Top 10 Global Building and Infrastructure ETFs

 

 

The building and infrastructure sector gained some popularity with investors in 2010 due to the logical thinking that both developed (including the US) and developing nations need to improve various internal improvements. In the U.S. this includes engineering, construction, roads and bridges, dams and many other developments.

There aren't that many ETF choices in the sector so having a top 10 list seems rather odd but this is our methodology and the sector needs coverage.

Certainly in emerging markets there is much activity planned. Given current economic conditions in the developed world infrastructure projects can be seen as necessary as existing infrastructure requires modernization. Making investments in these projects as international and domestic economic growth slows is generally believed as important and stimulative.

We rank the list of ETFs by our proprietary stars system as outlined below.


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

When possible we prefer to feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

When monthly data is insufficient for technical analysis we shift our views to weekly or even daily chart views to gain a possible technical view.

#1: iShares Global Infrastructure ETF (IGF)

IGF follows the S&P Global Infrastructure Index. The fund was launched in December 2007. The expense ratio is .48%. AUM equal $414 million and average daily trading volume is less than 75K shares. As of mid-January 2012 the annual dividend yield was 4.37% and YTD return -.30%. The trailing 12 month return was -2.59%.

Data as of First Quarter 2012

IGF Top Ten Holdings & Weightings
  1. Transurban Group (TCL): 5.25%
  2. TransCanada Corporation (TRP): 4.70%
  3. Enbridge, Inc. (ENB): 4.39%
  4. Abertis Infraestructuras SA (ABE): 3.63%
  5. Atlantia (ATL): 3.40%
  6. E.ON Aktiengesellschaft (EOAN): 3.30%
  7. El Paso Corporation (EP): 3.29%
  8. Spectra Energy Corp (SE): 3.08%
  9. Williams Companies Inc (WMB): 3.07%
  10. GDF Suez (GSZ): 2.98%

#2: UBS E-Tracs Alerian Infrastructure MLP (MLPI)

MLPI follows the index of the same name. It is designed to give investors exposure to the infrastructure component of the Master Limited Partnership asset class. Constituents each earn at least 50% of EBITDA from assets that are not directly exposed to changes in commodity prices. The index is disseminated by the New York Stock Exchange and is a composite of 25 energy infrastructure MLPs. The fund was launched in March 2010. The expense ratio is .85%. AUM equal $215 million and average daily trading volume is 48K shares. As of mid-January 2012 the annual dividend yield was 4.90% and YTD return was -.87%. The trailing 12 month return was 12.75%.

 

 

#3: PowerShares Emerging Markets Infrastructure ETF (PXR)

 

PXR follows the S-Network Emerging Infrastructure Builders Index which includes construction and engineering, machinery, materials, heavy electrical equipment, mining and industrial machinery and steel. The fund was launched in October 2008. The expense ratio is .75%. AUM equal $117 million and average daily trading volume is 25K shares. As of mid-January 2012 the annual dividend yield was 1.75% and YTD return 5.14%. The trailing 12 month return was -27%

Data as of First Quarter 2012

PXR Top Ten Holdings& Weightings
  1. Caterpillar Inc (CAT): 3.69%
  2. ABB, Ltd. (ABBN): 3.27%
  3. Anhui Conch Cement Company Limited (00914): 3.12%
  4. Vale S.A. ADR (VALE): 2.77%
  5. Dongfang Electric Corporation Limited (01072): 2.71%
  6. Atlas Copco (ATCO A): 2.60%
  7. Taiwan Cement Corp. (1101): 2.56%
  8. Jiangxi Copper Company Limited (00358): 2.42%
  9. Dialog Group Berhad: 2.37%
  10. MMC Norilsk Nickel ADR (NILSY): 2.37%

 

 

#4: iShares Emerging Markets Infrastructure ETF (EMIF)

 

EMIF follows the S&P Emerging Markets Infrastructure Index. The fund was launched in June 2009. The expense ratio is .75%. AUM equal $105 million and average daily trading volume is less than 22K shares. As of mid-January 2012 the annual dividend yield was 3.15% and YTD return 4.50%. The trailing 12 month return was -10.89%.

