Market Overview

iShares Launches Commodities, Infrastructure ETFs

iShares Launches Commodities, Infrastructure ETFs

BlackRock, Inc. (NYSE: BLK)'s, iShares unit, the world's largest issuer of exchange traded funds, added to its expansive lineup last week with the addition of two new funds.

Those new ETFs are the iShares U.S. Infrastructure ETF (CBOE: IFRA) and the iShares Bloomberg Roll Select Commodity Strategy ETF (NYSE: CMDY).

“The iShares U.S. Infrastructure ETF seeks to track the investment results of an index composed of equities of U.S. companies that have infrastructure exposure and that could benefit from a potential increase in domestic infrastructure activities,” according to iShares.

Inside The Infrastructure ETF

IFRA follows the NYSE FactSet U.S. Infrastructure Index and holds 161 stocks. That new ETF offers potential as an income and yield play, as it devotes more than 41 percent of its weight to the utilities sector. The industrials and materials sectors combine for about half of IFRA's roster.

IFRA components “fall under one of the 95 infrastructure-related industries defined by FactSet Revere Business Industry Classification System. Each company is classified as either Category 1 or Category 2, where Category 1 companies are infrastructure enablers and Category 2 are infrastructure asset owners and operators. The index is all equally weighted,” according to ETF Trends.

IFRA is one of several infrastructure ETFs in the iShares stable. The new ETF charges 0.40 percent per year, or $40 on a $10,000 investment.

Calling On Commodities

The iShares Bloomberg Roll Select Commodity Strategy ETF is an actively managed fund looking to provide investors exposure to a broad basket of commodities. That index is designed to limit the effects of contango, the scenario where a commodity's futures price is above its spot price.

That new ETF, which was seeded with nearly $50 million, provides “exposure to 20 different commodities, including agriculture, energy, and metals through futures,” according to iShares.

CMDY allocates nearly 31.5 percent of its weight to agricultural commodities, with energy commodities representing over 30 percent of the new ETF's weight. Industrial and precious metals combine for almost a third of CMDY's weight.

CMDY charges 0.28 percent per year, or $28 on a $10,000 investment, an affordable price relative to other active commodities strategies.

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