You know what’s unlikely to get disrupted by artificial intelligence? Real assets. Consulting firms, software developers, marketing agencies, and even parts of finance and law may feel pressure from automation and AI-driven productivity.
But pipelines, apartment buildings, power grids, and telecom towers still need to exist. People still need places to live, electricity to power their homes, and infrastructure to move goods and data around.
We’ve already seen early signs of rotation in 2026, with investors moving back into energy, industrials, and consumer staples. My focus is slightly different.
I’m personally looking at infrastructure and real estate — the physical backbone of the economy. Here are two exchange-traded funds (ETFs) I find compelling this year.
Source: Getty Images
Canadian real estate
Canadian real estate has had a rough stretch. Office properties continue to struggle with hybrid work. Condo prices in certain markets have softened. And many individual landlords are feeling the squeeze from high financing costs.
But that’s largely a leverage story. Many investors got into trouble because they borrowed heavily. If rents don’t fully cover mortgage payments, taxes, and maintenance, cash flow turns negative quickly.
That’s not a problem when you own real estate investment trusts (REITs) through an ETF, especially inside a registered account like a Tax-Free Savings Account (TFSA). My preferred vehicle is BMO Equal Weight REITs Index ETF (TSX:ZRE).
ZRE holds roughly 20 Canadian REITs across retail, multifamily residential, industrial, healthcare, and office properties. The key feature is equal weighting. Each REIT is capped at around 5% at rebalance. That prevents one large name from dominating the portfolio and enforces a disciplined buy-low, sell-high approach over time.
Income is a major feature of REITs. Combined in ZRE, the portfolio currently supports a 4.61% yield, paid monthly. That’s meaningfully higher than most broad-market equity ETFs.
The trade-off is cost. ZRE charges a 0.61% expense ratio, which is higher than plain-vanilla index ETFs. You’re paying for targeted sector exposure and equal-weight construction.
Global infrastructure
A major portion of the Canada Pension Plan’s portfolio is allocated to infrastructure. They favour it for a reason. These are tangible assets with regulated or contracted revenue streams that tend to hold up across economic cycles.
As a retail investor, you can’t directly invest alongside CPP in private infrastructure. What you can do is gain exposure through public markets. One accessible option is BMO Global Infrastructure Index ETF (TSX:ZGI).
ZGI tracks the Dow Jones Brookfield Global Infrastructure North American Listed Index. To qualify, companies must be listed in Canada or the U.S. and derive at least 70% of their cash flow from infrastructure-related activities such as development, ownership, leasing, or management of infrastructure assets.
The result is a concentrated portfolio of about 50 energy and utility companies. That includes oil and gas storage and pipeline operators, electric, gas, and water utilities, telecom tower operators, and even select airport and marine port companies.
Infrastructure often carries inflation sensitivity because many contracts are indexed to inflation or allow for regulated rate increases. That was visible in 2022, when ZGI delivered a 4.77% return in a year when both stocks and bonds broadly declined.
The current yield is 2.45%, lower than ZRE, but the total return has been strong. Over the past five years, ZGI has delivered an 11.91% annualized total return with dividends reinvested.
Like ZRE, it carries a 0.61% expense ratio. It’s not cheap, but it provides targeted exposure to a segment of the market that is difficult to replicate on your own.
