In 2022, global assets under management for infrastructure investments will reach a record high of $950 billion, according to a report by Boston Consulting Group and EDHECinfra, “Infrastructure Strategy 2022. A Pivot to the Digital Frontier.”
There are many funds available to investors looking to gain exposure to the booming industry, including the highly regarded FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA), which targets the loosely defined infrastructure segment
“It is not difficult to see why investing in digital infrastructure is a potentially lucrative strategy: the need for internet connectivity is ballooning in virtually every corner of the world. And the increasing desire for higher speeds and reliable online access will inevitably lead to a huge expansion of fiber optic installations in new networks in low- and middle-income nations as well as in existing networks in higher-income countries,” Boston Consulting Group and EDHECinfra wrote in the report.
NFRA follows a market cap-weighted index that invests in companies that derive at least 50% of their revenues from segments including energy, communications, utilities, transportation and — in an unusual twist — government outsourcing, like hospitals, prisons, and postal services, according to ETF Database.
To maintain diversification, the index imposes certain constraints, such as limits on the overall weighting of each segment. The portfolio is dominated by North American equities, followed by Japan, Australia, and the U.K, according to ETF Database.
Top holdings include Canadian National Railway, Comcast, Verizon, and the pipeline company Enbridge. The fund, as of March 23, holds 178 securities — considerably more than its category peers. The fund’s holdings span all market capitalizations, however, tilting more heavily than the category average toward large-cap companies.
With $2.6 billion in assets under management, NFRA is one of the larger infrastructure funds available on the market.
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