Comparing the Infrastructure ETFs | ETF Trends

Before you buy an exchange traded fund (ETF), you should take a few minutes to pop the hood and have a look-see. Skip this crucial step, and you could wind up with an unwanted surprise.

This is especially important when you’re comparing multiple funds across the same asset class or sector. Take infrastructure.

Currently, there are more than half a dozen infrastructure ETFs that all include the word “infrastructure” in the name and target the same area, notes Roger Nusbaum for TheStreet. However, each fund is different, with its own set of attributes.

The infrastructure sector is expected to see a strong tailwind as it gets a copious cash infusion over next few years. More than $1 trillion is allocated in India alone for 2012 to 2017. Still, risks include normal market volatility, inefficient allocation of money and potential corruption.

The SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSEArca: GII) was the first ETF in the space. GII has a large weighting of 85% in utilities, which makes it less volatile than other infrastructure funds. The fund didn’t plummet during the downturn, but it also didn’t go up as much when the markets improved. This risk here, though, is that utilities will get hit when interest rates rise since money flows to bonds. [Coming to America with Infrastructure ETFs.]