Under the Recovery Act, counties are allocated large sums of low-interest bonds to give to private projects.  However, there are pros and cons to the Obama administration’s efforts to stimulate the economy.  Investment projects — especially for infrastructure and new technologies — produce limited, delayed results. Programs intended to keep people afloat seem to do the most to lift the economy, states Charles Euchner of The New York Times.

Additionally, the program gives priority to shovel-ready projects, but these take a long time to get going and positively influence the economy.  Infrastructure projects are beneficial because they not only put construction workers on the job, they also create a foundation for new waves of economic growth. Additionally, highways, airports and rail lines could increase the efficiency of local economies, and research and development could lead to innovation.  (Where infrastructure ETFs go from here).

Another problem with stimulus funding, experts say, is that dubious projects too often jump to the head of the line.  Projects with political backing win funding, regardless of merit, while more worthwhile projects languish for decades.  (The stimulus effort has its critics.)

For more stories on infrastructure, visit our infrastructure category.

Two ETFs that have been hindered by this lag is the SPDR/FTSE Macquarie Global Infrastructure Fund (NYSEArca: GII) up 2.7% year-to-date; and iShares S&P Global Infrastructure (NYSEArca: IGF), up 12.4% year-to-date.

Kevin Grewal contributed to this article.

The Obama Administration has announced that it’s investing $3.4 billion in order to fund this project. Through the plan, 100 private companies, utilities, cities and manufacturers will receive grants ranging from $400,000 to $200 million in order to build a smart energy grid, reports Lynn Sweet for The Chicago Sun-Times. So far, these awards are the largest Recovery Act awards ever made on one day. (Nine things that could affect alternative energy).

Analysis shows that by getting smart grid technology off the ground, it could reduce electricity use by at least 4% by 2030. This would result in savings of $20.4 billion for both businesses and consumers. (Does this mean alternative energy is not so alternative anymore?)

The Senate environment committee also released details of its climate change legislation, which includes the share of “emissions allowances,” which is revenue that comes from regulation of a cap-and-trade system – once it’s in place. The Senate has nearly tripled the share of allowances set aside by the House for transit, inter-city rail, and other efforts to trim transport-based emissions. Elana Schor for Streetsblog reports that the Senate measure would set aside more than 3% of allowances in the first two years of the cap-and-trade system for limiting pollution from the transportation sector.

For more stories about clean energy, visit our alternative energy category.

• First Trust NASDAQ Clean Edge Green Energy (Nasdaq: QCLN)
• iShares Dow Jones U.S. Utilities (NYSEArca: IDU)
• iShares S&P Global Infrastructure (NYSEArca: IGF)
• iShares S&P Global Clean Energy (NYSEArca: ICLN)
• PowerShares WilderHill Clean Energy (NYSEArca: PBW)
  
• PowerShares Global Clean Energy (NYSEArca: PBD)
• PowerShares Cleantech (NYSEArca: PZD)
• PowerShares Dynamic Utilities (NYSEArca: PUI)
• Utilities Select Sector (NYSEArca: XLU)
• Vanguard Utilities (NYSEArca: VPU)
• SPDR FTSE/Macquarie Global Infrastructure 100 (NYSEArca: GII)

Despite global infrastructure promises, deals aren’t materializing and the infrastructure industry is discovering that money is still hard to come by, writes Richard Barley for The Wall Street Journal. According to researcher Preqin, a record 94 infrastructure funds are out seeking capital.

Up until 2030, annual requirements for spending on electricity, roads, rail, telecommunications and water will be around 3.5% of global GDP. Developed countries will need to monetize infrastructure assets by privatization or by tolling, while infrastructure projects will likely cost even more in emerging markets.

Some countries have generated projects large enough to produce enough new jobs to syndicate guarantees from the state government while some corporate infrastructure operators gained funding through bonds and private debt placements. A few developing countries have the benefit of strong domestic growth, which would support financing projects internally.

Sen. Benjamin L. Cardin has asked the Senate to invest more in domestic infrastructure, and has proposed a Water Infrastructure Financing Act to give more than $35 billion in funding for both improving the water supply and basic infrastructure, reports the Associated Press.

• SPDR FTSE/Macquarie Global Infra 100 (NYSEArca: GII)

iShares S&P Global Infrastructure Index (NYSEArca: IGF)

Fore more information on infrastructure, visit our infrastructure category.

Max Chen contributed to this article.

President Barack Obama and Congress prescribed a $787-billion dose of tax cuts and spending increases six months ago, reports David Wessell for The Wall Street Journal. Today, U.S. citizens seem doubtful that the plan is working, but it was never intended to hit the economy as quickly as possible.

Roughly one-third was tax cuts, which were quick-acting. One-third was aid to state and local governments and individuals, which were only slightly slower. But one-third was infrastructure, education and other spending that won’t show up for many months, or even years.

While it’s still relatively early in the game, the stimulus effort is not without its critics. David Frum for National Post reports that the stimulus package is not being used as quickly or as responsibly as it could have been. Banks also tightened lending in the second quarter, rather than picking it up.

The United States also had the biggest stimulus package, as a percentage of GDP, but has so far seen some of the fewest results, Frum says.

Part of the problem, Wessell says, may have been in the marketing. Promises were made that the stimulus would save or create 3.7 million jobs. That backfired, and now it’s far from being seen as a success.

Infrastructure ETFs have all topped their 200-day moving averages this year. Will they remain there as spending continues? Watch them closely to see what happens.

• SPDR/FTSE Macquarie Global Infrastructure Fund (GII): down 0.8% year-to-date

• iShares S&P Global Infrastructure Fund (IGF): up 9% year-to-date

For more stories about infrastructure, visit our infrastructure category.

The American Recovery and Reinvestment Act of 2009 provides $111 billion for infrastructure and science projects, report Kevin L. Kliesen and Douglas C. Smith for St. Louis Fed. States are scrambling to get a piece of a slated $27.5 billion set aside for spending on highway construction alone.

The United States’ 2009 report Card for America’s Infrastructure is a cumulative D. The ASCE says the U.S. needs $1.1 trillion in spending over the next five years to bring infrastructure up to “good condition.” The Congressional Budget Office calculated that spending on the U.S. transportation infrastructure was about $16 billion below spending needed to maintain service levels.

Macroeconomic determinants of infrastructure spending include:

• Growth of per capita income and technical change. As a country gets wealthier, the spending habits change along with the necessary infrastructure needed to facilitate that change.
• Population growth. More people means more public schools, hospitals, fire stations and other basic infrastructures.
• Higher costs. Increase in commodity prices also increases costs to construction, which means less infrastructure projects.

Microeconomics factors at the state and local levels include political considerations, engineering assessments and local economic performance. Other determinants include:

• Budgets. Local governments have to stick to a balanced budget, which limits funding to projects based on revenue.
• Net Benefits. Projects are deemed economical if the benefits exceed costs.
• Rate of return. Projects are also economically feasible if real rate of return exceeds estimated real interest rate earned on revenue invested elsewhere.

Infrastructure trends will vary across the board. The two largest categories are in education facilities and highways while industrial structures, health care structures and military structures are all dropping in priority. The government will also have to take into consideration the changing dynamics of technology and the way it influences infrastructure. For example, e-commerce reduces the need for traditional infrastructure and energy infrastructure will begin shift as society embraces alternative fuels.

• iShares S&P Global Infrastructure (IGF): down 0.1% year-to-date

• SPDR FTSE/Macquarie Global Infrastructure 100 (GII): down 6.1% year-to-date

For more information on infrastructure, visit our infrastructure category.

Max Chen contributed to this article.

In the next decade, building and renovation of highways and utilities will be a prominent theme in many countries, remarks Roger Nusbaum for TheStreet.

Infrastructure refers to the things we rely on to get by and get around: water, roads, bridges, wastewater treatment, electricity, airports, hospitals, schools and so on.

Emerging nations will have a slowly emerging middle class and they will need all that and more. They’ll need running water, electricity, cars and roads on which to drive them. Developing nations will be spending money to build roads, or update old infrastructure as the case may be in the United States.

The total amount of worldwide infrastructure spending over the next 20 years could amount to $35 trillion, writes Eric J. Gerritsen for The Journal of Commerce. Around $3 trillion worth of this fiscal spending could be put into the global economy within the next 24 months.

• China has pledged $585 billion
• India is expected to spend $500 billion by 2015
• Japan may spend $129 billion

It isn’t all just government money, either. Private companies are expected to contribute to much of this spending, too.

The infrastructure investment theme is likely to remain a compelling venture as emerging markets continues grow.

• SPDR FTSE/Macquarie Global Infra 100 (GII): down 8.4% year-to-date. GII invests in foreign utilities.

• iShares S&P Global Infrastructure Index (IGF): down 2.4% year-to-date. IGF has a mix of utilities and industrial companies.

• PowerShares Emerging Markets Infrastructure (PXR): up 43.3% year-to-date. PXR holds mostly materials and industrial stocks.

• First Trust ISE Global Engineering And Construction (FLM): up 14.7% year-to-date. FLM has a narrow focus on engineering and construction.

For more stories on infrastructure, visit our infrastructure category.

Max Chen contributed to this article.

Agencies are required to present specific spending plans for the stimulus money and exactly how it will be spent over the next several months. The goal of the money is to create jobs and get the citizens of the United States back to work, explains Ashley Milne-Tyte for Marketplace. The unemployment rate has come in at 9.4%.

Over the summer, an additional 600,000 jobs should be created, as the stimulus money is pumped into the economy and every effort is made to to get on the way to recovery. A web page has been posted to track the spending which will also track people affected by stimulus spending and trace their stories, report Kate Phillips and Ashley Southall for The New York Times.

The $787 billion in economic stimulus money is set to go to Federal agencies such as Department of Health and Human Services to the Department of the Interior, which is intended to accelerate spending on 10 major projects this summer, according to Reuters. Ron Scherer for The Christian Science Monitor reports that spending the stimulus money will not prove to be either easy or quick. Rather, there are competitive bidding rules, and provisions within legislation that are causing confusion and delay.

Some of these 10 projects include infrastructure improvements. Keep an eye on infrastructure funds and watch the trend lines to see if signs of improvement materialize. Companies such as Caterpiallar (CAT) and Deere & Co. (DE) could benefit from the federal contracts.

• iShares S&P Global Infrastructure (IGF): down 1.8% year-to-date

• SPDR FTSE/Macquarie GI 100 ETF (GII): down 7.3% year-to-date

While President Barack Obama’s infrastructure push has been getting a lot of notice lately, there’s an even bigger push for infrastructure improvements around the world.

The total amount of worldwide infrastructure spending over the next 20 years could amount to $35 trillion, writes Eric J. Gerritsen for The Journal of Commerce. Around $3 trillion worth of this fiscal spending could be put into the global economy within the next 24 months.

• China has pledged $585 billion
• India is expected to spend $500 billion by 2015
• Japan may spend $129 billion

Countries are now tasked to spend the money efficiently so the country that comes out on top will have a strong base for economic growth. The money will be spent on infrastructure projects that include waterworks, roads, bridges, utilities, runways, seaports, schools, hospitals and railways.

The top two spenders, America and China, are a topic of debate. This monumental government investment will determine whether China, a country with lots of cash that plans big, long-term projects, or America, a country with a plan more designed to help and improve what’s already in place, will come out as the head economic honcho.

In America, the economy may only get a short-term fix as aging highways and bridges are mended. China could benefit on the long-term as infrastructure is built to connect far-flung regions together. The regional North American and Asia-Pacific will also be important in terms of economic growth as countries within the regions become better connected for trade.

