Building the Case for Infrastructure ETFs
September 23rd, 2010 at 3:00pm by Tom Lydon
The $50 billion earmarked for upgrades to railways, airports and roads is just one part of the world’s infrastructure story. In markets of all types, infrastructure exchange traded funds (ETFs) are an opportunity to play growth.
Infrastructure is needed all over the world. In developed markets, it’s about maintaining and repairing what’s currently there. In emerging markets, it’s all about building entirely new systems. [Play India's Infrastructure Boom.]
The variety of ETFs currently available to those who want in on the action are either focused globally, on raw materials critical to infrastructure or on the emerging markets in particular, reports Matthew D. McCall for Index Universe.
In the U.S. alone, about $2.2 trillion is estimated by the American Society of Civil Engineers which will be needed over the next five years to address the creaky U.S. infrastructure. [5 Infrastructure ETFs, With Room To Grow.]
All around the world, infrastucture spending is being called for:
- Cassandra Pasandaran for The Jakarta Global reports that in the face of criticism over wasteful spending on overseas trips by government officials and legislators, the top economics minister said on Monday that the president wanted travel budgets restrained in favor of greater infrastructure spending.
- Eric Johnston for BusinessDay reports that Australia will need to dramatically boost its spending on infrastructure to make up for years of under-investment, to the tune of as much as $100 billion a year over the next six years. This follows a recent report by Engineers Australia which found the quality of the nation’s infrastructure has gone backward in recent years.
- Reuters on News Center reports that India will showcase its massive infrastructure spending and wider account deficit at the upcoming G20 meeting. The economy is looking overseas to import equipment to help build up projects.
There are nine ways to play the infrastructure theme with ETFs, according to the ETF Analyzer. Drop by the Analyzer to find a complete list and sort ETFs by performance, assets and other attributes:
- PowerShares Emerging Markets Infrastructure (NYSEArca: PXR)
- SPDR FTSE/Macquarie Global Infra 100 (NYSEArca: GII)
- iShares S&P Global Infrastructure Index (NYSEArca: IGF)
- iShares S&P Emerging Markets Infrastructure (NYSEArca: EMIF)
- Emerging Global Shares Brazil Infrastructure (NYSEArca: BRXX)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.