iShares U.S. Digital Infras & RE ETF earns a Morningstar Medalist Rating of Neutral with strength in areas such as People offset by weaker spots such as Process. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy receives a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and an overweight in yield exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Digital Realty Trust

American Tower

Equinix

Crown Castle International

QUALCOMM

Arista Networks

Motorola Solutions

Cisco Systems

SBA Communications

NetApp

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. iShares U.S. Digital Infras & RE ETF earns a Below Average Process Pillar rating. The process is bolstered by the firm's five-year retention rate of 92% over the period. However, the rating is held back by the fund's unremarkable long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the S&P Data Center, Tower REIT and Communications Equipment Index composed of US-listed companies engaged in the owning, operating, developing, or providing of infrastructure for the storage, processing, transmission and/or access of digital data and services.  The underlying index which measures the performance of stocks of U.S.-listed companies, as well as U.S.-listed ADRs of foreign companies from developed markets, involved in the ownership and management of data centers, telecommunication towers, and related equipment, and as determined by S&P Dow Jones Indices LLC. The fund is non-diversified. 

 The portfolio is overweight in real estate by 45.6 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 24.9 and 9.5 percentage points of assets, respectively. The portfolio is positioned across 34 holdings and is relatively top-heavy. Of the strategy's assets, 65.9% are concentrated within the top 10 holdings, as opposed to the category’s 52.4% average.

Below Average

Process

iShares U.S. Digital Infras & RE ETF benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are three managers listed on the fund: Greg Savage, Jennifer Hsui, Paul Whitehead. The team is well equipped, with an average of 18 years of portfolio management experience. Together, they manage a total of 258 strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares U.S. Digital Infrastructure and Real Estate ETF

IDGT tracks an index of 50 US stocks involved in data centers, telecommunication towers, and related equipment. The fund uses a tiered approach in selection and weighting.

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