SPDR S&P Global Infrastructure ETF (ARCA: GII)

SPDR S&P Global Infrastructure ETF (ARCA:GII), Quote.Headers.trade-ideas

SPDR S&P Global Infrastructure ETF

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The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in depositary receipts based on securities comprising the index. The index is comprised of 75 of the largest publicly listed infrastructure companies that meet specific investability requirements.

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A look at two key items that Joe Biden could highlight his thoughts on ahead of the 2024 presidential election to defeat Donald Trump.

Biden Trails Trump In Polls: Democrat Experts Pick 2 Big Issues For President To Win 2024 Election

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Will Infrastructure ETFs Get A Boost From Trump&#39;s Plan?

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Shovel Ready: Looking At Infrastructure ETFs

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President Joe Biden is one of the front-running candidates in the <a href="https://www.benzinga.com/topic/2024-election">2024 presidential election.</a>
A potential rematch with Donald Trump could spell trouble, with the former president polling ahead of Biden in recent months.
Experts for the Democratic party lay out two items that Biden should focus on.
Betting on Infrastructure: Biden trails Trump in many 2024 election polls and recently saw his approval rating hit <a href="https://www.benzinga.com/general/politics/23/11/35880446/joe-biden-celebrates-81st-birthday-with-new-lows-in-approval-ratings">an all-time low.</a>
To gain momentum and win the 2024 election, political experts are laying out what items the president should spend more time focusing on.
One area that is getting increased attention is infrastructure, according to a <a href="https://punchbowl.news/article/democrats-push-infrastructure-accomplishments-biden-2024/">report </a>from Punchbowl News.
The second anniversary of the Bipartisan Infrastructure Law was recently celebrated by individuals, including White House senior adviser Mitch Landrieu.
Landrieu is now working with Rep. Steny Hoyer (D-Md.) on making sure voters remember the $1.2 trillion bill that powered investments into roads, bridges and transportation systems in the United States.
"Two years ago, there was nothing. We started off from ground zero," Landrieu told Punchbowl News. "Now there's $1.2 trillion &#8211; $400 billion of which has been pushed out of the door already."
Landrieu said there have been 40,000 projects that have come from the bill.
Hoyer called the bill as "generational" and "transformative."
With some polls saying Biden has accomplished little to nothing during his presidency, Hoyer believes the infrastructure bill and subsequent projects being funded could be a way to highlight what the president has done.
"They thought we didn't do much in the last Congress. In fact, it was probably one of the most impactful congresses in history," Hoyer said. "The American people need to know the consequences of the actions taken in the last Congress because it's going to make such a difference over generations."
Hoyer also highlighted the American Rescue Plan, the Inflation Reduction Act and the CHIPS and Science Act, which were all signed during the last Congress, which was Democratic-controlled.
A team of House Democrats led by Hoyer have formed the Regional Leadership Council and have discussed a messaging strategy with the White House on infrastructure highlights.
Whether Biden or the White House chooses to aggressively highlight the infrastructure bill and the projects being funded, investors may want to consider exposure to the sector. With numerous companies that could benefit from increased infrastructure spending, exchange-traded funds that hold a basket of companies could be the best way to play this item.
Here's a look at some of the biggest infrastructure ETFs.
<ul>
<li>Global X U.S. Infrastructure Development ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/PAVE#BATS">PAVE</a>)</li>
<li>iShares Global Infrastructure ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IGF#NASDAQ">IGF</a>)</li>
<li>iShares U.S. Infrastructure ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IFRA#BATS">IFRA</a>)</li>
<li>SPDR S&amp;P Global Infrastructure ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GII#NYSE">GII</a>)</li>
<li>ProShares DJ Brookfield Global Infrastructure ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TOLZ#NYSE">TOLZ</a>)</li>
</ul>
Related Link: <a href="https://www.benzinga.com/general/sports-betting/23/11/35885737/2024-presidential-election-betting-odds-trump-the-favorite-newsom-gains-haley-soars-higher">2024 Presidential Election Betting Odds</a>
Social Security Key 2024 Item: Another item being discussed as a key item that Biden could focus on to defeat Trump is social security.
The White House has received pitches for Biden to go big on the topic, according to <a href="https://www.politico.com/news/2023/11/20/joe-biden-social-security-00128158">Politico</a>.
Biden often recalls his State of the Union address where he accused Republican lawmakers of cutting items like Social Security, which prompted objections during his speech.
"I never thought my third State of the Union address would be negotiated on the floor of the United States Congress," Biden previously said. "But it worked."
Biden has been pitched on endorsing a plan to expand the Social Security benefits from Americans, according to the report. For some voters, Social Security is an important issue that could see the candidate who has the best plan communicated get their vote.
"The only weakness that Democrats have on their Social Security policies is not enough people know that it's them," Social Security Works executive director Alex Lawson said.
Lawson, whose group had pushed for Biden to endorse the idea, said that it's important to let voters know that Democrats want to expand Social Security and Republicans want to cut.
Biden previously discussed expansion of Social Security benefits during the 2020 Democratic primary.
Republican presidential candidates like Trump, Ron DeSantis and Nikki Haley are <a href="https://www.benzinga.com/general/politics/23/03/31207642/desantis-a-wheelchair-over-the-cliff-kind-of-guy-heres-what-trumps-latest-insult-means">expected to push</a> for cuts to Social Security.
Read Next: <a href="https://www.benzinga.com/general/social-media/23/11/35858348/is-joe-biden-joining-tiktok-how-the-move-could-help-with-2024-election-cause-controversy-wit">Is Joe Biden Joining TikTok: How The Move Could Help With 2024 Election, Cause Controversy With Calls To Ban App</a>

