The fund is up about 6 percent year-to-date, and roughly 4.5 percent annualized during its three-year run.
Likewise, the diversity of infrastructure is shown in the ProShares DJ Brookfield Global Infrastructure ETF (TOLZ), where the category of oil and gas and transportation dominates the portfolio holdings at nearly 33 percent, followed by electricity transmission and distribution (17 percent), master limited partnerships (15 percent) and communications (11 percent). The sub-sectors of toll roads, water, airports and ports all are in the single-digit range. U.S.-listed companies comprise more than 49 percent of the fund’s weighting.
TOLZ has garnered $31 million assets and sports an expense ratio of 0.46 percent. It’s up more than 10 percent year-to-date, and has returned 3 percent on an annualized basis since inception in March 2014. It also offers a yield north of 3 percent.
Most of these infrastructure ETFs have underperformed the broader market during their respective existence, though their outperformance so far this year perhaps can be attributed to reaping the early benefits of the Fixing America's Surface Transportation Act, otherwise known as the FAST Act, a $305 billion, five-year spending law signed by President Obama in December 2015 that aims to tackle a host of infrastructure needs across various sectors in the U.S.
The category's top-performing ETF in 2016 has been the Guggenheim S&P High Income Infrastructure ETF (GHII), which tracks the S&P High Income Infrastructure Index containing the 50 highest-yielding global equity securities in various infrastructure-related industries. The fund has lived up to its name with an SEC yield of 6.4 percent, and is up 21 percent year-to-date. This ETF, which launched in February 2015, charges an expense ratio of 0.45 percent and has only $6 million in assets. The fund’s U.S. weighting is 27 percent.
The bottom line is that between the much-discussed need to repair crumbling infrastructure in the U.S. (and elsewhere in the developed world) and the expanding infrastructure needs of the global economy as a whole, including in the U.S., infrastructure spending likely will be a long-term growth industry. Patient investors with long-term horizons will likely reap the benefits, but just don’t expect boffo returns in the aftermath of Tuesday’s U.S. presidential election—no matter who wins.