Infrastructure Could Work in This Landscape, Clearing a Path for This ETF

In a post-coronavirus investing landscape, infrastructure could be one of the asset classes that delivers for investors, particularly as global governments look to lift tattered economies. That could benefit 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.

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.

“Before the coronavirus began pounding the economy over the last several weeks, Jeff Davis, Senior Fellow at the ENO Center for Transportation, doubted that reauthorizing the Fixing America’s Surface Transportation (FAST) Act before it expires at the end of September was in the cards because of the reluctance in Congress to raise the gas tax to pay for it,” reports FreightWaves.

GLIF Chart

GLIF data by YCharts

Going With GLIF

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.

One of the advantages of 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.

Always meaningful to the infrastructure investment thesis, politics are taking on renewed focus in this asset class in the current climate.

“In a March 19 letter to Congressional leaders in the U.S. House and U.S. Senate, the Transportation Construction Coalition, a group of 31 associations and labor unions, asserted that the COVID-19 crisis provides an incentive for Congress to move ahead with a $287 billion FAST Act reauthorization passed by the Senate’s Environment & Public Works Committee last July. The House has yet to pass a formal bill of their own,” according to FreightWaves.

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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.