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G-III Apparel Group Sees Q1 GAAP EPS $0.05-$0.15, Sales $460M vs $477.41M Est.

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Shares of several specialty retail and apparel companies are trading lower. Weakness appears related to resurgence of US coronavirus cases, which has led to Texas halting further phases of the state's reopening process and caused concerns of further re-closings.

Needham analyst Rick Patel maintains SPDR S&amp;P Global Infrastructure ETF (NYSE:<a class="ticker" href="/stock/GII#NYSE">GII</a>) with a Buy and lowers the price target from $32 to $21.

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Needham Maintains Buy on SPDR S&P Global Infrastructure ETF, Lowers Price Target to $21

The promise was for a $1-trillion infrastructure plan from Trump&#39;s campaign days but the actual plan launched lately is a $200-billion federal infrastructure plan, which comprises below-mentioned areas:
<ol>
<li>
		$100 billion in matching grant would go to states and cities on new, <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">less-generous terms</a>.</li>
<li>
		$50 billion rural block grant program that will be available to states based on the length of rural roads and the level of rural inhabitants.</li>
<li>
		Around $20 billion for &quot;projects of national significance&quot; meaning &quot;projects that can lift the American spirit, that are the next-century-type of infrastructure as opposed to just rebuilding what we have currently.&quot;</li>
<li>
		Additional &quot;$20 billion in fund <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">would go to federal loan programs</a> that underwrite private financing of profitable infrastructure projects.&quot;</li>
<li>
		Plus, there&#39;s a $10-billion capital financing program that would finance the construction of federal office buildings and similar infrastructure for actual government use.</li>
</ol>
Per <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">an article published</a> on VOX.com, &quot;federally funded highways are financed on the basis of an 80-20 federal-state split.&quot; Trump&#39;s proposal is to reverse the 80-20 formula and call for states and cities to dole out at least $4 for every $1 in federal money they get. Some experts believe that the current formula results in &quot;over-investment in new highway projects with little transportation value.&quot;&nbsp;
The overall plan is supposed to lure private companies to come up of the groundwork and reconstruct America to the extent of $1.5 trillion <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">over the coming 10 years</a>. However, <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">sources believe that</a> private investors are less likely to be drawn to this project.
Investors should also note that the Trump administration did not roll out a separate infrastructure proposal, rather it came with a budget package &quot;that would also <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">cut $48 billion in federal funding</a> for other programs and services.&quot;
The vox.com article indicated that Republican administrations are known for proposing big initiatives that are intended to be funded by increasing budget deficits. George W. Bush&#39;s 2001 tax cuts, 2003 tax cuts and Medicare expansion as well as Trump&#39;s 2017 tax cuts and his big increase in military spending have been held as examples for this Republican tendency by vox.com.
Any Bright Side? 
There is an initiative that would save $350 billion for drinking water pipes to guarantee that there is no another Flint, Michigan-style water crisis in the coming few years. This single initiative grossed more federal funds than the entire infrastructure plan. So, water ETFs like PowerShares Water Resources PHO and First Trust ISE Water Index Fund FIW should benefit from this plan.
As long as infrastructure ETFs are concerned, there are less likely to get a boost as financing would be a big issue. Still, investors can keep a tab on funds like Global X U.S. Infrastructure Development ETF PAVE, ProShares DJ Brookfield Global Infrastructure ETF TOLZ and SPDRS&amp;P Global Infrastructure ETF GII.
Transportation ETFs like iShares Transportation Average ETF IYT and SPDR S&amp;P Transportation ETF XTN should also be closely watched.
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Will Infrastructure ETFs Get A Boost From Trump's Plan?