The Obama administration has emphasized green and clean tech, but most of the $50 billion from the stimulus bill for energy will be used to fix energy inefficiencies. In China, an average $33 billion will be spent annually for the next 12 years on alternative energy.

There is $7.2 billion in spending to help expand broadband usage into underserved areas in America, but this is far from the $44 billion necessary to provide universal broadband coverage. China recently surpassed the United States in becoming the country with the largest number of internet users, or 80.9 million.

• PowerShares Emerging Markets Infrastructure (PXR): 51.8% year-to-date

• iShares S&P Global Infrastructure Index (IGF): down 4.1% year-to-date

• SPDR FTSE/Macquarie Global Infra 100 (GII): down 8.8% year-to-date

Max Chen contributed to this article.

The first transportation project to start is a mile-long stretch of a pot-holed road in Silver Spring, MD.  The effect that taxpayer dollars have had on the local economy is evident.  With the repaving of this road, general contractors who were once unemployed are now employed and American Infrastructure, the company in charge of the project, has 60 people working on the job, 20 of whom were previously unemployed, states Tamara Keith of Marketplace.

This is just the beginning of a massive infrastructure spending package that the Obama administration has put together to repair the country’s beaten and bruised roads and bridges.  It’s hoped that as more projects break ground, more jobs will be created chipping away at the unemployment rate, more dollars will circulate in local economies and overall public safety will increase for all of us.

• iShares S&P Global Infrastructure (IGF): which is up 26.3% over the past three months, despite being down 4.1% year-to-date

• SPDR FTSE/Macquarie GI 100 ETF (GII): which is up 14.9% over the past three months, despite being down 8.8% year to date

Kevin Grewal contributed to this article.

The new Claymore funds will be all equity-based, writes Lara Crigger for Hard Assets Investors. They will have 80% of their constituent stocks picked out by using traditional qualitative methods from Delta Global Advisors. Delta Global will pick companies with $400 million market cap or more, and use a “top-down approach to global markets and infrastructure-related sub-sectors” and a “bottom-up approach to individual companies.”

The challenge lies in the performance. Last year, 70%  of all actively managed U.S. equity funds underperformed their benchmarks. These new funds may fare better with lower expense ratios and investors will be happy if the funds can provide the alpha. Investors may sit on the sidelines to see how they do first before jumping in.

The three newly filed actively managed commodity equity ETFs include:

Claymore Delta Global Infrastructure Fund. It will cover infrastructure and emerging markets by picking out companies involved in world construction, which includes miners, basic materials suppliers, utilities, telecoms, infrastructure engineers, water infrastructure, and road, rail, port and airport builders and operators.

Similar funds:

• SPDR FTSE/Macquarie Global Infra 100 (GII): down 8.5% year-to-date
• First Trust ISE Glb Engnrg And Const Idx (FLM): up 8.6% year-to-date
• PowerShares Emerg Mks Infrastructure (PXR): up 35.8% year-to-date
• iShares S&P Global Infrastructure Index (IGF): down 4.7% year-to-date

Claymore Delta Global Hard Assets Fund. Companies included will benefit through both the ups and downs in hard commodities prices, which includes mining, processing and selling hard commodities. Hard commodities include precious metals, base metals, energy and energy services.

Similar funds:

• iShares S&P North Amer Natural Resources (IGE): up 12.4% year-to-date
• Market Vectors RVE Hard Assets Prod ETF (HAP): up 20.8% year-to-date

Claymore Delta Global Agribusiness Fund. This will have companies that deal with growing, selling, processing or trading a agricultural commodities such as corn, soybeans, wheat, sugar, palm oil, cotton, oats and fruit. Biofuel companies may also be included.

The Claymore agribusiness fund will have to compete against the Market Vectors Agribusiness ETF (MOO), which is up 32.1% year-to-date.

If there are a actively managed commodity ETFs, then why not actively managed commodity futures funds? The ETN ELEMENTS S&P CTI ETN (LSC), currently down 9.7% year-to-date, takes the long and short positions in various commodity futures according to trends.

Max Chen contributed to this article.