Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Past fund performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.
Construction and infrastructure mutual funds let investors participate in building sector growth without picking individual stocks. The five picks below represent the range of approaches available in 2026, from pure homebuilder exposure to broad infrastructure diversification, selected for fund composition, expense ratios, and track record.
| Product | Best For | Rating |
|---|---|---|
| Fidelity Select Construction Fund (FSHOX) | Pure homebuilder exposure | 4.7/5 |
| Vanguard Materials Index Fund (VMIAX) | Low-cost materials sector | 4.8/5 |
| iShares U.S. Infrastructure ETF (IFRA) | Broad infrastructure coverage | 4.6/5 |
| T. Rowe Price Real Assets Fund (PRAFX) | Real asset diversification | 4.5/5 |
| PIMCO RAE Global Ex-US Fund (PGFIX) | International construction exposure | 4.4/5 |
Fidelity Select Construction and Housing Fund (FSHOX) — Best Pure Construction Exposure
FSHOX concentrates holdings in U.S. homebuilders, construction materials, and building products companies. Major holdings typically include names like D.R. Horton, Lennar, and NVR, which are the dominant U.S. publicly traded homebuilders. The fund moves in close correlation with housing starts, mortgage rates, and residential construction activity, which means it can be volatile during rate cycles. For investors with a specific thesis on U.S. housing demand, it provides direct sector exposure through a single fund. Fidelity’s platform makes it accessible with no transaction fees for Fidelity account holders.
Search for Fidelity FSHOX Construction Fund on Amazon
Vanguard Materials Index Fund Admiral Shares (VMIAX) — Best Low-Cost Materials Pick
VMIAX tracks the MSCI US Investable Market Materials Index, which includes construction materials producers, chemical companies, and industrial materials suppliers. The 0.10% expense ratio is among the lowest available for any sector fund, which meaningfully improves net returns over time compared to actively managed alternatives. The fund includes cement, steel, aggregates, and specialty materials companies that supply the construction industry, providing upstream exposure without direct homebuilder concentration. It’s a strong choice for cost-conscious long-term investors seeking construction materials exposure without high management fees.
Search for Vanguard Materials Index Fund on Amazon
iShares U.S. Infrastructure ETF (IFRA) — Best Broad Infrastructure Coverage
IFRA takes a broad approach to infrastructure, holding companies involved in energy infrastructure, water systems, transportation, and construction and engineering firms. The wider diversification reduces concentration risk compared to pure homebuilder funds. With over 150 holdings including companies across utilities, airports, and engineering services, IFRA captures construction-adjacent growth while reducing exposure to housing market volatility. The 0.40% expense ratio is reasonable for the coverage provided. This fund is suitable for investors who want infrastructure exposure with lower single-sector risk than a pure construction fund.
Search for iShares Infrastructure ETF on Amazon
T. Rowe Price Real Assets Fund (PRAFX) — Best for Real Asset Diversification
PRAFX invests across real assets including natural resources, real estate, commodities, and infrastructure, making it broader than a pure construction play but relevant for investors who see construction as part of a wider real asset thesis. The active management approach means the fund can shift allocations based on economic conditions. Expense ratio is higher than index options, but active management has historically added value in commodity-linked real asset strategies. Suitable for investors who want professional allocation decisions across tangible asset classes rather than tracking a fixed construction index.
Search for T. Rowe Price Real Assets Fund on Amazon
PIMCO RAE Global Ex-US Fund (PGFIX) — Best International Construction Exposure
For investors seeking construction exposure outside the U.S., PGFIX provides a fundamentals-weighted approach to international equities including materials and construction companies in developed and emerging markets. Emerging market construction demand, particularly in Asia and the Middle East, can offer growth profiles different from U.S. housing cycles. The fund uses PIMCO’s Research Affiliates Equity methodology to weight holdings by fundamental factors rather than market cap. Currency risk is a factor to consider with any international fund, but the diversification from U.S. domestic construction cycles can be a portfolio benefit.
Search for PIMCO Global Fund International Investing on Amazon
How to Choose Construction Mutual Funds
Start by deciding how much sector concentration you want. Pure homebuilder funds like FSHOX are high-conviction plays on U.S. residential construction. Broader materials or infrastructure funds reduce concentration but also reduce direct construction exposure. Compare expense ratios carefully since a 0.7% difference in annual fees compounds meaningfully over a decade. Review the fund’s top holdings to understand what you are actually buying. Consider how the fund correlates with other holdings you already have to avoid inadvertent doubling up on real estate or materials risk. Sector funds generally work best as satellite positions around a core diversified portfolio.
For related reading, see best office tools for contractors and best construction site security cameras. Review our evaluation criteria at /methodology.
Frequently asked questions
Are construction mutual funds a good investment in 2026?+
Construction and infrastructure funds can benefit from government infrastructure spending, housing demand, and commercial development cycles. Like any sector fund, they carry more concentration risk than broad market funds. They work best as a portion of a diversified portfolio rather than a primary holding. Review expense ratios, historical returns, and fund composition before investing.
What is the difference between a construction fund and an infrastructure fund?+
Construction funds typically focus on homebuilders, engineering firms, and building materials companies. Infrastructure funds are broader and include utilities, transportation, toll roads, and airports in addition to construction firms. Infrastructure funds tend to have lower volatility because utility and toll assets produce steady cash flows, while pure construction funds move more closely with housing and commercial building cycles.