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Designed to provide broad exposure to the Utilities - Infrastructure segment of the equity market, the Global X U.S. Infrastructure Development ETF (PAVE) is a passively managed exchange traded fund launched on 03/06/2017.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
The fund is sponsored by Global X Management. It has amassed assets over $4.45 billion, making it one of the largest ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. PAVE seeks to match the performance of the INDXX U.S. Infrastructure Development Index before fees and expenses.
The INDXX U.S. Infrastructure Development Index measure the performance of U.S. listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.47%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 71.50% of the portfolio. Materials and Utilities round out the top three.
Looking at individual holdings, Nucor Corp (NUE) accounts for about 3.30% of total assets, followed by Trane Technologies Plc (TT) and Eaton Corp Plc (ETN).
The top 10 holdings account for about 30.29% of total assets under management.
Performance and Risk
So far this year, PAVE has added about 25.63%, and is up about 46.58% in the last one year (as of 10/08/2021). During this past 52-week period, the fund has traded between $17.05 and $27.63.
The ETF has a beta of 1.31 and standard deviation of 31.29% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Global X U.S. Infrastructure Development ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PAVE is an excellent option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Infrastructure ETF (IFRA) tracks NYSE FACTSET U.S. INFRASTRUCTURE INDEX and the iShares Global Infrastructure ETF (IGF) tracks S&P Global Infrastructure Index. IShares U.S. Infrastructure ETF has $675.23 million in assets, iShares Global Infrastructure ETF has $3.06 billion. IFRA has an expense ratio of 0.40% and IGF charges 0.43%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports
Nucor Corporation (NUE) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
iShares Global Infrastructure ETF (IGF): ETF Research Reports
Trane Technologies plc (TT) : Free Stock Analysis Report
iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports
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