BMO Global Infrastructure ETF: Steady Dividends and Infrastructure Resilience in a Post-Pandemic World

The BMO Global Infrastructure Index ETF (ZGI.TO) has emerged as a compelling income-generating vehicle for investors seeking exposure to the global infrastructure boom. With a recent dividend of CAD 0.37 per unit, up from CAD 0.35 in 2023, the ETF's consistent payout history and sector-specific focus position it as a viable option for investors navigating a landscape of rising rates and geopolitical uncertainty. Let's dissect its merits.

Dividend Stability Amid Sector Growth

ZGI.TO's dividend history reveals a pattern of gradual growth. Since 2023, it has distributed CAD 0.35 quarterly until March 2024, when it increased to CAD 0.37—a 5.7% rise—reflecting the fund's underlying portfolio resilience. The June 2025 dividend of CAD 0.37, with an ex-dividend date of June 27, maintains this trajectory. A trailing twelve-month yield of 2.89% (as of April 2025) underscores its appeal for income seekers.

Sector Composition: Energy and Utilities Dominate

ZGI.TO's portfolio is concentrated in sectors critical to global infrastructure:

• Energy (41.72%): Includes pipeline operators and utilities, benefiting from rising demand for energy transition and grid modernization.
• Utilities (41.53%): Exposed to regulated, cash-generative assets like power distribution and renewable energy projects.
• Real Estate (14.88%): Focuses on infrastructure-linked properties, such as data centers and telecom towers.

This allocation aligns with the ETF's mandate to track the Dow Jones Brookfield Global Infrastructure Index, which emphasizes companies deriving over 70% of cash flows from infrastructure assets.

Expense Efficiency and Valuation

With an expense ratio of 0.62%, ZGI.TO offers cost-efficient access to a diversified infrastructure portfolio. This is competitive compared to actively managed funds, which often charge 1% or higher.

The ETF's price-to-book ratio of 1.7x (as of June 2025) suggests it trades at a premium to book value, reflecting investor confidence in infrastructure's long-term growth. However, its 10-year annualized return of 7.6% and relatively low volatility (standard deviation of 12.7%) indicate stability.

Why Infrastructure Now?

Post-pandemic infrastructure spending is accelerating globally. Governments are prioritizing projects to modernize energy grids, expand broadband access, and decarbonize transportation. The ETF's focus on North American holdings (91%), particularly in energy and utilities, positions it to benefit from U.S.-Canada infrastructure initiatives, such as the Bipartisan Infrastructure Law (2021) and Canada's Clean Energy Ministerial commitments.

Risks and Considerations

• Sector Concentration: Over 80% in energy and utilities may amplify exposure to commodity price swings or regulatory shifts.
• Geographic Risk: Heavy U.S./Canada focus limits diversification benefits from other regions.
• Recession Risks: Infrastructure spending could slow if global growth weakens, though utilities and energy remain recession-resilient.

Strategic Opportunity: June 27 Ex-Dividend Date

Investors targeting the June 27 ex-dividend date should note:
1. Holding Requirement: Purchase shares before June 27 to qualify for the CAD 0.37 dividend, payable on July 3.
2. Capital Appreciation Potential: Infrastructure assets often outperform during late-cycle economic phases, as governments prioritize public projects.
3. Tax Considerations: Distributions may include returns of capital, which reduce the cost basis and defer taxes.

Investment Recommendation

ZGI.TO is recommended for conservative to moderate-risk investors seeking steady income and exposure to a sector poised for growth. The ETF's 2.89% yield and low expense ratio make it a compelling option for income portfolios. However, investors should monitor macro risks, such as interest rate hikes or geopolitical tensions impacting energy prices.

For those with a long-term horizon (5+ years), the ETF's focus on infrastructure—critical to global economic health—aligns with a structural theme. Pair it with a broader equity allocation to balance sector-specific risks.

Final Take

The BMO Global Infrastructure ETF offers a disciplined way to capitalize on infrastructure's enduring role in economic recovery. With its June 27 dividend capture opportunity, it's a timely entry point for investors aiming to secure income while participating in a sector primed for growth.

Data as of June 20, 2025. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.