This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Infrastructure Funds Look Shaky

Even if the outlook for spending on highways and bridges is uncertain, there is still a good case for holding utilities. With demand for gas and power steady, utilities stocks tend to pay solid dividends and deliver consistent earnings. For investors seeking a utilities fund, the SPDR infrastructure ETF makes a sound choice. The fund yields 4.7%. During the past three years, it has returned 5.2% annually, outdoing iShares S&P Global Utilities by 2 percentage points. Part of the reason for the gap is that the iShares fund has 33% of its assets in poor-performing European markets. The SPDR fund only has 28% of assets in the troubled region.


A broader infrastructure fund with a decent record is iShares S&P Global Infrastucture (IGF), which has 41% of assets in utilities, 20% in energy, and 37% in industrials. Holdings include Spectra Energy (SE), an operator of gas pipelines, and Dominion Resources (D), a Virginia power producer. Because of the energy and industrial holdings, iShares S&P Global Infrastructure is more volatile than the SPDR competitor. During the past year, the iShares fund lost 7.4%. But industrial stocks provided a boost in the rally that began in 2009. During the past three years, the iShares fund returned 8.2% annually, outdoing the SPDR infrastructure fund.

Stan Luxenberg is a freelance writer specializing in mutual funds and investing. He was executive editor of Individual Investor magazine.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
CHXX $17.75 -2.42%
GII $50.63 0.00%
INXX $12.68 0.00%
JXI $47.54 0.00%
PXR $40.64 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs