ETF Spotlight on the FlexShares STOXX Global Broad Infrastructure Index Fund (NYSEArca: NFRA), part of an ongoing series.
Assets: $26.6 million
Objective: The FlexShares STOXX Global Broad Infrastructure Index Fund tries to reflect the performance of the STOXX Global Broad Infrastructure Index, which is comprised of a global portfolio of infrastructure stocks.
Holdings: Top holdings include Vodafone (NasdaqGS: VOD) 4.0%, AT&T (NYSE: T) 4.0%, Union Pacific (NYSE: UNP) 2.7%, Canadian National railway Co. (TSE: CNR) 3.2% and Verizon Communications (NYSE: VZ) 3.1%.
What You Should Know:
- Northern Trust’s FlexShares sponsors the fund.
- NFRA has a 0.47% expense ratio.
- The ETF has 153 holdings, and the top ten components make up 29.6% of the overall allocations.
- Market capitalization break down includes mega-caps 45.4%, large-caps 40.9%, mid-caps 13.1% and small-caps 0.6%.
- Sector allocations include energy 30.5%, communication 29.6%, transportation 26.3%, government outsourcing/social 6.9% and utilities 6.7%.
- Country allocations include U.S. 40.8%, U.K. 10.7%, Canada 10.3%, Japan 10.0%, Germany 6.5%, Australia 4.2%, Spain 3.6%, France 2.6%, China 2.3% and Italy 2.2%.
- The fund began trading Oct. 8, 2013.
- NFRA is up 0.3% since its inception but down 3.6% year-to-date.
- “Infrastructure companies offer investors a defensive exposure with a low historical correlation to other global equities, and potential income generation benefits,” according to FlexShares.
- The ETF includes traditional utility, energy and transportation subsectors of the infrastructure category, along with communications and government outsourcing/social infrastructure, which should help further diversify the portfolio.
- Infrastructure spending depends on local economic growth and government fiscal spending.
- The sector is typically seen to offer a stable and predictable cash flow over the long-term.
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