As many try to anticipate President Donald Trump’s policy changes, Global X has launched a targeted U.S. infrastructure-related exchange traded fund to help investors capitalize on the potential trillions in fiscal spending to expand and repair the country’s infrastructure system.
The recently launched Global X U.S. Infrastructure Development ETF (BATS: PAVE) comes with a 0.47% expense ratio.
The Global X U.S. Infrastructure Development ETF tries to reflect the performance of the Indxx U.S. Infrastructure Development Index, which is comprised of companies focused on domestic infrastructure development, including those involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.
Additionally, the underlying index applies a proprietary analysis to focus on companies that provide the most exposure to increased investment in U.S. infrastructure. The underlying index also screens companies based on revenue exposure and primary business operations.
PAVE’s sector weights include electrical components & equipment 14.1%, construction & engineering 13.0%, steel 12.8%, railroads 12.8%, trading companies & distributors 11.0%, industrial machinery 9.5%, construction materials 7.8%, construction machinery & heavy trucks 2.8% and specialty chemicals 2.6%.
Top components include Fortive Corp. 3.2%, Nucor Corp. 3.2%, Rockwell Automation 3.1%, CSX Corp 3.1% and Norfolk Southern Corp. 3.1%.
The American Society of Civil Engineers released its quadrennial “infrastructure Report Card” in 2013, revealing a D+ rating for the U.S., according to a note. An estimated to go over $10 trillion by 2040 to repair and modernize the country’s infrastructure.
“In the past few years, we’ve seen the national discourse coming to a bipartisan agreement that the United States needs to heavily invest in rebuilding our national infrastructure. Many strategies, however, are focused on providing exposure to existing infrastructure assets, rather than the companies that should be heavily relied upon to maintain, update, and build new infrastructure projects,” Jay Jacobs, director of research at Global X, said in a note. “Our focus has always been on bringing products to market that offer investors access to untapped market segments, and PAVE is a continuation of this goal.”
For more information on new fund products, visit our new ETFs category.