will be a factor. Therefore, many predictions for plans and top companies in the sector will be highly influenced by technological factors such as changes in electricity generation, transportation modes, and communication methods. Winners in the infrastructure category are likely to have an edge in technology and innovations.

As a result, the infrastructure sector is expected to grow broadly, with established companies offering higher dividends to entice investors. Below are four of the top infrastructure ETFs with return momentum expected to carry through 2018. Funds were chosen based on category performance. All figures are current as of February 12, 2018. Note that none of these ETFs are a pure play on U.S. infrastructure, but they all have significant U.S. exposure.

1. SPDR S&P Global Infrastructure ETF (GII)

  • Net Assets: 204.3M
  • Yield: 3.34%
  • YTD Return: 1.10%
  • Expense Ratio (net): 0.40%

This fund follows the S&P Global Infrastructure Index. It seeks to mimic the total performance of that index, and therefore keeps at least 80% of its assets in securities that are in the index. It also invests in depositary receipts that are based on securities from the index. Note that the underlying index is made up of the top 75 publicly traded infrastructure companies.

2. iShares Global Infrastructure ETF (IGF)

  • Net Assets: 2.53B
  • Yield: 2.92%
  • YTD Return: 1.22%
  • Expense Ratio (net): 0.48%

This fund also tracks the S&P Global Infrastructure Index. However, it keeps 90% of its assets in securities from the underlying index. It may also invest in securities that are similar to those of the index. Up to 10% of its assets may be invested in futures, options, and swaps. It only invests in companies that are in developed countries.

3. Legg Mason Global Infrastructure ETF (INFR)

  • Net Assets: 35.03M
  • Yield: 2.61%
  • YTD Return: 0.14%
  • Expense Ratio (net): 0.53%

INFR follows the RARE Global Infrastructure Index, keeping 80% of its funds in the index’s securities. All securities in the index are also in the MSCI ACWI All Cap Index. Note that these securities are screened so that they are in the Global Industry Classification Standard.

 

4. FlexShares STOXX Global Broad Infras ETF (NFRA)

  • Net Assets: 874.49M
  • Yield: 2.77%
  • YTD Return: 1.43%
  • Expense Ratio (net): 0.47%

The underlying index for this fund is the STOXX Global Broad Infrastructure Index. The index is designed to track the performance of infrastructure companies that are in both developed and emerging markets, including the U.S.

The Bottom Line

U.S. infrastructure may be a strong play under President Trump’s infrastructure plan, and the above ETFs have U.S. exposure. However, as obvious as this play may seem, the market does not always do the obvious. Some of the infrastructure changes may already be priced into the underlying securities of these ETFs. It would be wise to watch their performance under the new plan and make sure they are responding favorably.

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