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The building and infrastructure sector gained some popularity with investors in 2010 due to the logical thinking that both developed (including the US) and developing nations need to make a wide variety of internal improvements especially in the electric grid, engineering, construction, roads and bridges, dams and many other developments.

There aren't that many pure ETF choices in the sector so having a top 10 list seems rather odd but we'll proceed with this for now given the sector will likely expand in the future. Depending on overall market conditions AUM (Assets under Management) should expand making these listings more impressive and compelling.

Certainly in emerging markets there is much activity planned. Given current economic conditions in the developed world infrastructure projects can be seen as necessary as existing infrastructure requires improvements. Making investments in these projects as international and domestic economic growth slows is generally believed as important and stimulative while others may argue such hasn't been the case. In Japan in the late 1990s infrastructure spending was high on the list of government spending yet the Japanese economy continued to struggle.

When possible we prefer to feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach.


#10: EG Shares China Infrastructure ETF (CHXX)

CHXX follows the INDXX China Infrastructure Index. The index is a free-float market capitalization weighted stock market index comprised of 30 leading companies that INDXX, LLC determines to be representative of China's infrastructure sector. The fund was launched in February 2010. The expense ratio is 0.85%.

AUM equal $10M and average daily trading volume is 18K shares. As of July 2012 the annual dividend yield was 2.54% and YTD return was 6.93%. The one year return was -23.60%.

Data as of June 2012

CHXX Top Ten Holdings & Weightings

  • China Communications Construction Co., Ltd. H Shares (01800): 6.79%
  • Evergrande Real Estate Group Ltd. (OTC:EGRNF): 5.05%
  • Zoomlion Heavy Industry Science and Technology Co., Ltd H Shares (OTCPK:ZLIOF): 4.97%
  • China National Building Material Co., Ltd. H Shares (03323): 4.82%
  • Shimao Property Holdings Ltd. (00813): 4.54%
  • China Oilfield Services Limited H Shares (OTCPK:CHOLF): 4.50%
  • Anhui Conch Cement Company Limited H Shares (00914): 4.32%
  • Jiangxi Copper Company Limited H Shares (00358): 4.27%
  • China Railway Group Limited H Shares (00390): 4.00%
  • CSR Corporation Ltd. H Shares (01766): 3.85%

CHXX

#9: PowerShares Building & Construction ETF (PKB)

PKB follows the dynamic Building & Construction Intellidex Index which is an "enhanced" index designed to provide capital appreciation by evaluating companies based on fundamental growth investment timeliness, valuations and risk factors. The fund was launched in October 2005. The expense ratio is 0.60%.

AUM equal $28M and average trading volume is 7 shares. As of July 2012 the annual dividend yield was 0.19% and YTD return was 16.76%. The one year return was 8.01%.

Data as of June 2012

PKB Top Ten Holdings & Weightings

  • DR Horton Inc (DHI): 5.65%

  • Tractor Supply (TSCO): 5.64%

  • Lowe's Companies Inc. (LOW): 5.60%

  • Home Depot, Inc. (HD): 5.33%

  • Mohawk Industries, Inc. (MHK): 5.19%

  • Jacobs Engineering Group (JEC): 4.49%

  • Vulcan Materials Company (VMC): 4.48%

  • KBR, Inc. (KBR): 4.48%

  • Ryland Group, Inc. (RYL): 3.28%

  • PulteGroup Inc (PHM): 3.06%

PKB

#8: First Trust Global Engineering & Construction ETF (FLM)

FLM follows the ISE Global Engineering and Construction Index which targets companies engaged in large civil and capital projects including utilities, transportation, telecommunications, commercial, residential and infrastructure. The fund was launched in October 2008. The expense ratio is 0.70%.

AUM equal $29.7M and average daily trading volume is 3K shares. As of July 2012 the annual dividend was 2.04% and YTD return was 0.33%. The one year return was -15.41%.

