Infrastructure spending used to be one of the rare bipartisan issues in Congress, but with domestic politics increasingly contentious these days, even the notion of working together to shore up America’s roads and bridges is falling by the wayside.
Still, there is hope for this asset class. Investors can get defensive with infrastructure by using exchange traded funds, such as the AGFiQ Global Infrastructure ETF (GLIF).
“The good news is Congress can and likely will address infrastructure needs through traditional legislative vehicles, but on a smaller scale relative to the transformative numbers targeted by the administration and some lawmakers,” according to The Hill.
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.
In the infrastructure space, there is a never-ending need for investments to update or repair aging communication, transportation, water and energy networks. According to American Society of Civil Engineers, existing U.S. infrastructure is crumbling and in need of major investment. Additionally, infrastructure as an asset class has long-term viability.
GLIF Still Has Potential
“In addition, President Trump can lead on infrastructure without Congress by making federal and federally assisted construction projects more affordable for taxpayers by cutting red tape and instituting common-sense regulatory reforms through executive action,” reports The Hill.
An estimated $79 trillion will be spent on global infrastructure from 2016 through 2040, but the investments still fall short by $15 trillion of the required $94 trillion needed.
Infrastructure developments are typically large, long in duration and capital-intensive, carrying a high overall cost. Nevertheless, the projects compensate investors by including fairly predictable expenditures to maintain the asset, as well as regulated pricing that typically provides stable and reliable cash flows. Select investors have long enjoyed the unique characteristics of infrastructure to diversify equity risk exposure, generate income and hedge against long-term inflation.
“Many states are already making infrastructure a priority by ensuring taxpayer investments in infrastructure are subject to robust competition and fiscal responsibility Americans deserve from government,” reports The Hill.
For more information on the infrastructure sector, visit our Infrastructure category.
