Dating back to the 2016 presidential campaign, infrastructure investments have been receiving renewed attention. That theme is benefiting some ETFs, including the ProShares DJ Brookfield Global Infrastructure ETF (NYSEArca: TOLZ).
TOLZ “focuses on companies whose assets include airports, toll roads, ports, communications, electricity distribution, oil and gas storage and transport, and water in both developed and emerging markets. To be included in the index, companies must derive more than 70% of their cash flows from infrastructure assets. The index excludes companies that supply services such as construction and engineering to the infrastructure industry,” according to ProShares.
The ETF is up nearly 11% year-to-date. Going forward, the allure of infrastructure investing, which investors can easily engage in via exchange traded funds, could and should rise as governments around the world finally commit the capital necessary to upgraded dated and dangerous bridges, pipelines and roads.
The American Society of Civil Engineers calculated that the U.S. will fall $1.44 trillion short of the $3.32 trillion required to invest in infrastructure through 2025.
Municipalities have capitalized on the record low interest rates by issuing $67.3 billion in debt for infrastructure in the five months through May, the most since 2010. Over the past year, states have also increased spending on public construction to the most since 2010.
TOLZ, which holds nearly 140 stocks, is also a credible income idea as highlighted by a dividend yield of almost 4%. The ETF is a global fund with the U.S. accounting for almost half the fund’s weight. Nine other countries are represented in TOLZ, including a 15.6% weight to Canada.