Data as of First Quarter 2012

EMIF Top Ten Holdings & Weightings
  1. Ultrapar Holdings Inc ADR (UGP): 12.99%
  2. Energy Company of Minas Gerais ADR (CIG): 8.22%
  3. China Merchants Holdings (International) Co., Ltd. (00144): 7.27%
  4. Cez A.S., Praha: 5.87%
  5. CPFL Energy SA ADR (CPL): 5.80%
  6. China Oilfield Services Limited (02883): 5.27%
  7. Cosco Pacific Ltd. (01199): 4.55%
  8. Korea Electric Power Corp ADR (KEP): 4.19%
  9. iShares MSCI Malaysia Index: 4.07%
  10. National Electricity Company of Chile, Inc. ADR (EOC): 4.00%

 

#5: EG Shares Brazil Infrastructure ETF (BRXX)

BRXX follows the INDXX Brazil Infrastructure Index which consists of the 30 leading companies that INDXX, LLC deems to represent the infrastructure sector in Brazil. The fund was launched in February 2010. The expense ratio is .85%. AUM equal $70 million and average daily trading volume is less than 23K shares. As of mid-January 2012 the annual dividend yield was 4.50% and YTD return of 4.92%. The trailing 12 month return was -9.35%.

Data as of First Quarter 2012

BRXX Top Ten Holdings & Weightings
  1. CPFL Energy SA (CPFE3): 5.99%
  2. CESP - Cia Energetica de Sao Paulo Pfd Shs -B- (CESP6): 5.85%
  3. Ultrapar Holdings Inc (UGPA3): 5.62%
  4. CCR SA (CCRO3): 5.44%
  5. Telefonica Brasil Pfd: 5.16%
  6. Embraer S.A. (EMBR3): 4.83%
  7. Basic Sanitation Company of the State of Sao Paulo (SBSP3): 4.62%
  8. Tractebel Energia S.A. (TBLE3): 4.56%
  9. Gerdau SA (GGBR3): 4.39%
  10. All America Latina Logistica SA (ALLL3): 4.33%

#6: EG Shares India Infrastructure ETF (INXX)

 

INXX follows the INDXX India Infrastructure Index which is includes the leading 30 companies involved construction, engineering and utilities to name a few. The fund was launched in November 2010. The expense ratio is .85%. AUM equal $53 million (which compares poorly with $81 million in July and mostly from a NAV decline like others) and average daily trading volume is less than 15K shares. As of mid-January 2012 the annual dividend yield was .63% and YTD return 9.8%. The one year return was -33.29%.

Data as of First Quarter 2012

INXX Top Ten Holdings & Weightings
  1. Tata Motors, Ltd. (TATAMOTORS): 6.23%
  2. Power Grid Corporation Of India Ltd. (POWERGRID): 6.02%
  3. Idea Cellular Ltd. (IDEA): 5.42%
  4. NTPC Ltd. (NTPC): 5.31%
  5. GAIL India Ltd. (GAIL): 5.28%
  6. Tata Power Co., Ltd. (TATAPOWER): 5.09%
  7. Bharti Airtel Ltd. (BHARTIARTL): 5.03%
  8. ACC Limited (ACC): 4.96%
  9. Ambuja Cements Ltd. (AMBUJACEM): 4.86%
  10. Ultra Tech Cement Ltd (ULTRACEMCO): 4.76%

 

#7: SPDR GI 100 ETF (GII)

GII follows the Macquarie Global Infrastructure 100 Index which was created by FTSE to include companies in the infrastructure management, ownership of assets there to include utilities. The fund was launched in January 2007. The expense ratio is .59%. AUM equal $35 million and average daily trading volume is less than 5K shares. As of mid-January 2012 the annual dividend yield was 4.66% and YTD return -2.3%. The twelve month return was -2.91%.

Data as of First Quarter 2012

GII Top Ten Holdings & Weightings
  1. GDF Suez (GSZ): 4.10%
  2. E.ON Aktiengesellschaft (EOAN): 3.65%
  3. Southern Co (SO): 3.52%
  4. National Grid PLC (NG.): 3.06%
  5. TransCanada Corporation (TRP): 2.69%
  6. Dominion Resources Inc (D): 2.68%
  7. Duke Energy Corporation (DUK): 2.59%
  8. Enbridge, Inc. (ENB): 2.56%
  9. Exelon Corp (EXC): 2.54%
  10. Enel Societa Per Azioni (ENEL): 2.53%

 

 

#8: First Trust Global Engineering & Construction ETF (FLM)

FLM (First Trust Global Engineering & Construction ETF) follows the ISE Global Engineering and Construction Index which targets companies engaged in large civil and capital projects including utilities, transportation, telecommunications, commercial, residential and infrastructure. The fund was launched in October 2008. The expense ratio is .70%. AUM equal $26 million and average daily trading volume is less than 5K shares. As of mid January 2012 the annual dividend was 1.8% and YTD return was 4.14%. The one year return was -16.3%.