Data as of June 2012

FLM Top Ten Holdings & Weightings

  • Aker Solutions ASA (AKSO): 3.15%

  • KBR, Inc. : 2.95%

  • JGC Corp. (1963): 2.88%

  • Fluor Corporation (FLR): 2.85%

  • Vinci (DG): 2.79%

  • Amec PLC (AMEC): 2.70%

  • Foster Wheeler, Ltd. (FWLT): 2.61%

  • China Communications Construction Co., Ltd. H Shares (01800): 2.57%

  • Jacobs Engineering Group : 2.55%

  • Skanska AB (SKA B): 2.51%

FLM

#7: SPDR GI 100 ETF (GII)

GII follows the Macquarie Global Infrastructure 100 Index which was created by FTSE to include companies in the infrastructure management, ownership of assets there to include utilities. The fund was launched in January 2007. The expense ratio is 0.59%. AUM equal $35M and average daily trading volume is less than 3K shares.

As of early July 2012 the annual dividend yield was 4.21% and YTD return 2.85%. The one year return was 1.08%.

Data as of June 2012

GII Top Ten Holdings & Weightings

  • Southern Co (SO): 3.67%

  • National Grid PLC (OTCPK:NGGTF): 3.29%

  • E.ON Aktiengesellschaft AG (OTCPK:ENAKF): 3.22%

  • GDF Suez (GSZ): 3.08%

  • Exelon Corp (EXC): 2.89%

  • Enbridge, Inc. (ENB): 2.83%

  • Dominion Resources Inc (D): 2.74%

  • Duke Energy Corporation (DUK): 2.71%

  • TransCanada Corporation (TRP): 2.66%

  • NextEra Energy Inc (NEE): 2.54%

GII

#6: EG Shares India Infrastructure ETF (INXX)

INXX follows the INDXX India Infrastructure Index which is includes the leading 30 companies involved construction, engineering and utilities to name a few. The fund was launched in November 2010. The expense ratio is 0.85%. AUM equal $51.2M (which compares poorly with $81 million in July 2011 and mostly from a NAV decline like others) and average daily trading volume is 8K shares.

As of July 2012 the annual dividend yield was 0.65% and YTD return 12.07%. The one year return was -28.08%.

Data as of June 2012

INXX Top Ten Holdings & Weightings

  • Tata Motors, Ltd. (TATAMOTORS): 7.80%

  • Power Grid Corporation Of India Ltd. (POWERGRID): 6.15%

  • Ultra Tech Cement Ltd (ULTRACEMCO): 5.63%

  • Tata Power Co., Ltd. (TATAPOWER): 5.17%

  • Tata Steel Ltd. (TATASTEEL): 5.02%

  • Idea Cellular Ltd. (OTCQB:IDEA): 4.95%

  • ACC Limited (ACC): 4.74%

  • NTPC Ltd. (NTPC): 4.67%

  • Ambuja Cements Ltd. (AMBUJACEM): 4.50%

  • Bharti Airtel Ltd. (BHARTIARTL): 4.29%

INXX

#5: EG Shares Brazil Infrastructure ETF (BRXX)

BRXX follows the INDXX Brazil Infrastructure Index which consists of the 30 leading companies that INDXX, LLC deems to represent the infrastructure sector in Brazil. The fund was launched in February 2010. The expense ratio is 0.85%. AUM equal $71.6M and average daily trading volume is 31K shares.

As of July 2012 the annual dividend yield was 4.72% and YTD return of 2.14%. The one year return was -10.86%.

Data as of June 2012

BRXX Top Ten Holdings & Weightings

  • Ultrapar Holdings Inc (UGPA3): 6.31%

  • Basic Sanitation Company of the State of Sao Paulo (SBSP3): 5.83%

  • CCR SA (CCRO3): 5.76%

  • Embraer S.A. (EMBR3): 5.54%

  • CESP - Cia Energetica de Sao Paulo Pfd Shs -B- (CESP6): 5.25%

  • CPFL Energy SA (CPFE3): 5.09%

  • BR Malls Participacoes S.A. (BRML3): 4.95%

  • Tractebel Energia S.A. (TBLE3): 4.86%

  • Gerdau SA (GGBR3): 4.64%

  • Weg SA (WEGE3): 4.05%

(click to enlarge)BRXX

#4: iShares Emerging Markets Infrastructure ETF (EMIF)

EMIF follows the S&P Emerging Markets Infrastructure Index. The fund was launched in June 2009. The expense ratio is 0.75%. AUM equal $117M and average daily trading volume is 12K shares. As of July 2012 the annual dividend yield was 2.65% and YTD return 13.38%. The one year return was -2.46%.