Infrastructure exchange traded funds can tempt investors and it is easy to see why. Headlines and media reports pertaining to infrastructure spending rarely contain small numbers. Large developed and emerging economies can spend hundreds of billions of dollars on infrastructure spending in just a few years.

	For example, earlier this year, President Barack Obama pushed an infrastructure structure budget that called for spending for $468 billion over six years. Global infrastructure spending from 2014 through 2025 could reach a whopping $78 trillion, the <a href="http://www.wsj.com/articles/benefits-of-infrastructure-spending-not-so-clear-cut-economists-say-1422819575">Wall Street Journal</a> reports, citing Oxford Economics and consultancy PwC.

	However, government largess when it comes to infrastructure is not a guarantee that the related ETFs will reward investors. Over the past year, the iShares Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/igf#NYSE">IGF</a>) and the SPDR S&amp;P Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>) are each down nearly 14 percent.

	Related Link:<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5819082/buying-currency-hedged-europe-etfs-on-the-dip"> Buying Currency Hedged Europe ETFs On The Dip</a>

	&ldquo;S&amp;P Capital IQ Equity Analyst Jim Corridore thinks that companies that construct infrastructure are likely to see increased demand over the next several years due to the need for upgrade and expansion of infrastructure both within the U.S. and around the world. Within the U.S., aging and outdated roads, electric transmission grids, and energy transmission facilities are in dire need of repair and replacement, according to Corridore. Meanwhile pipelines, water treatment, and rail are seeing increased demand and need for expansion,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Tuesday.

	Prior to getting involved with either ETF, investors need to do some homework. As their names imply, GII and IGF are global funds. GII, the State Street offering, is, in theory, highly levered to U.S. infrastructure spending because the US is over 35 percent of the ETF&#39;s country weight. That is more than quadruple the weight allocated to Italy, GII&#39;s second-largest country exposure.

	Overall, GII features exposure to 19 countries, only four of which are emerging markets. At 5.3 percent of GII&#39;s weight, China is the ETF&#39;s largest emerging market weight. That is something to consider because for the 20 years ended 2011, China spent an average of 8.5 percent of annual GDP on infrastructure projects, more than the triple the percentages of spent in the US and the European Union.

	The S&amp;P Global Infrastructure index generated a 9.6% annualized return in the three-year period ended July 2015. However, given the strength in the US dollar relative to most currencies in the last three years, many currency hedged international approaches have outperformed those that hold just the local shares. This is one of those examples, where the currency neutralized infrastructure index was even stronger with a 13.0% three-year return. On a calendar year basis, the hedged index outperformed in 2013 and 2014, after underperforming in 2012,&rdquo; said S&amp;P Capital IQ.

	The nearly $1.1 billion iShares Global Infrastructure ETF tracks the same index as its SPDR rival, explaining why the ETFs&#39; returns have mirrored each other over the past year. GII charges 0.4 percent per year compared to 0.47 percent per year for IGF. That difference does not sound significant, but it will be for investors looking to buy and hold either of these funds for multi-year holding periods.

