Five Infrastructure ETFs Your Broker Forgot to Mention
For all the talk about supposed increases in infrastructure spending, both in the U.S. and abroad, infrastructure ETFs have been disappointments. In defense of this sub-sector, there have been plenty of disappointments in the market this year.
On the bright side, the disappointments with infrastructure ETFs may give way to opportunity for patient investors and that patience may be rewarded over the next year or two as global infrastructure spending really takes off.
Remember that earlier this year, Bank of America Merrill Lynch forecast that select emerging markets will need to spend about $6 trillion on infrastructure over just the next three years. Yeah, it's time to ask your broker why he forgot to tell you about these infrastructure ETFs.
SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: GII): Infrastructure normally isn't a sector for the most risk-averse investors, but GII is one infrastructure ETF your grandfather might like. Over 82% of GII's weight is allocated to the conservative utilities group and the ETF features a dividend yield of over 4%. That's enough to make you forget about the 0.59% expense and make you wonder why an ETF that's almost five years old has just $36 million in assets under management.
PowerShares Emerging Markets Infrastructure (NYSE: PXR): PXR takes the focus away from utilities and developed markets and puts its on industrials and materials names in the emerging markets. Even though China, Taiwan, South Africa and Brazil account for about 48% of PXR's weight, the ETF's top holding is a name familiar to U.S. investors: Dow component Caterpillar (NYSE: CAT). PXR also offers exposure to Indonesia, Malaysia and Chile, among other emerging markets.
EGShares India Infrastructure ETF (NYSE: INXX): Emerging Global Advisors offers a trio of emerging markets infrastructure ETFs, but INXX might just be the one to take a look because India's infrastructure has such a low starting point, it can't help but improve over the next few years. India apparently wants to do something about that and is devoting $1 trillion to infrastructure over the next five years. Consider devoting yourself to INXX above $15.
EGShares China Infrastructure ETF (NYSE: CHXX): Be careful with what you're ringing up with the EGShares China Infrastructure ETF. Pun intended because more than 18% of the ETF's weight is devoted to telecom stocks and the ETF's top two holdings are telecom names. Then again, perception is reality and China is a voracious infrastructure spender and that could be good news for CHXX.
EGShares Brazil Infrastructure ETF (NYSE: BRXX): Here is arguably the only thing you need to know about what the future may hold for the EGShares Brazil Infrastructure ETF: Latin America has the highest levels of infrastructure investments worldwide with over $450 billion of projects planned up until 2015, according to Investment Week.
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