Leading up to the presidential election, investors widely expected that infrastructure stocks and ETFs stood to benefit regardless of the election’s outcome.
Though just one example, the Guggenheim High Income Infrastructure ETF (NYSEArca: GHII) traded slightly higher Wednesday after President-Elect Donald Trump overtly mentioned bolstering America’s infrastructure in his victory speech.
GHII, which is composed of the 50 highest-dividend-paying global infrastructure companies, has been the best performing infrastructure-related ETF of 2016, rising 29.1% year-to-date, compared to IGF’s 16.5% gain and GII’s 16.0% return. GHII also includes a larger U.S. tilt at 52.1% of its portfolio and a 21.2% position in Canadian companies.
The American Society of Civil Engineers calculated that the U.S. will fall $1.44 trillion short of the $3.32 trillion required to inves tin infrastructure through 2025.
According to Trump’s book, “Crippled America: How to Make America Great Again,” he has called for a “trillion-dollar rebuilding program” that will be “one of the biggest projects this country has ever undertaken.”
While the federal government goes through the political throes, states and cities seem to be ahead of the curve, spending billions of on infrastructure projects. The recent spending is still only a drop to what is needed, but municipal officials who have hesitated to borrow are beginning to loosen their purse strings.[related_stories]