Amid expectations for increased global spending, infrastructure investments, including ETFs, are receiving renewed attention. However, not all infrastructure ETFs are created equal.
The SPDR Kensho Intelligent Structures ETF (NYSEArca: XKII) is an example of next generation infrastructure investing. The Kensho Intelligent Structures ETF follows companies whose products and services are driving innovation behind intelligent infrastructure, such as smart building infrastructure, smart power grids, intelligent transportation infrastructure, and intelligent water infrastructure.
XKII, which debuted last December, follows the Kensho Intelligent Infrastructure Index. That index “is designed to capture companies whose products and services are driving innovation behind intelligent infrastructure, which includes the areas of smart building infrastructure, smart power grids, intelligent transportation infrastructure, and intelligent water infrastructure,” according to State Street Global Advisors (SSgA).
“Infrastructure is evolving far beyond the traditional roads, bridges, and tunnels of yesterday. From a global perspective, McKinsey & Company estimates the world needs to invest $3.3 trillion annually in infrastructure to meet global annual GDP growth forecasts of 3.3% by 2030, an increase from the current $2.5 trillion,” said SSgA in a recent note.
Examining XKII
XKII holds 45 stocks from 15 industry groups, giving the ETF a broad-based, modern approach to the infrastructure investment theme.