As the world economy still wrangles with the lasting inflationary pressures of 2022, many investors remain on the hunt for assets that can safeguard their portfolios from the erosion of purchasing power. For some, global infrastructure ETFs have emerged as an attractive option for inflation protection.
The primary goal of these infrastructure ETFs is to hold the stocks of companies that provide essential services and facilities across various countries. Often, this means companies involved in the construction, maintenance, and operation of critical infrastructure, including transportation networks, utilities, pipelines, and telecommunication systems, which are indispensable to modern societies.
The demand for these services generally remains stable, even during economic turbulence, providing a level of resilience against inflation. Furthermore, revenues generated by global infrastructure assets are often linked to inflation, ensuring that investors receive returns that keep up with rising costs.
Identifying prospective ETFs as a Canadian investor can be made easy via the Cboe ETF screener and selecting "Global Infrastructure" under the "Themes" filter. Here's a brief overview of the top five Canadian-listed global infrastructure ETFs sorted by ascending assets under management, or AUM.
TD (TSX:TD) Active Global Infrastructure Equity ETF (TSX:TINF) (TINF)
Investors who don't mind actively managed ETFs can consider TINF. This ETF invests in six categories of infrastructure assets: transportation, power generation, renewable energy, pipelines, utilities, telecommunications, and social infrastructure. TINF uses a bottom-up security selection process to identify holdings with above-average growth potential based on revenues, earnings, and cashflows.
Unique to TINF is the ability of the ETF to not just hold common stock, but also equity-like securities such as equity-linked notes, convertible securities, and preferred shares for a total of 58 current holdings. The ETF is benchmarked to the total return of the S&P Global Infrastructure Index. Currently, TINF charges a 0.70% expense ratio and has attracted just over $110 million in AUM.
AGF Systematic Global Infrastructure ETF (NLB:QIF) (QIF)
QIF sits somewhere between passive indexing and true active management with its factor-driven investment strategy. This Cboe Canada-listed ETF employs a systematic quantitative-based multi-factor model to screen and select a portfolio of global infrastructure equities, with the goal of minimizing volatility while providing a high level of current income.
Right now, QIF is sitting at just over $250 million in AUM with a 0.45% expense ratio. The majority of this ETF’s portfolio is comprised of equities from the utility, industrials, and energy sectors at 40%, 22%, and 21% respectively, which is not atypical of infrastructure ETFs. Around 45% of the ETF is held in U.S. stocks, with Canada coming in second at 12%.
CI Global Infrastructure Private Pool - ETF (TSX:CINF)(CINF)
Investors seeking more consistent and above-average levels of income from a global infrastructure ETF might like CINF. This ETF pays monthly distributions, and currently possesses a trailing twelve-month yield of 3.47%. Since its inception in May 2020, CINF has attracted around $305 million in AUM and clocks in with an expense ratio of 0.90%.
CINF is the ETF shares series of CI’s Global Infrastructure Private Pool. Private pools are a special type of investment fund designed for high-net-worth and sophisticated investors. They typically have more flexible investment mandates, allowing fund managers greater discretionary freedom to pursue specific investment strategies that are more complex or less constrained by regulatory requirements
.iShares Global Infrastructure Index ETF (TSX:CIF)(CIF)
The second-largest global infrastructure ETF listed in Canada is CIF, which currently sports around $333 million in AUM. This ETF is passively managed, tracking the 60 holdings comprising the Manulife (TSX:MFC) Investment Management Global Infrastructure Index. Currently, the ETF makes quarterly distributions, with a trailing twelve-month yield of 2.77%.
Like most of the preceding ETFs, CIF’s largest geographical representation is in the U.S. at 45%, followed by Canada at 39%. Utility sector equities comprise a large part of this ETF at 52% of its total holdings. Despite its passive indexing strategy, CIF is still priced fairly high with a 0.73% expense ratio which is consistent with the previously mentioned actively managed and factor ETFs.
BMO (TSX:BMO) Global Infrastructure Index ETF (TSX:ZGI) (ZGI)
Last on this list is ZGI, which is currently the most popular Canadian-listed global infrastructure ETF at around $590 million in AUM. This ETF is passively managed, tracking the Dow Jones Brookfield Global Infrastructure North American Listed Index. Only companies with over 70% of their cash flows derived from the development, ownership, lease, concession or management of infrastructure assets are eligible.
Unlike the previous ETFs, ZGI includes a substantial allocation to REITs with telecoms, utility, and energy sector exposure at 19%. Otherwise, the largest holdings in this ETF are energy sector pipelines and utility sector electric companies at 35% and 33% respectively. In addition, ZGI also holds a strong U.S. bias at 73% of its portfolio, with Canada coming in at around 19%. The ETF charges a 0.61% expense ratio.
This content was originally published by our partners at the Canadian ETF Marketplace.