	Investors looking to mitigate currency risk with their infrastructure ETF can consider the newly minted Deutsche X-trackers S&amp;P Hedged Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/dbif#NYSE">DBIF</a>). DBIF, which debuted in April, tracks an index that is the currency hedged equivalent of the benchmark followed by GII and IGF.

	Due to dollar&#39;s recent decline and the US accounting for over 35 percent of its weight, DBIF has slightly outperformed its unhedged rivals over the past month.

G-III Apparel Group, Ltd. (NASDAQ: <a class="ticker" href="/stock/giii#NASDAQ">GIII</a>) gained 6 percent after the bell Tuesday to $63.53. The New York-based maker of clothing and accessories posted first quarter results and an improved outlook.

	Wi-LAN Inc. (NASDAQ: <a class="ticker" href="/stock/wiln#NASDAQ">WILN</a>) gained about 3.7 percent after hours to $2.53. The intellectual property licensing company closed up about 15 percent earlier on news it had acquired a patent portfolio from Infineon Technologies AG (OTC: <a class="ticker" href="/stock/ifnny#OTC">IFNNY</a>) for $33 million.

	Ambarella Inc&nbsp;(NASDAQ: <a class="ticker" href="/stock/amba#NASDAQ">AMBA</a>) gained about 1.6 percent to $93.70 after the company posted first quarter results.

	HollyFrontier Corp&nbsp;(NYSE: <a class="ticker" href="/stock/hfc#NYSE">HFC</a>) rose nearly 1 percent after the bell Tuesday. The Dallas-based petroleum refiner didn&#39;t issue any news.

	Ocean Rig UDW Inc&nbsp;(NASDAQ: <a class="ticker" href="/stock/orig#NASDAQ">ORIG</a>) sank nearly 8 percent to $7.45 after the company announced a stock offering.

	Violin Memory Inc&nbsp;(NYSE: <a class="ticker" href="/stock/vmem#NYSE">VMEM</a>) scrapped down more than 11 percent to $2.80. The provider of flash-based storage systems posted disappointing quarterly results.

	MediWound Ltd&nbsp;(NASDAQ: <a class="ticker" href="/stock/mdwd#Nasdaq">MDWD</a>) fell more than 5 percent to $5.12 in extended trading. The Israel-based biopharmaceutical company didn&#39;t issue news Tuesday.

	NCI Building Systems Inc&nbsp;(NYSE: <a class="ticker" href="/stock/ncs#NYSE">NCS</a>) fell 3.8 percent to $14.55 after the bell. The building components manufacturer posted fiscal second quarter results and an outlook

	Cencosud SA (NYSE: <a class="ticker" href="/stock/cnco#NYSE">CNCO</a>) dipped 3.8 percent to $7.50 in the extended session. The South American retailer didn&#39;t issue any news.

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Investors searching for income are increasingly looking for ways to diversify their investments outside the traditional methods of bonds and dividend paying stocks.&nbsp;

	With that goal in mind, Guggenheim Investments recently launched the Guggenheim S&amp;P High Income Infrastructure ETF (NYSE: <a class="ticker" href="/stock/ghii#NYSE">GHII</a>).&nbsp;

	This ETF is the first of its kind to focus on global infrastructure-related industries such as public services, toll roads, airports, water, and other essential services with a yield-weighted index methodology.

	What this means is - the 50 underlying high dividend infrastructure companies in GHII are ranked according to their yields rather than market cap or other fundamental criteria.&nbsp;

	This places a more prominent focus on high income MLPs and other dividend-generating asset classes rather than larger traditional utility companies.&nbsp;

	At launch, GHII included just a 20 percent allocation to the United States, while the rest of the fund was spread out over both developed and emerging market foreign nations.&nbsp; &nbsp;

	Australia and China make up the second and third highest allocations within the index.&nbsp;

	This strategic income ETF will carry an expense ratio of 0.45 percent and dividends will be paid quarterly to shareholders.

