“Stretching for yield – we all know the trouble that can get you in. It can get you in companies that are, you know, having issues because that’s why their price is so low, or at the very least, getting into stuff that’s cyclical interest-rate sensitive. We think a better opportunity to find a little bit of extra yield these days is in infrastructure investment,” Simeon Hyman, Global Investment Strategist, ProShares, said at the Inside ETFs conference.
Specifically, investors looking to reduce correlations to traditional assets while boosting yield gaining some downside protection in the currently rough market environment may want to consider the ProShares DJ Brookfield Global Infrastructure ETF (NYSEArca: TOLZ).
The ProShares DJ Brookfield Global Infrastructure ETF provides exposure to airports, toll roads, ports, communications, electricity distribution, oil and gas storage, and transport, and water in both developed and emerging markets. The underlying index also excludes companies that supply services such as construction and engineering to the infrastructure industry.
One of the advantages of infrastructure is that regardless of what the global economy is doing, it’s a necessity. It’s also less prone to the cyclical movements of the economy, which makes it a viable alternative as a defensive play.
Furthermore, 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.
Watch Simeon Hyman Talk Infrastructure:
For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.