To kick off Infrastructure Week, the White House has announced that 4,300 projects with more than $110 billion in funding are underway to fix deteriorating roads, improve the electrical grid, and expand broadband internet. This announcement comes six months after President Joseph Biden signed his $1 trillion infrastructure package.
CBS News is reporting that White House senior adviser Mitch Landrieu said the roads, bridges, and other projects are laying “a foundation for tremendous growth into the future.”
“I think that if Americans step back, we will all have to admit that for the last 50 years we’ve had the need to do this and we haven’t found the will or the way to get it done,” Landrieu added.
After decades of neglect, the need to ramp up spending on infrastructure is coming to the forefront as economic growth is being realized globally. According to FlexShares, infrastructure assets are mission-critical capital projects that move people, energy, goods, and data and earn fees for their use through contracts and concessions.
As more governments are investing in infrastructure, so too have more investors been allocating to infrastructure. So, investors looking to diversify and hedge their portfolios may want to consider the FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) as both a real asset and an equity holding.
NFRA seeks investment results that generally correspond to the price and yield performance (before fees and expenses) of the STOXX Global Broad Infrastructure Index. The index reflects the performance of a selection of companies that, in aggregate, offer broad exposure to publicly traded developed and emerging market infrastructure companies, including U.S. companies, as defined by STOXX Ltd. pursuant to its index methodology.
“As the world’s population grows, virtually every country faces pressure to upgrade existing infrastructure or launch new developments,” said FlexShares. “We believe that this trend may offer an opportunity for investors seeking to diversify their equity portfolios and generate income that tends to react positively to inflationary threats.”
Added FlexShares: “Because infrastructure is often an essential service in various economic environments, historically stocks in that asset class tend to have predictable cash flows. Returns are typically sheltered from inflation, since infrastructure operators often pass cost increases to their users. Infrastructure stocks also have historically produced returns that are less correlated with other asset classes.”
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