Recently, President Trump signed a $19.1 billion infrastructure aid package aimed at helping regions across the U.S. following natural disasters. When it comes to infrastructure spending, $19.1 billion is a modest sum, but the disaster aid bill is a step in the right direction.
U.S. infrastructure offers plenty of potential for investors, but has also been a vexing concept because it has been generations since Uncle Sam last passed a substantial infrastructure spending package. Investors can get defensive with infrastructure by using exchange traded funds, such as the AGFiQ Global Infrastructure ETF (GLIF).
“The cold truth is that the nation’s overall infrastructure grade, as of 2017, is a D+ according to the American Society of Civil Engineers (ASCE),” reports International Business Times. “Our bridges, highways and critical transportation infrastructure are failing under the weight of usual, every-day use. The same study from ASCE estimates that it will take $4.6 trillion just to get back to a B, and even more to maintain it.”
The AGFiQ Global Infrastructure ETF uses a multi-factor investment process to seek long-term capital appreciation by investing primarily in global equity securities in the infrastructure industry.
Investing in Domestic Infrastructure
“The bottom line is that our country’s infrastructure has been on life support for decades,” according to IBT. “In 2015, then President-elect Trump promised to make our infrastructure ‘second to none.’ To date, little has been done to deliver on this promise but it’s not too late.”
One of the advantages in infrastructure is that regardless of what the global economy is doing, it’s a necessity. Furthermore, it’s less prone to the cyclical movements of the economy, which makes it a viable alternative as a defensive play.
The Organization for Economic Co-operation and Development is calling for $70 trillion needed in infrastructure spending around the world, but governments have only earmarked $45 trillion, leaving a gap of around $25 trillion that is not going to be covered. Consequently, private spending may need to step in to fill the gap.
“One way for the government to potentially save billions over the next 10 years, for example, is by building with cheaper, stronger and more corrosion-resistant nanolaminated alloys and coatings. These materials can enable our infrastructure to endure centuries instead of decades,” according to IBT.
For more information on the infrastructure sector, visit our infrastructure category.