BMO Global Infrastructure Index ETF (ZGI) Review
We have embarked on a journey to explore ‘all’ of the exchange-traded funds (ETFs) created by the BMO Global Asset Management group. They have around 149 ETFs at the moment and the list keeps on growing. So, at least we will try to cover the most popular and best-performing ETFs in their portfolio. In this article, we talk about the BMO Global Infrastructure Index ETF, ticker symbol; ZGI.TO in the Toronto Stock Exchange (TSX).
BMO Global Asset Management (BMO GAM) is a family member of the Bank of Montreal, Canada’s first bank. The company holds a massive portfolio of exchange-traded funds (ETFs) that fit different investment goals of their customers. From low-risk funds to high-risks and from moderate incomes to high incomes, they have funds that fit all your investment needs. A smart investor will invest in a collection of these ETFs to manage risk and increase yield.
BMO Global Infrastructure Index ETF is a fund that gives its investors exposure to global equity markets. However, it still does not deviate too far away from home. As of this article, ZGI gives you exposure to the USA, Canada, United Kingdom, Mexico, and Brazil economies. Also, since the fund is labeled ‘infrastructure,’ it focuses mainly on oil & gas pipeline, electric, water, construction, and storage and warehousing companies.
| Quick Facts | ZGI.TO |
|---|---|
| Fund inception date | January 19, 2010 |
| Net Assets (Oct 8, 2021) | $275 million |
| Exchange | Toronto Stock Exchange |
| Annualized distributions yield | 3.3% |
| Distribution frequency | Quarterly |
| Management expense ratio | 0.61% |
| Account eligibility | TSFA/RRSP/RESP/RRIF/DPSP |
In a broader sense, BMO Global Infrastructure Index ETF attempts to replicate the Dow Jones Brookfield Global Infrastructure North American Listed Index. To be eligible to be listed in this Dow Jones index companies must fulfill several criteria;
- must have a minimum float-adjusted market capitalization of US$500,
- a minimum three-month average daily trading volume of US$1 million,
- must be listed in Canada or the United States,
- more than 70% of a potential constituent issuer’s cash flows must be derived from the development, ownership, lease, concession or management of infrastructure assets.
BMO rates ZGI to be a medium-risk investment. This is likely due to the fact that the index solely focuses on infrastructure companies.
BMO Global Infrastructure Index ETF (ZGI) Holdings
At the time of this article, the ZGI fund had 47 holdings across the different geographies mentioned above. Below are the top 20 holdings of the ETF on October 8, 2021.
| Holding Name | Weightage |
|---|---|
| ENBRIDGE INC | 10.31% |
| AMERICAN TOWER CORP | 8.94% |
| CROWN CASTLE INTERNATIONAL CORP | 8.66% |
| TRANSCANADA CORP | 6.27% |
| NATIONAL GRID PLC | 5.70% |
| SEMPRA ENERGY | 4.89% |
| KINDER MORGAN INC | 4.30% |
| WILLIAMS COS INC | 4.29% |
| SBA COMMUNICATIONS CORP | 4.27% |
| AMERICAN WATER WORKS CO INC | 3.71% |
| EVERSOURCE ENERGY | 3.55% |
| ONEOK INC | 3.46% |
| CONSOLIDATED EDISON INC | 3.14% |
| CHENIERE ENERGY INC | 3.11% |
| EDISON INTERNATIONAL | 2.59% |
| FORTIS INC/CANADA | 2.56% |
| PEMBINA PIPELINE CORP | 2.26% |
| PG&E CORP | 2.01% |
| CENTERPOINT ENERGY INC | 1.89% |
| TARGA RESOURCES CORP | 1.52% |
Anyone familiar with the income investments in the USA and Canada will be able to recognize most of the names above. There are some high-yield dividend stocks on this list.
These assets are allocated approximately 69.5% in US companies, 23% in Canadian companies, 6% in UK companies, 1.2% in Mexican companies, and 0.3% in Brazilian companies.
BMO Global Infrastructure Index ETF (ZGI) Performance
The ZGI ETF has had a decade to grow since its inception, and it has been a sure win for anyone who got into the fund early on.
The ETF has seen around 269% returns since its inception. An investment of $10,000 in 2010 would have grown to an impressive $36,749 by 2021 — almost 4x the initial investment.
As per the above chart, we can see that the BMO Global Infrastructure Index ETF has been able to almost perfectly replicate the Dow Jones Brookfield Global Infrastructure North American Listed Index.
Is ZGI ETF for You?
For an investor looking for accelerated growth through the steady revenues generated in the infrastructure companies, ZGI could be a winner for you. Usually, infrastructure companies are massive companies with a lot of capital, cash, and profits. These companies will continue to pay juicy returns as long as their long-term contracts keep renewing. However, you don’t necessarily have to worry about doing all this background research on the companies, as BMO fund managers will do this work for you when you invest in ZGI ETF.
Check out the latest information about the fund on BMO.
Disclosure: Any information given in this article is not to be construed as investment advice. You must do your own research before investing any money in the stock market. All investments carry inherent risks even with the possibility of losing all your money.
