Why BMO’s Global Infrastructure ETF Is the Only TSX Stock You Need

BMO Global Infrastructure Index ETF (TSX:ETF) is the only TSX stock you need for passive income, solid cash flow, and long-term growth.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 9, 2022 3:00 pm EDT

| More on: ZGI

The TSX today remains a place of volatility, thanks to falling TSX stocks combined with rising interest rates and inflation. As of writing, the TSX remains down 7.32% year to date. That’s an improvement but still within market correction territory, as it’s down about 12% from 52-week highs.

Still, there’s a way to gain some stability during this turbulent time. It simply means finding the right TSX stock. Luckily, I have just the thing.

exchange traded funds — Image source: Getty Images

BMO Global Infrastructure ETF

BMO Global Infrastructure Index ETF (TSX: ZGI) is a strong option for Motley Fool investors looking to get out of the volatile market. Infrastructure provides you with stable cash flows from predictable industries. These include things like water, gas, hydro, and other necessities that we simply cannot live without.

In the case of BMO, it’s created an exchange-traded fund (ETF) that focuses on the stable industry. The ETF has 48 holdings all in TSX stocks, with current total net assets valued at $561,166,131. The ETF itself has performed quite well, seeing shares rise (yes, rise) 6.5% year to date and up 10.15% in the last month and a half alone.

So, this is all great news right now, but why should Motley Fool investors hold onto this stock long term?

A solid long-term option

For that, investors should look to the historical performance of the TSX stock, but also the Dow Jones Brookfield Global Infrastructure North American Listed Index. ZGI goes back to 2009, when ETFs were first introduced in Canada. Since the Dow Jones went live in 2012, ZGI has sought to replicate its performance.

The companies these two indexes invest in tend to be quite large, if not full-on blue-chip companies that have taken on an entire industry. These companies have the money necessary to build new facilities and create more growth. This comes with predictable cash flow, but also predictable dividends.

That’s what makes the TSX stock a strong long-term option. You can look back at history and pretty much guarantee growth for the future. And what’s better still is that ZGI is an ETF to begin with. There isn’t any reason it has to stay hooked to a dying industry, such as oil and gas. It can shift its investments with the times, continuing to create stable share growth for Motley Fool investors.

Invest now

So, with long-term growth, what’s the benefit of investing now? Canadians may have noticed that this TSX stock and others have been in rebound mode over the last month or so. This rebound makes it a great time to buy the stock while still down, but with a higher likelihood of a positive climb.

Further, there are more infrastructure opportunities the company can explore. This might include telecommunications, airport infrastructure, and more. All areas that have become necessary in the last few decades. Finally, all this is offered around the world, making it a great way to invest and diversify your portfolio.

Shares of ZGI trade at just $45 as of writing and pay a dividend of 3.34%.