Investigating Big Infrastructure Opportunities

For two years now, infrastructure investments, including exchange traded funds, have been receiving increased attention. The iShares U.S. Infrastructure ETF (Cboe: IFRA) is a new way to play that theme. IFRA debuted earlier this month.

The iShares U.S. Infrastructure ETF tries to reflect the performance of the NYSE FactSet U.S. Infrastructure Index, which includes U.S. companies focused on infrastructure activities, according to a prospectus sheet.

Specifically, component holdings fall under one of the 95 infrastructure-related industries defined by FactSet Revere Business Industry Classification System. Each company is classified as either Category 1 or Category 2, where Category 1 companies are infrastructure enablers and Category 2 are infrastructure asset owners and operators. The index is all equally weighted.

Investors Await Trump Infrastructure Support

“Since President Trump was elected promising major investments in infrastructure, investors have eagerly awaited that to come to fruition, recognizing it could have a major impact if enacted thoughtfully,” said BlackRock in a recent note. “We still believe that the prospects of some sort of infrastructure package look positive. However, it is also important to consider the broader case for investing in infrastructure companies, and to understand the nuances of investing in the asset class.”

Related: iShares Rolls Out Infrastructure, Commodity ETFs

IFRA’s category 1 infrastructure enablers include those in construction and engineering services, machineries and materials. Category 2 or infrastructure asset owners and operators are companies associated with traditional equity infrastructure investing, including those in energy transportation and storage, railroad transportation and utilities.