Global index provider FTSE Group is expanding its line of infrastructure indices in what may potentially be new exchange traded fund benchmarks down the line as global growth allow governments to allocate more toward infrastructure spending.
FTSE launched the FTSE Global Core Infrastructure Capped 50/50 Index and FTSE Developed Core Infrastructure Capped 50/50 Index on Thursday, according to a press release.
The indices will track sub-sectors like utilities, including electricity, gas, water and multi-utilities; Transportation, including airports, ports, toll roads, railroads, railways and the designation “Other sectors”, which includes pipelines, satellites, and telecommunications infrastructure.
The indices will help address growing interest investors led by large institutions for real assets like infrastructure and real estate. FTSE is the index provider for the EGShares Brazil Infrastructure Index Fund (NYSEArca: BRXX).
“The enhancement to FTSE’s Infrastructure Index Series, incorporating new capped versions, gives market participants an industry-defined interpretation of infrastructure. Through discussions with market practitioners we have increased the exposure of particular infrastructure sub-sectors, allowing for a broader representation of this growing asset class,” Jessie Pak, FTSE Managing Director of Asia, said in the press release.
Governments are increasing fiscal expenditures to update and expand infrastructure projects. For instance, The Obama administration has proposed $478 billion in spending on roads, bridges, ports and other key transportation nodes, reports Jeffrey Sparshott for the Wall Street Journal.
“While infrastructure investment will continue to be needed even after the economy reaches full employment, time is running out to make these needed investments under ideal economic conditions,” the White House budget said.
Oxford Economics and PwC project global infrastructure spending will top nearly $78 trillion between 2014 and 2015, with about 60% of that coming out of the Asia Pacific, the Wall Street Journal reports.
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Max Chen contributed to this article.