The infrastructure in America needs help. Political leaders from both parties have proposed spending plans that will improve transportation, energy, and other systems that impact our daily lives. This could be a suitable time to check the best infrastructure asset trading funds for your portfolio.
What are Infrastructure Asset Trading Funds?
Infrastructure asset trading funds are exchange-traded funds that primarily invest in the stocks of companies that build and maintain the fundamental physical infrastructure of the economy: transportation, energy, water, and more. These industries may include railroads, utilities, construction, and others that can benefit from infrastructure activities.
Like many exchange-traded funds, infrastructure asset trading funds often track a benchmark index. The SPDR S&P Global Infrastructure ETF tracks the S&P Global Infrastructure Index.
Some key stocks you will find in this space include NextEra Energy (NEE), Enbridge Inc (ENB), and Transurban Group (TRAUF).
Forecast for Infrastructure Asset Trading Funds
The United States received a C- rating in this area, according to the American Society of Civil Engineers’ Infrastructure Report Card. Support from both President Trump and President Biden for infrastructure plans requiring financing exceeding one trillion dollars may translate into an increase in the values of infrastructure asset trading funds.
These funds may invest globally, so exposure to domestic U.S. company stocks may be limited to less than half of the overall portfolio. Exposure to various countries and regions around the world can be a good way to build a portfolio and benefit from infrastructure growth within the United States.
Best Infrastructure Asset Trading Funds
Finding the best infrastructure asset trading fund for you first depends on geographical diversity. Do you want exposure to company stocks around the world, or would you prefer to focus on stocks owned in the United States? It is wise to choose exchange-traded funds issued by a reputable company with a strong performance record.
We have reviewed only the top eight infrastructure asset trading funds issued before January 1, 2020, in our list of the best of these funds. This excludes infrastructure asset trading funds that have very little history. We added two of the largest exchange-traded funds that invest globally and one that focuses on U.S. stocks.
Here are some of the best infrastructure asset trading funds available according to these guidelines.
SPDR S&P Global Infrastructure ETF (GII)
You will love what you see in this fund if you are looking for an exchange-traded fund with a long performance history, international diversity, and low expenses. GII opened to new investors in 2007. The fund tracks the global benchmark for these stocks, the S&P Global Infrastructure Index. U.S. stocks receive the highest regional allocation at 42.42%. The total expense ratio for GII is 0.40%.
iShares Global Infrastructure ETF (IGF)
This fund tracks the S&P Global Infrastructure Index. It invests in over 70 companies based in developed countries such as the United States, Canada, Australia, and Spain. The one-year average annual return for IGF was 22.42% as of June 30, 2021. The 10-year average annual return is 5.45%. The expense ratio for IGF is 0.43%.
iShares U.S. Infrastructure ETF (IFRA)
IFRA is one of the traded funds designed to benefit from increased infrastructure spending in the United States. The IFRA fund focuses solely on domestic stocks. This reduces diversity but increases profits if Congress passes a large spending package. However, a slight drawback of IFRA is that it has only been available to investors since 2018. Nevertheless, the fund is offered by iShares, a subsidiary of Blackrock, one of the largest exchange-traded fund companies in the world. IFRA’s costs are low at 0.40%.
Conclusions
Main
Core asset trading funds can help take advantage of increased government spending on infrastructure. Government spending packages can be difficult to pass. As with other sector funds, core asset trading funds should be used as diversification tools. Do not allocate 100% of your portfolio to one area of the market.
Note: The Balance does not offer tax or investment advice. This information is provided without regard to the investment objectives, risk tolerance, or financial circumstances of any investor. It may not be suitable for all investors. Investing involves risks, including the loss of principal.
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Sources:
- American Society of Civil Engineers. “America’s Infrastructure Report Card.”
- State Street Global Advisors. “SDPR S&R Global Infrastructure ETF.”
- iShares. “iShares Global Infrastructure ETF.”
- Blackrock. “iShares U.S. Infrastructure ETF.”
Source: https://www.thebalancemoney.com/best-infrastructure-etfs-to-buy-4689130
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