Global X US Infrastructure Dev ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average 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 this passive strategy earns a Low People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Eaton

Martin Marietta Materials

Trane Technologies plc

Parker-Hannifin

Emerson Electric

Nucor

United Rentals

Quanta Services

Vulcan Materials

Deere & Company

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. Global X US Infrastructure Dev ETF earns an Above Average Process Pillar rating. The main driver of the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category average, which suggests that the process was successful over that period. This fund tracks an index, which also increases its process rating. Historical data, such as Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 28%. 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. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that correspond generally to the price and yield performance, of the Indxx U.S. Infrastructure Development Index.  The fund invests at least 80% of its total assets in the securities of the underlying index. The underlying index is designed to measure the performance of U.S. listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, and composites and products; industrial transportation; and producers/distributors of heavy construction equipment. 

 The portfolio is overweight in industrials and basic materials relative to the category average by 33.5 and 17.1 percentage points, respectively. The sectors with low exposure compared to category peers are utilities and energy, underweight the average by 40.5 and 7.1 percentage points of assets, respectively. The strategy owns 100 securities and invests 30.4% of assets in its top 10 holdings, similar to the category average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 6% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Global X’s team receives a Low People Pillar rating. The number one detractor from the rating is the parent firm's five-year success ratio of 30%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 67% also limits the team. The experience of the management team, which averages four years at this fund, limits the team as well.

People

Mirae Asset Global Investments is a Korean asset manager and a key player in the Asian financial market. It is a wholly owned subsidiary of Mirae Asset Financial Group, founded by Hyeon Joo Park. Park’s leadership and entrepreneurial spirit have been the driving force behind the global rise of Mirae, and he holds a majority stake in the business. 
Mirae Asset has grown significantly over the years (USD 198 billion as of December 2022) across a diversified platform, of which about 60% of assets are managed in South Korea. We believe that Mirae’s core mutual fund business in the Asia-Pac region is relatively strong. It has a collaborative structure, a strong and large investment team, low manager turnover, competitive fees, and a disciplined approach to product-development pointing toward better stewardship practices relative to peers in these markets. However, this is in stark contrast to its exchange-traded fund business, which accounts for 41% of the total assets. 
The firm’s ETF lineup focuses largely on high-risk thematic strategies that seem gimmicky, emphasizing short-term asset-gathering. The firm appears to leverage trending topics such as robotics and artificial intelligence, virtual reality and gaming, and cloud computing. There’s a notable concern regarding the potential liquidation of these funds since they seem to be designed around investment fads. Furthermore, these products are often expensive, especially compared with broadly diversified index funds and ETFs. Unsurprisingly, Mirae's reflexive product-development strategy has led to an increase in fund closures.
Our experience engaging with the MAGI team to gather critical information for the parent assessment has not been as positive. It hasn’t been as transparent in its disclosures, and unlike its peers, its responsiveness has been inadequate. We prefer firms with a more transparent corporate culture. Overall, these actions hold us back, and the firm retains its Parent Pillar rating of Average.

Average

Parent

Global X U.S. Infrastructure Development ETF

PAVE tracks a market-cap-weighted index of US-listed companies that derive the majority of their revenue from or have a stated business purpose related to infrastructure development.

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VanEck Inflation Allocation ETF

Vanguard Short-Term Inflation-Protected Securities ETF

Energy Select Sector SPDR Fund

Concerns about inflation are top of mind again, with consumer prices and producer prices rising higher last week. This impacted the bond market as well as commodity prices.

Renewed Focus on Inflation

Oppenheimer predicts a 5% increase in the S&P 500 by the end of the year. Infrastructure stocks, such as the Global X U.S. Infrastructure Development ETF, present a buying opportunity. Several Texas-based companies, including Sterling Infrastructure and Powell Industries, have seen significant stock price increases due to infrastructure investments.

PAVE: Infrastructure Stocks Pave The Way To New Market Highs

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iShares Emerging Markets Infrastructure ETF

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iShares US Infrastructure ETF

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iShares Robotics & Artificial Intelligence Multisector ETF

Subversive Cannabis ETF

Amplify Alternative Harvest ETF

Amplify US Alternative Harvest ETF

FlexShares STOXX Global Broad Infrastructure Index Fund

First Trust Alerian US NextGen

Vaneck Green Infrastructure ETF

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Robo Global Artificial Intelligence ETF

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ProShares DJ Brookfield Global Infrastructure ETF

Themes Generative Artificial Intelligence ETF

Wisdomtree Artificial Intelligence And Innovation Fund

Pure Cannabis ETF

ARK 21Shares Bitcoin ETF

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2x Bitcoin Strategy ETF

Valkyrie Bitcoin Fund

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iShares Bitcoin Trust

As the first quarter comes to a close, clearly, there have been some thematic winners in terms of flows and investment performance. Artificial Intelligence AI-themed ETFs remain among the top recipients of investor flows this year.

ETF Themes That Dominated in Q1 2023

Looking for broad exposure to the Utilities - Infrastructure segment of the equity market? You should consider the Global X U.S. Infrastructure Development ETF (PAVE), a passively managed exchange traded fund launched on 03/06/2017.

