A sound investment process and strong management team underpin iShares US Infrastructure ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in quality exposure and volatility exposure compared with category peers. A high quality exposure means holding stocks that are consistently profitable, growing, and have solid balance sheets. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing the passive product drives the strategy's Above Average People Pillar rating. The strategy has a solid parent that earns an Above Average Parent Pillar rating. This firm has had overall low fees and a strong success ratio across its product lineup.

Analyst Rating

Duke Energy

Xcel Energy

Southern Company

PG&E

OGE Energy

WEC Energy Group

Sempra Energy

Fortis

Pinnacle West Capital

DTE Energy

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares US Infrastructure ETF earns a High Process Pillar rating. The leading factor in the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Strong risk-adjusted performance also strengthens the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. The parent firm's five-year risk-adjusted success ratio of 60% supports the rating. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their relatively high success ratio suggests that this firm does well for investors and that this fund may benefit from that.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the NYSE® FactSet U.S. Infrastructure Index (the "underlying index") composed of equities of U.S. companies that have infrastructure exposure and that could benefit from a potential increase in domestic infrastructure activities.  The fund will invest at least 80% of its assets in the component securities of the index and in investments that are substantially identical to the component securities of the index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the index, and but which BFA believes will help the fund track the index. 

 The portfolio is overweight in basic materials by 14.6 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared to category peers are utilities and real estate, underweight the average by 5.6 and 4.1 percentage points of assets, respectively. The portfolio is composed of 160 holdings and its assets are more dispersed than peers in the category. In particular, 7.6% of the fund’s assets are concentrated in the top 10 fund holdings, compared to the category average's 27.9%. And finally, in terms of portfolio turnover, this portfolio's holdings turn over more often than comparable products in its peer group, possibly resulting in higher costs for investors and a drag on performance.

High

Process

iShares US Infrastructure ETF's strong team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. The team is well equipped, with an average of 17 years of portfolio management experience. Together, they manage a total of 258 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate. The team has undergone a bout of turnover recently, with Amy Whitelaw leaving within the last five months. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process. 

 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 US Infrastructure ETF

IFRA tracks an index of US-listed infrastructure companies that derive a significant portion of their revenue from within the US.

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Investors can turn to exchange traded funds to track the expansion of U.S. infrastructure, even if the incoming Joe Biden administration doesn't make good on plans for increased fiscal spending. President-elect Joe Biden promised on the campaign trail to push through a $2 trillion plan to upgrade the country's infrastructure and combat climate change by [.

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According to a poll, Democratic presidential candidate Joe Biden now has a 71% chance of winning the White House.

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Democratic presidential candidate Joe Biden, who has considerable chances of winning, recently released the second part of his Build Back Better plan. The plan, if put into action, should benefit these ETFs.

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Since both Democratic and Republican candidates are vowing for boosting infrastructure spending, it can be concluded that infrastructure ETFs could be gainers no matter who wins in the presidential election 2020.

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The Trump administration is reportedly preparing a nearly $1 trillion infrastructure proposal as part of its efforts to bolster the American economy.

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With infrastructure companies in focus on heightened speculation of a new round of stimulus, this could be a sector to watch.

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News for iShares US Infrastructure ETF ETF (IFRA)