Data as of First Quarter 2012

FLM Top Ten Holdings & Weightings
  1. Chicago Bridge & Iron Company (CBI): 3.10%
  2. Jacobs Engineering Group (JEC): 3.05%
  3. Quanta Services, Inc. (PWR): 2.95%
  4. Fluor Corporation (FLR): 2.86%
  5. JGC Corp. (1963): 2.84%
  6. Leighton Holdings Limited (LEI): 2.74%
  7. Skanska AB (SKA B): 2.54%
  8. KBR, Inc. (KBR): 2.45%
  9. Vinci (DG): 2.44%
  10. Kajima (1812): 2.37%

#9: PowerShares Building & Construction ETF (PKB)

 

PKB (PowerShares Building & Construction ETF) follows the dynamic Building & Construction Intellidex Index which is an "enhanced" index designed to provide capital appreciation by evaluating companies based on fundamental growth investment timeliness, valuations and risk factors. The fund was launched in October 2005. The expense ratio is .60%. AUM equal $27 million and average trading volume is 12K shares. As of mid-January 2012 the annual dividend yield was .25% and YTD return was 6.34%. The twelve month return was -5.23%.

Data as of First Quarter 2012

PKB Top Ten Holdings & Weightings

  1. KBR, Inc. (KBR): 5.16%
  2. Fluor Corporation (FLR): 4.95%
  3. Vulcan Materials Company (VMC): 4.92%
  4. Martin Marietta Materials (MLM): 4.88%
  5. Home Depot, Inc. (HD): 4.80%
  6. NVR, Inc. (NVR): 4.77%
  7. Tractor Supply (TSCO): 4.77%
  8. Lowe's Companies Inc. (LOW): 4.73%
  9. The Manitowoc Co Inc (MTW): 3.04%
  10. Louisiana-Pacific Corp. (LPX): 3.03%

#10: Global X China Infrastructure ETF (CHXX)

CHXX follows the INDXX China Infrastructure Index. The index is a free-float market capitalization weighted stock market index comprised of 30 leading companies that INDXX, LLC determines to be representative of China's infrastructure sector. The fund was launched in February 2010. The expense ratio is .85%. AUM equal $13 million and average daily trading volume is less than 8K shares. As of mid-January 2012 the annual dividend yield was 2.59% and YTD return was 3.23%. The twelve month return was a sharp -27.80%.

Data as of First Quarter 2012

CHXX Top Ten Holdings & Weightings
  1. China Communications Construction Co., Ltd. (01800): 5.79%
  2. China Unicom (Hong Kong) Ltd (00762): 5.75%
  3. China Oilfield Services Limited (02883): 5.19%
  4. China National Building Material Co., Ltd. (03323): 5.11%
  5. China Telecom Corp Ltd (00728): 5.05%
  6. Anhui Conch Cement Company Limited (00914): 4.97%
  7. Jiangxi Copper Company Limited (00358): 4.81%
  8. Evergrande Real Estate Group Ltd. (EGRNF): 4.54%
  9. Zoomlion Hvy Ind S: 3.73%
  10. China Longyuan Power Group Corp Ltd. (CLPXF): 3.46%

 

 

The infrastructure sector has been negatively affected by fears over a global slowdown which is negative for the sector in the short-term. Longer-term one favorite way for government authorities to stimulate better economic growth is through higher spending in this category. This has yet to materialize and of course there are pundits who believe this activity is ineffective. Nevertheless it takes time for spending to kick-in and projects to be started given red tape and other issues.

It's also important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs. New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest . Follow us on Twitter and Facebook as well and join our group conversations.

You may address any feedback to: feedback@etfdigest.com   

The ETF Digest has no current positions in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers)

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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