IFRA ETF Review: Is iShares Infrastructure Worth Buying?

iShares U.S. Infrastructure ETF provides broad domestic infrastructure exposure across utilities, transportation, and energy infrastructure companies, offering a more diversified and defensive alternative to PAVE with higher income from utility and MLP holdings.

Last updated: 2026-02-02 · Data: Yahoo Finance, fund prospectuses, SEC filings

What Is IFRA?

The iShares U.S. Infrastructure ETF tracks companies that own, operate, or develop critical infrastructure across utilities, transportation, and essential services. Managed by BlackRock, IFRA follows the Morningstar US Infrastructure Moat Focus Index, targeting businesses with competitive moats built on physical assets. Launched in 2018, the fund has accumulated $3.19 billion in assets with a remarkably low 0.30% expense ratio.

Current Snapshot

Why It Matters for Real Asset Investors

IFRA sits at the intersection of two powerful Energy Macro themes: aging grid vulnerability and the tollbooth asset advantage. As America's electrical infrastructure faces mounting strain from data centers, heat pumps, and EV adoption, the utilities and infrastructure companies in this ETF control the physical chokepoints that money can't quickly replicate.

This ETF serves the Infrastructure & Tollbooth Assets pillar because these aren't just companies—they're monopolies with moats. When your local electric utility needs to upgrade transformers or expand transmission capacity, they don't face competition. They raise rates, ratepayers pay, and shareholders collect regulated returns. During inflationary periods, these companies often outperform because their rate-setting mechanisms eventually pass costs through to consumers.

IFRA shines during periods of infrastructure bottlenecks and struggles when interest rates spike rapidly. The fund's regulated utility focus means it carries rate sensitivity, but the essential nature of these services provides downside protection that pure financial assets lack.

Top Holdings

Hawaiian Electric Industries (HE, 0.84%) - The sole electric utility for Hawaii, operating an isolated grid transitioning from oil dependence to renewables. Geographic monopoly with captive ratepayers.

PG&E Corp (PCG, 0.82%) - California's largest electric utility serving 16 million people across Northern California. Despite past troubles, it controls irreplaceable transmission infrastructure in America's largest economy.

Algonquin Power & Utilities (AQN, 0.81%) - Canadian-based utility with North American operations across regulated electricity, natural gas, and water distribution. Geographic diversity across stable regulatory environments.

PPL Corp (PPL, 0.80%) - Electric utility holding company serving Pennsylvania and Kentucky. Benefits from industrial reshoring trends increasing electricity demand in its service territories.

Edison International (EIX, 0.79%) - Parent of Southern California Edison, serving 15 million people including Los Angeles. Critical to California's grid stability and renewable integration efforts.

Consolidated Edison (ED, 0.79%) - New York's electric and gas utility serving Manhattan, Bronx, and Westchester. Irreplaceable urban infrastructure with pricing power in high-cost markets.

The concentration in utilities reflects IFRA's focus on regulated monopolies rather than competitive infrastructure plays. These companies own assets that would take decades and billions to replicate.

How It Fits the Portfolio

IFRA works as a core infrastructure allocation rather than a tactical trade. Position sizing should reflect its dual role: inflation protection through rate pass-through mechanisms and grid resilience exposure as electricity demand surges. The fund pairs well with energy midstream MLPs (infrastructure debt) and commodity producers (inflation hedges).

Consider IFRA as ballast during market volatility—utilities historically provide stability when growth stocks stumble. However, the rate sensitivity means timing matters. Dollar-cost averaging through interest rate cycles captures the regulated return profile without trying to time rate peaks.

Regime Signals

IFRA outperforms during infrastructure bottleneck periods when electricity demand exceeds grid capacity. Rate cuts eventually boost the fund as investors reach for yield and utility valuations expand. Inflation benefits these companies long-term through rate adjustments, though regulatory lag can create short-term pressure.

The ETF struggles during rapid rate hiking cycles and when tech growth dominates market sentiment. Watch for grid stress signals—summer peak demand records, transformer shortages, or data center buildout announcements—as fundamental tailwinds for the portfolio companies.

Related Research

• Alabama Power Grid Risk Assessment
• NextEra Energy (NEE) Tollbooth Analysis
• NFRA: FlexShares STOXX Global Broad Infrastructure
• VDE: Vanguard Energy ETF
• PAVE: Global X U.S. Infrastructure Development ETF

Frequently Asked Questions

How does IFRA differ from PAVE?

IFRA takes a broader approach to infrastructure, including regulated utilities, MLPs, and transportation companies alongside industrial and construction firms. PAVE focuses more narrowly on the companies that build infrastructure. This makes IFRA more defensive and higher-yielding, while PAVE offers more cyclical upside. IFRA is better for conservative investors seeking infrastructure exposure with income, while PAVE is better for growth-oriented infrastructure allocation.

What is the expense ratio of IFRA?

IFRA charges a 0.30% expense ratio, lower than PAVE's 0.47%. The lower cost reflects iShares' scale advantages and the broader, more index-like composition of the fund. For cost-conscious investors who want infrastructure exposure without paying thematic ETF premiums, IFRA offers competitive pricing from BlackRock's iShares platform.

What types of companies does IFRA hold?

IFRA holds a diversified mix of infrastructure-related companies: regulated utilities (NextEra, Southern Company), midstream energy (Williams Companies, ONEOK), rail and transportation (Union Pacific, Norfolk Southern), and construction/engineering firms. The equal-weighted methodology ensures no single stock or subsector dominates, providing balanced infrastructure exposure across the value chain.

Is IFRA a good income investment?

IFRA typically yields 2-3%, higher than PAVE but lower than dedicated utility or MLP ETFs. The yield reflects the blend of high-dividend utilities and MLPs with lower-yielding industrial and construction companies. For investors who want a single infrastructure allocation that generates moderate income while capturing capital appreciation from infrastructure spending, IFRA is an efficient choice.

For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, BlackRock filings