Data as of June 2012

EMIF Top Ten Holdings

  • Ultrapar Holdings Inc ADR (UGP): 11.37%

  • CCR SA (CCRO3): 9.74%

  • Energy Company of Minas Gerais ADR (CIG): 7.31%

  • China Merchants Holdings (International) Co., Ltd. (00144): 7.23%

  • CEZ AS (CEZ): 4.24%

  • Cosco Pacific Ltd. (OTCPK:CSPKF): 4.05%

  • Grupo Aeroportuario del Sureste, S.A.B. de C.V. ADR (ASR): 3.84%

  • National Electricity Company of Chile, Inc. ADR (EOC): 3.71%

  • Korea Electric Power Corp ADR (KEP): 3.66%

  • Tenaga Nasional Berhad (5347): 3.35%

(click to enlarge)EMIF

#3: PowerShares Emerging Markets Infrastructure ETF (PXR)

PXR follows the S-Network Emerging Infrastructure Builders Index which includes construction and engineering, machinery, materials, heavy electrical equipment, mining and industrial machinery and steel. The fund was launched in October 2008. The expense ratio is 0.75%. AUM equal $96M and average daily trading volume is 13K shares.

As of July 2012 the annual dividend yield was 1.98% and YTD return 1.15%. The one year return was -27.11%.

Data as of June 2012

PXR Top Ten Holdings

  • Vale SA ADR (VALE): 3.14%

  • Caterpillar Inc (CAT): 3.09%

  • ABB, Ltd. (ABBN): 3.02%

  • Anhui Conch Cement Company Limited H Shares (00914): 3.00%

  • Murray And Roberts Holdings Limited (MUR): 2.84%

  • Atlas Copco AB (ATCO A): 2.78%

  • Semen Gresik (Persero) Tbk (SMGR): 2.65%

  • Taiwan Cement Corp. (1101): 2.57%

  • MMC Norilsk Nickel JSC ADR (OTCPK:NILSY): 2.51%

  • Indocement Tunggal Prakarsa Tbk (OTCPK:INTP): 2.44%

PXR

#2: UBS E-Tracs Alerian Infrastructure MLP (MLPI)

MLPI follows the index of the same name. It is designed to give investors exposure to the infrastructure component of the Master Limited Partnership asset class. Constituents each earn at least 50% of EBITDA from assets that are not directly exposed to changes in commodity prices. The index is disseminated by the New York Stock Exchange and is a composite of 25 energy infrastructure MLPs. The fund was launched in March 2010. The expense ratio is 0.85%. AUM equal $266M and average daily trading volume is 51K shares.

As of July 2012 the annual dividend yield was 5.02% and YTD return was 2.06%. The one year return was 13.51%.

MLPI

#1: iShares Global Infrastructure ETF (IGF)

IGF follows the S&P Global Infrastructure Index. The fund was launched in December 2007. The expense ratio is .48%. AUM equal $428M and average daily trading volume is 56K shares.

As of July 2012 the annual dividend yield was 4.52% and YTD return 4.72%. The one year return was -0.21%.

Data as of June 2012

IGF Top Ten Holdings & Weightings

  • Enbridge, Inc. : 4.55%

  • TransCanada Corporation : 4.24%

  • Kinder Morgan, Inc. (KMI): 3.84%

  • Southern Co : 3.31%

  • E.ON Aktiengesellschaft AG (OTCPK:ENAKF): 3.04%

  • Abertis Infraestructuras SA (ABE): 2.98%

  • National Grid PLC (OTCPK:NGGTF): 2.96%

  • Hutchison Port Hl: 2.94%

  • Spectra Energy Corp (SE): 2.77%

IGF


We rank the top 10 ETF by our proprietary stars system as outlined below. However, given that we're sorting these by both short and intermediate issues we have split the rankings as we move from one classification to another.


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

The infrastructure sector has been negatively affected by fears over a global slowdown which hurts the sector in the short-term. Longer-term one favorite way for government authorities to stimulate better economic growth is through higher spending in this category. This has yet to materialize and of course there are pundits who believe this activity is ineffective. Nevertheless it takes time for spending to kick-in and projects to be started given red tape and other issues.

It's also important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs. New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned.


The ETF Digest has no current positions in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers.)

Source: Top 10 Global Building & Infrastructure ETFs