Should You Invest in the Global X U.S. Infrastructure Development ETF (PAVE)?

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Vanguard's top growth fund has top positions in today's market leaders. VanEck Semiconductor ETF is a great way to gain AI exposure with a lower degree of risk.

3 Red-Hot ETFs That Show No Signs of Cooling Off

Global X U.S. Infrastructure Development ETF is recommended as a buy due to its strong performance and potential for solid returns.

PAVE: This Infrastructure ETF Is Built For Growth Looking Forward

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MSUS

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To close out the year, I thought it would be interesting to see which thematic categories experienced the most inflows in 2023, demonstrating proverbially “where the puck was going.” This data, sourced from Bloomberg and VettaFi's internal data, is interesting because it does not necessarily align with performance.

Disruptive Tech Theme of the Week: Top Thematic ETF Flows 2023

Pacer Data And Digital Revolution ETF

Vanguard Small-Cap ETF

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Last week, the S&P 500 marked the six-week winning streak. Improved consumer sentiment and upbeat jobs data led to this gain.

Play 5 Top-Ranked ETFs for This Week

Goldman Sachs forecasts global GDP growth of +2.6% in 2024, with US GDP growth just above 2%. The Global X U.S. Infrastructure Development ETF is recommended as a buy, with a healthy valuation and dividend growth. PAVE is focused on the Industrials sector and has a diversified portfolio, but timing entry in February or March 2024 may be more favorable.

PAVE: Expecting Further Infrastructure Strength Heading Into 2024

Lower growth with weighted EPS CAGR of 4% on consensus YE24-YE25 estimates. Expensive relative to growth, with an estimated YE24 PE of 14.7x driving a PEG of 3.4x. Steel stocks and DE (presumably referring to John Deere) are the main drag on the portfolio.

PAVE: Portfolio Composition May Drive Underperformance

Global X U.S. Infrastructure Development ETF is a passively managed exchange-traded fund that provides exposure to the Utilities - Infrastructure segment of the equity market. The PAVE ETF focuses on companies involved in the development of U.S. infrastructure and has showcased impressive performance since its inception. The Infrastructure Investment and Jobs Act of 2021 and other legislative initiatives create potential investment opportunities for PAVE in the infrastructure sector.

PAVE: A Great Long-Term Theme, But Poor Timing Now

VanEck Vectors Pharmaceutical ETF

SPDR S&P Health Care Services ETF

SPDR S&P Pharmaceuticals ETF

Value-focused investing comes to rescue if high-growth sectors fail for some reasons.

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PAVE has significantly outperformed the S&P 500 these past few years. Fundamentals have worsened, and fund performance might follow suit. A look at some recent negative developments for PAVE follows.

Is PAVE's Outperformance Set To Continue?

Avantis International Equity ETF

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Global X S&P 500 Covered Call ETF

In this week's edition of the ETF Issuer League, firms across multiple ETF AUM tiers have reason to celebrate. Shops including Avantis, Dimensional, Mirae's Global X suite, and boutique Summit Investments all hit strong weekly inflows for their sizes.

ETF Issuer League: Avantis, GlobalX, Summit Up

Industrials- and Materials-sector stocks tend to perform well once the economy revs up following a contraction. While it might be early to own something like PAVE, its low valuation and positive momentum are appealing.

PAVE: Strong Price Action, Attractive Valuation Make It A Buy

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A few ETFs surged to new highs. We have highlighted five of them targeting a specific sector or industry that is hovering at a one-year high.

5 Sector ETFs Hitting 52-Week High

The PAVE ETF is up ~12% and outperformed the S&P 500 by ~11% since my buy-rated article of last April. However, and despite the high inflation and higher interest rate headwinds, this ETF has much farther to run because the infrastructure investment story is just getting started.

The PAVE ETF: Infrastructure Investment Thesis Still Fully Intact

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When it comes to "thematics," past performance doesn't always matter.

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Higher inflation impacts infrastructure in two ways: higher interest rates and higher revenues. The impact of higher interest comes first and is visible in the weak performance.

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Investors should note that sales are harder to be influenced in an income statement than earnings.

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Why the infrastructure sector has shown resiliency even during times of market volatility. The case for alternative investments to help diversify your portfolio.

Infrastructure: Diversification Through Alternative Investments

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While most of the talk in the capital markets is centering on inflation, infrastructure projects are still moving forward despite an increase in material costs. As such, infrastructure-focused exchange-traded funds (ETFs) are worth considering as the White House releases funds from the Infrastructure Investment and Jobs Act passed a year ago.

White House Releases $185 Billion for Infrastructure: An ETF to Ponder

PAVE invests in infrastructure development companies. These companies are cheap, seeing strong growth, and have outperformed for months.

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Two domestic infrastructure funds offer differing views on energy-related spending.

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These sectors are likely to log strong revenue growth in the second quarter. So, try these ETFs.

5 Sector ETFs to Tap for Revenue Growth Potential

News for Global X U.S. Infrastructure Development ETF ETF (PAVE)