Despite objections from Congress regarding inserting infrastructure spending into another round of coronavirus stimulus spending, President Trump continues focusing on the subject and with Election Day drawing closer, that could help ETFs, such as the AGFiQ Global Infrastructure ETF (GLIF).
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. President Trump is pitching a 10-year, $1 trillion infrastructure plan, which is scaled back from his 2016 campaign trail plan.
“President Donald Trump continues to press lawmakers to take up an infrastructure funding package as part of ongoing COVID-19 relief efforts, repeating his desire to see action on a measure as April drew to a close,” reports Transport Topics.
A Good Time For GLIF
Politics are important when it comes to infrastructure assets, but there are other themes at play that bode well for the long-term GLIF thesis.
“The president, who has maintained that launching a nationwide campaign focused on rebuilding the transportation networks would revamp the economy, in late March proposed a $2 trillion infrastructure package that would be backed by low-interest borrowing,” notes Transport Topics.
The infrastructure category has also historically offered higher dividend yields than global fixed-income and global equities, along with greater predictability of long-term cash flows. The ETF may be able to capture the growing demands of economic development that are driving more funding into transport, power, and other systems.
With the White House looking to unleash a massive wave of stimulus onto the U.S. economy and in an effort save jobs numbers from sliding, infrastructure could be in style as the coronavirus situation, hopefully, eases soon. Some data points confirm that some of the stimulus package should be going toward infrastructure.
The strong, consistent demand for infrastructure has delivered stable, repeatable cash flows to investors. Meanwhile, population growth, aging infrastructure, and constrained government budgets are creating opportunities for the private sector. The high cost of entering the infrastructure business also limits competition or provides a wide economic moat for those already in the field.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.