Infrastructure ETFs for Q3 2022: The Best ETFs

Aug 01, 2022 By Triston Martin

Investments in infrastructure ETFs are designed to expose investors to firms that create and manage large infrastructure projects and systems, such as roads, bridges, rivers; trains; communication networks; and energy systems. A few companies involved in infrastructure are Dominion Energy Inc., Fortis Inc., and Consolidated Edison Inc.

In the United States, nine different infrastructure ETFs are traded, omitting inverse and leveraged ETFs and funds with assets under management of less than $50 million. As of April 28, 2022, the S&P Global Infrastructure Index showed that the infrastructure sector outperformed the larger U.S. stock market by 10.5%, compared to the S&P 500's total return of 3.9%.

Is Infrastructure ETFs Worth Investing In?

An infrastructure ETF is an exchange-traded fund that invests primarily in the shares of firms that construct and maintain the essential physical underpinnings of the economy, such as transportation and energy infrastructures, as well as water infrastructures. Some examples of these businesses are railways, utilities; construction; and others. Infrastructural ETFs, like many others, follow an underlying index. The SPDR S&P index represents global infrastructure stocks. NextEra Energy, Enbridge Inc., and Transurban Group are a few of the best-known names in this sector.

Outlook for Infrastructure Exchange-Traded Funds

American Society of Civil Engineers Infrastructure Report Card ranks the United States with a C- in this area. Over $1 trillion in financing for infrastructure is supported by both President Trump and Vice President Biden. Stock ETF prices may rise due to the country's poor credit rating and the potential for large infrastructure investments.

Best ETFs for Infrastructure

Geographic diversification is the first consideration when looking for the best infrastructure ETF. Does your portfolio need global exposure, or do you want to rely on assets in the United States? Select ETFs issued by a well-known business with a proven success track record. In our ranking of the finest ETFs, we've only included the eight launched before 2020. As a result, newer infrastructure exchange-traded funds are no longer an option. We've added two of the world's largest ETFs and one that focuses just on American equities.

Alerian Energy Infrastructure ETF

The Alerian Midstream Energy Select Index is the primary focus of ENFR, a multi-cap fund. Midstream energy infrastructure businesses, including corporations & master limited partnerships, are included in the index, which covers pipeline transportation, storage and processing of energy markets. Natural gas and petroleum network transportation and collecting firms account for most of the fund's investments.

While the other two funds below invest in various infrastructure firms, ENFER has a singular concentration on energy infrastructure. There are three major interests in ENFR: Enbridge Inc., a Canada-based oil and gas pipeline firm; Enterprise Products Partners L.P. an energy pipeline company; and T.C. Energy Corp.

ProShares DJ Brookfield Global Infrastructure ETF

The Dow Jones Brookfield National Infrastructure Composite Index is the aim of TOLZ, a multi-cap blended fund. Most of the index is comprised of infrastructure owners and operators from established and emerging economies. Oil and gas storage and transportation businesses account for more than a third of the fund's holdings, followed by communications, power transmission, and distribution companies.

Over half of the portfolio is held by corporations in the United States, with Canada, the United Kingdom, Spain, and France, among others, making up the rest. 5 American Tower Corp., a real estate investment trust that owns and manages cell towers and communications infrastructure, is TOLZ's largest asset. Other notable holdings include Enbridge Inc. and Crown Castle International Corp.

SPDR S&P Global Infrastructure ETF

S&P Global Infrastructure Index monitors the S&P Global Infrastructure Index, an index of the world's 75 biggest infrastructure-related firms by market capitalization. Transport, utility, and energy infrastructure firms are all included in the fund. Utilities and industrials account for around 80% of the fund's holdings, with energy equities accounting for the remaining 20%. 7 GII is a mixed-cap fund with a wide range of holdings. Atlantia S.p.A, an Italian road, airport and general infrastructure firm, is one of GII's largest interests, as is Enbridge, a Canadian oil and gas corporation.

iShares Global Infrastructure ETF

The S&P Global Infrastructure Index is the benchmark for this ETF. In industrialised nations, including the United States, Canada, Australia, and Spain, it has invested in over 70 enterprises. As of June 30th, 2021, it has a one-year average yearly return of 22.42 per cent. It has an average yearly rate of return of 5.45 per cent over the past decade. IGF has a cost-to-income ratio of 43%.

iShares U.S. Infrastructure ETF

Few ETFs are intended to benefit from increased U.S. infrastructure expenditure. It solely invests in U.S.-listed companies. If Congress passes a major spending package, this will diminish diversity but enhance profits. IFRA's biggest shortcoming is that it only opened its doors to investors in 2018. However, the product is provided through iShares, a major global ETF provider owned by Blackrock. IFRA incurs only 0.40 per cent of total costs.

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