	According to the <a href="http://guggenheiminvestments.com/products/etf/ghii/literature">press release</a>, &ldquo;Global infrastructure securities represent a unique opportunity to invest in an important and growing asset class,&rdquo; said William Belden, Managing Director of Product Development for Guggenheim Investments. &ldquo;One of the attractive investment features of infrastructure companies is their comparatively stable yield regardless of market or business cycles.&rdquo;

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/15/02/5232788/2-unlikely-year-to-date-etf-performance-leaders">2 Unlikely Year-To-Date ETF Performance Leaders</a></bzrelatedlink>

	While current yield statistics on GHII were not immediately available, other funds in this space such as the iShares Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/igf#NYSE">IGF</a>) have their 30-day SEC yield listed at 2.90 percent.&nbsp;

	However, with the yield-weighted asset allocation criteria, it would not be surprising to see GHII with a far higher income level.

	Other competitors in this space include the ProShares DJ Brookfield Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/tolz#NYSE">TOLZ</a>) and SPDR S&amp;P Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>).&nbsp;

	Each ETF has a slightly variant take on its underlying holdings, expense ratios, and yield.

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GHII

Guggenheim Launches New Income-Focused Infrastructure ETF

Investors have an increasing number of ETF options for generating income and finding decent yields. 

The proliferation of <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3346880/under-the-hood-a-new-dividend-etf-diva">dividend ETFs and scores of new bond funds</a> has certainly helped matters.

No longer are investors forced to view the 2.07 trailing 12-month yield on the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) as "good." Likewise, enduring <a href="http://us.ishares.com/product_info/fund/overview/TIP.htm">a negative 30-day SEC yield</a> with the iShares Barclays TIPS Bond Fund (NYSE: <a class="ticker" href="/stock/tip#NYSE">TIP</a>) is not necessary, either.

Along those lines, the hunt for yield can, and arguably should, extend beyond bond funds or those ETFs with "dividend" or "income" in their titles. In fact, investors can find some decent yields in a number of surprising ETF destinations, such as the following.

Guggenheim Frontier Markets ETF (NYSE: <a class="ticker" href="/stock/frn#NYSE">FRN</a>)
The Guggenheim Frontier Markets ETF is by no means an unknown or small ETF. FRN has almost $164 million in assets under management and the broadening appeal of the frontier markets investment theme has turned some attention to FRN and comparable funds.

However, one thing that FRN is known is not being all that heavy on frontier markets. Chile and Colombia, both classified as emerging markets by most major index providers, combine for 68 percent of the fund's weight. Egypt and Peru, another pair of emerging markets, combine for 19 percent. Argentina at 7.92 percent is FRN's largest true frontier market weight. 

Those that can passed the name deception with FRN will be rewarded with a trailing 12-month yield of three percent and a beta <a href="http://guggenheiminvestments.com/products/etf/frn">of just 0.75 against the S&amp;P 500</a>.

SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>)
Investing in the international infrastructure spending boom with select infrastructure ETFs has proven to be a vexing proposition for some investors. 

In some cases, a <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3331152/thailand-etf-could-benefit-from-infrastructure-bonanza">country-specific fund</a> with industrial and materials exposure has proven to be the better bet.

GII has not been an exception, having lost almost six percent in the past two years. In defense of this fund, it has recently shown signs of life, rising 4.1 percent in the past 90 days. 

The yield of <a href="https://www.spdrs.com/product/fund.seam?ticker=GII">almost 3.2 percent</a> provided some compensation to the patient investor while the heavy emphasis on utilities allows for a beta of just 0.43 and annualized volatility of 11.79.

iShares MSCI Pacific ex-Japan Index Fund (NYSE: <a class="ticker" href="/stock/epp#NYSE">EPP</a>)
As measured by the iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>), yields on Japanese stocks lag those found in other developed markets. 

For example, EWJ's trailing 12-month yield of 1.89 percent puts it behind SPY and the comparable Canada and Germany ETFs.

Comparing Japanese dividend yields to developed markets in the Asia-Pacific region leads to an even more glaring chasm. Bolstered <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3349835/new-zealand-etf-falls-despite-intervention-comments">in large part by strong currencies</a>, Australian and New Zealand dividend yields are impressive. Those two countries combine for nearly 65 percent of the iShares MSCI Pacific ex-Japan Index Fund's weight.

Singapore, another 12.6 percent of EPP's is a fair yield destination as well, proven by the almost four percent trailing 12-month yield on the iShares MSCI Singapore Index Fund (NYSE: <a class="ticker" href="/stock/ews#NYSE">EWS</a>). Combine those factors and EPP, which has $4.3 billion in assets under management, features a trailing 12-month yield of almost 4.1 percent.

