FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) seeks to track the STOXX Global Broad Infrastructure Index, which measures the performance of global companies that derive at least 50% of revenue from infrastructure-related activities including utilities, transportation, energy storage, and telecommunications across developed and emerging markets.
How It Works
NFRA uses a passively managed, free-float market-capitalization-weighted approach that replicates its benchmark index. The fund holds infrastructure companies globally, with positions weighted by their market value and revenue exposure to infrastructure activities. Rebalancing occurs semi-annually to maintain index alignment and sector allocations. Holdings typically include electric utilities, railroads, pipelines, airports, and telecommunications infrastructure companies from both developed and emerging markets worldwide.
Key Features
- Provides pure-play global infrastructure exposure through companies deriving majority revenue from infrastructure operations rather than broad utility sectors
- Offers geographic diversification across developed and emerging markets for comprehensive infrastructure investment coverage globally
- Features 2.87% dividend yield reflecting infrastructure companies' typically stable cash flows and income-focused business models
Risks
- This ETF can lose value when interest rates rise significantly, as infrastructure companies' high debt levels make them sensitive to borrowing costs
- Currency fluctuations can reduce returns since the fund holds international positions, with emerging market holdings adding additional volatility risk
- Regulatory changes affecting utilities and infrastructure sectors globally could impact company profitability and reduce fund performance substantially
Who Should Own This
Best suited as a satellite holding (5-15% of portfolio) for income-focused investors with 3+ year time horizons seeking inflation protection and global infrastructure exposure. Medium risk tolerance required due to interest rate sensitivity and international exposure. Works well for investors wanting infrastructure diversification beyond domestic REITs and utilities.