BNY Mellon Investment Management recently launched a new actively managed equity ETF targeting opportunities in the global infrastructure space. The BNY Mellon Global Infrastructure Income ETF (BKGI) is a fully transparent fund offering investors exposure to traditional and non-traditional infrastructure opportunities, setting it apart from other ETFs.
Let’s take a closer look at the new ETF’s unique approach and why you might want to consider it for your portfolio.
See our Active ETFs Channel to learn more about this investment vehicle and its suitability for your portfolio.
Regulated infrastructure assets also offer protection against rising inflation. For example, many contracts have built-in clauses that increase prices based on the prevailing inflation rate. And, of course, customers don’t typically have an alternative, making it unlikely that raising prices will result in lower revenue or profitability.
And finally, several catalysts could propel growth in specific regions or sub-sectors. For example, the 5G build-out is increasing demand for cellular towers, while the Infrastructure Investment and Jobs Act could provide a secular boost for U.S. infrastructure. Investors can look into these specific areas to find the best opportunities.
The advisor uses a quantitative and fundamental approach to select infrastructure companies with favorable combinations of cash flow stability, dividend payment potential, and valuation metrics. In addition, the managers consider balance sheet strength, competitive landscapes, valuations, and regulatory concerns when making decisions.
Unlike many other global infrastructure funds, BKGI invests in conventional infrastructure segments, like energy, industrials, and utilities, along with non-traditional segments, like healthcare, real estate, and communication services. The latter opportunities provide exposure to growth areas, like senior housing and 5G telecommunications.
And finally, from a performance standpoint, the fund managers seek an annualized gross forward-looking 12-month yield of 6% or more, making it a solid choice for income investors.
The most significant holdings include:
Despite the energy-focused holdings, the fund managers have extensive positions in Medical Properties Trust — a medical-focused REIT—and Orange — a French telecom business. These holdings help diversify the portfolio and ensure that any downturn in energy price expectations don’t adversely impact the entire portfolio.
Income-focused investors may want to check out the newly-launched BKGI. With a target 6% yield, the fund offers attractive income potential through a concentrated portfolio built with bottom-up fundamental analysis.
Take a look at our recently launched Model Portfolios to see how you can rebalance your portfolio.