With fall rapidly approaching, it won’t just be any other fall with U.S. President Donald Trump and Democratic hopeful Joe Biden vying to be the leader of the free world. With the election looming, exchange-traded fund (ETF) investors will want to keep a watchful eye on infrastructure-focused funds.
“There are two directions a national infrastructure program could take,” a FN Arena article by Richard Mills noted. “One is spearheaded by Joe Biden, the Democrats’ presumptive nominee to take on Trump in the November presidential election. Biden has just announced a $2 trillion climate plan, seeking to boost clean energy and rebuild infrastructure.”
“Trump also has infrastructure on his mind, but it would likely be more black and grey than green, focusing on road & bridge replacement, new water/ sewer infrastructure, public buildings, etc., with some funds set aside for 5G wireless infrastructure and rural broadband,” noted Mills. “Which one is better? Does Trump’s plan do enough to put America on the runway to a clean-energy, high-tech future? Is Biden’s ‘Build Back Better’ pie-in-the-sky rhetoric with no chance of passing an accounting analysis, let alone a room full of skeptical Republican lawmakers? Is the level of economic growth, and new jobs, likely to outweigh the risk of inflation, and higher debt loads incurred by a second wave of massive fiscal stimulus? How would all this new infrastructure be paid for? And of most interest to us, at AOTH, which metals should we be invested in, to prepare for the inevitable spending spree?”
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Build on These Infrastructure ETFs
One fund to check out is the Global X U.S. Infrastructure Development ETF (PAVE ). PAVE seeks to provide investment results that correspond generally to the price and yield performance, of the Indxx U.S. Infrastructure Development Index. The fund invests at least 80% of its total assets in the securities of the underlying index. The underlying index is designed to measure the performance of U.S. listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.
Another fund to check out is the FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA ). 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.
