With so much talk about economic stimulus and infrastructure chatter heating up as Election Day draws near, the FlexShares STOXX Global Broad Infrastructure Index Fund (NYSEArca: NFRA) is a long-term idea with near-term credibility.
NFRA tries to reflect the performance of the STOXX Global Broad Infrastructure Index, which identifies equities that derive the majority of revenue from infrastructure business, providing exposure to not only infrastructure sectors, but non-traditional ones as well. Investors considering NFRA or any other infrastructure asset are betting this time will be different when it comes to policy execution and implementation.
“We are fighting some of the most challenging health and economic circumstances in our nation’s history and Congress is weighing the next stimulus,” according to Fortune. “If lawmakers want to spark the economy, quickly create many jobs, and do the most good for the greatest number of Americans, there’s one clear answer: infrastructure investment.”
NFRA’s index focuses on long-lived assets in industries with very high barriers to entry, with at least 50% of their revenue from key sectors with a 3-month average daily trending volume of at least $1 million. The portfolio is weighted based on a free-float market cap with certain constraints to limit exposure in any one security, sub-sector, or country. Additionally, the fund is rebalanced annually.
All About Politics
How infrastructure dollars are spent is equally as important as knowing those dollars are earmarked for infrastructure in the first place. During the 2016 presidential campaign, Trump promised to spend $1 trillion to shore up America’s sagging infrastructure, but politicians have clearly agreed to exceed that number. That promise is likely to be reiterated on the campaign trail this year.
“Yes, it’s August in an election year, but a post-pandemic stimulus shouldn’t wait until next spring. Most political leaders agree that we need to invest in infrastructure to goose the economy and create more jobs. We simply cannot let the political season interfere when both parties agree that it would be incredibly valuable to the country now and in the future,” according to Fortune.
Investors considering NFRA or any other infrastructure asset are betting this time will be different when it comes to policy execution and implementation. NFRA’s index focuses on long-lived assets in industries with very high barriers to entry, with at least 50% of their revenue from key sectors with a 3-month average daily trending volume of at least $1 million.
“Modernizing U.S. infrastructure ranks at or near the top of the list of actions needed to ensure our economy is resilient enough to adapt to future challenges,” reports Fortune.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.