Which Infrastructure ETF Builds A Better Portfolio?
December 18th, 2007 at 12:00pm by Tom Lydon
There is a global trend with infrastructure investments, so which exchange traded fund (ETF) gives a better play? Last week iShares S&P Global Infrastructure ETF (IGF) debuted, giving investors another option besides the SPDR FTSE Macquarie Global Infrastructure 100 ETF (GII). Matthew D. McCall for Seeking Alpha reports that when considering one of these funds, it is good to take into account what is included in infrastructure. He says that the construction and engineering aspects of the following constitute the sector: water infrastructure, toll roads, airports, power grids, and nuclear plants.
IGF – This ETF comprises 40% utilities, 22% highways and railroads, 20% oil and gas storage and transportation, and 8% marine ports. U.S. companies make up 23.7%, followed by Australia and Spain each at 8.9%. Top holdings include E. ON AG, Atlantia SPA and Abertis Infraestructuras SA.
GII - GII is made up of 88% utilities, 5% energy, 3% industrials and 2% telecom. The U.S. represents 37% of the ETF, followed by Germany at 11% and France at 10%. Top holdings include E. ON AG, Suez and Iberdrola.
Both ETFs offer exposure in the top infrastructure companies around the globe, but they are two different ETFs. So if you want exposure to infrastructure in your portfolio, it is important to know what you want and know how the ETFs are constructed.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.