Global Infrastructure ETF

In ETF Blog, Latest by Simon Brown

One of the responses to the pandemic from governments the world over has been infrastructure spending. This boosts job creation and economic activity with the added bonus that the country gets upgraded or even new infrastructure.

But even when we’re not all locked down under a pandemic infrastructure is important and now we have a new Exchange Traded Fund (ETF) listing from Satrix which includes railway companies, energy and even a cell tower REIT in the top ten holdings.

Infrastructure as an investment is generally less volatile as they own and/or operate actual infrastructure assets while dividends payments are also generally higher than normal equity investments.

Details

  • Listing date: 9 September
  • JSE Code: STXIFR
  • Underlying index: FTSE Global Core Infrastructure Index
  • Target TER: 0.8%
  • Tax-free investing: Allowed
  • Dividends: Quarterly

This is a global ETF with the US making up 63.5% of the companies with Canada 12% and Japan at 4.5% rounding out the top three countries. The top sector is utilities at 51.3% with industrials at 25.4% and energy at 10.7%. Real estate, communications, IT and financials are also some sectors included in the index.

Constituents are selected from the FTSE Global All Cap Index using FTSE Russell’s definition of infrastructure. To be included in the index, companies must derive a minimum of 65% of their revenue from FTSE Russell-defined core infrastructure activities.

Top holdings and weightings;

  • Nextera Energy Inc (6.27%) ~ An American energy company with about 58 GW of generating capacity
  • Union Pacific Corp (5.84%) ~ A freight-hauling railroad that operates 8,300 locomotives over 32,200 miles routes in 23 U.S. states
  • American Tower REIT Corp (4.86%) ~ A real estate investment trust and an owner and operator of wireless and broadcast communications infrastructure in several countries worldwide
  • Crown Castle International REIT Co (3.21%) ~ A real estate investment trust and provider of shared communications infrastructure in the US
  • Duke Energy Corp (3.2%) ~ An American electric power and natural gas holding company
  • Enbridge Inc (3.16%) ~ A multinational pipeline company
  • CSX Corp (2.99%) ~ A holding company focused on rail transportation and real estate in North America
  • Southern (2.69%) ~ An American gas and electric utility holding company
  • Norfolk Southern Corp (2.57%) ~ Mostly railway transportation
  • Canadian National Railway (2.48%) ~ A Canadian Class I freight railway

This is the 22nd local ETF from Satrix and the 85th ETF listed on the JSE.


I spoke with Satrix CIO Kingsley Williams last week about infrastructure as an asset class, the interview is below and Kingsley starts at 14:15.



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