Key Morningstar Metrics for iShares Global Infrastructure ETF INFR
- : SilverMorningstar Medalist Rating
- : Above AverageProcess Pillar
- : Above AveragePeople Pillar
- : Above AverageParent Pillar
IShares Global Infrastructure ETF represents a solid investment proposition by relatively low-cost, broad, and representative exposure to the developed-market listed infrastructure sector, an area in which active managers have struggled to distinguish themselves.
It tracks the market-cap-weighted FTSE Global Core Infrastructure Index, which tracks around 275 global companies that derive 65% or more of revenue from infrastructure or infrastructure-related businesses. With an ongoing charge of 0.65%, the fund is one of the cheapest in its peer group (which includes both active and passive funds), although significantly cheaper passive options exist.
The low fee has helped the fund appear in the top half of Morningstar Category peers when ranked by risk-adjusted returns over the trailing three-, five- and 10-year periods. It will continue to provide a dependable tailwind going forward.
The fund’s historical tracking difference (fund return minus index return) has been consistently below the ongoing charge. This can be explained primarily by the differences in withholding tax levied on the fund and that assumed in the index methodology. Despite the word “global” in its name, investors should be aware that this fund is geographically biased toward developed countries, in particular the US, which accounts for approximately two-thirds of geographic exposure at the time of writing. IShares has a seasoned passive management team befitting the dominant exchange-traded fund provider in Europe. The team can leverage market-leading technology and a well-oiled securities-lending program while managing its funds.
iShares Global Infrastructure ETF: Performance Highlights
The fund’s relatively low fee versus active peers acts as a constant performance tailwind that compounds over long periods.
The fund has appeared in the top half when ranked against surviving category peers on a risk-adjusted basis over three, five, and 10 years (the fund changed benchmarks in March 2017).
The breadth of the index tracked also allows the fund to benefit from diversification within the sector, although some structural bets, such as being overweight in US stocks versus peers, will continue to play an important, if unpredictable, role in returns.
The fund’s historical tracking difference (fund return minus index return) has been consistently below the ongoing charge. This can be explained primarily by the differences in withholding tax levied on the fund and that assumed in the index methodology.