For more on international ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3357973/are-global-health-care-etfs-worth-prescribing">here</a>.

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Cycles can be virtuous. Politics, not so much, but there is no getting around the power of the presidential cycle when it comes to investing. At its core, the presidential cycle tells us that the stocks perform better in years three and four of a presidential because the party in power is looking to keep that power by juicing the economy.

Let's be honest. Government largess in the essence of getting reelected is really no more than an indirect bribe aimed at voters, but that's kind of how the two party cookie crumbles in the U.S. 

Another, more important reality is that the S&amp;P 500's returns in years three and four of the presidential cycle since 1970 are more than double the returns found in years one and two. So scoffing at the presidential cycle is foolhardy to say the least. 

Here's to hoping this year's election is close and that President Obama is pressed into stimulating the economy to keep his job. The following ETFs may just benefit under that scenario.

Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>)
KOL has a lot of possibilities <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2381159/the-rick-santorum-etf-portfolio-kol-pbs-iyz">this election year</a> but the ETF's start to 2012 has been a disappointment. KOL, normally known for its high beta reputation, has lagged the S&amp;P 500 year-to-date. Electric utilities are turning to cheaper, cleaner natural gas and that's hurting KOL and its constituents.

Still, it's not a stretch to envision KOL at least getting a rhetoric bounce. After all, look at the major coal producing states in the eastern part of the U.S. Almost all of them are pivotal swing states. Bet on at least one candidate saying something to warm the ears of coal miners and their employers.

SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>)
Remember all that talk in the early part of the Obama Administration about "shovel ready" jobs? It's debatable whether or not that ever materialized, but should the President need to boost the economy to get reelected, he could take a page from China's book and go the infrastructure route. Many of the infrastructure ETFs on the market today are more focused on emerging markets, but the SPDR FTSE/Macquarie Global Infrastructure 100 ETF is more than 47% allocated to the U.S. and the ETF just made a golden cross.

Market Vectors Agribusiness ETF (NYSE: <a class="ticker" href="/stock/moo#NYSE">MOO</a>)
Sometimes, it's easy to overlook how important farming is to the U.S. economy. Hey, it's called the "non-farm" payroll number, right? Well agribusiness is big business and farmers are a powerful voting block. Throw Illinois and Minnesota to Obama and Kansas and Nebraska to his challenger and we're still left with several Midwest swing states that full of farmers and ag-related businesses. 

MOO is already off to a good start this year, but further efforts to buy votes, er, stimulate the economy in the Midwest could easily benefit this ETF.

PowerShares QQQ (Nasdaq: <a class="ticker" href="/stock/qqq#Nasdaq">QQQ</a>)
Any tech ETF heavy on the usual suspects could go here, but we'll opt for QQQ. We'll explain with some free campaign advice to anyone smart enough to listen: How about throwing a bone to cash-rich tech titans like Apple (Nasdaq: <a class="ticker" href="/stock/aapl#Nasdaq">AAPL</a>), Microsoft (Nasdaq: <a class="ticker" href="/stock/msft#Nasdaq">MSFT</a>) and friends by lowering the tax rate on the tens of billions of dollars they keep offshore? Cut a deal with these companies that allows them to repatriate that money to the U.S. at a favorable tax rate if a certain percentage of those funds are used to create U.S. jobs and/or pay and increase dividends. 

It's almost too much common sense for anyone in Washington, D.C. to execute, but we can hope, right?

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4 ETFs For The Presidential Cycle (MOO, QQQ, KOL)

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: <a class="ticker" href="/stock/gii#NYSE">GII</a>):
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: <a class="ticker" href="/stock/pxr#NYSE">PXR</a>):
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: <a class="ticker" href="/stock/cat#NYSE">CAT</a>). PXR also offers exposure to Indonesia, Malaysia and Chile, among other emerging markets.

EGShares India Infrastructure ETF (NYSE: <a class="ticker" href="/stock/inxx#NYSE">INXX</a>):
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: <a class="ticker" href="/stock/chxx#NYSE">CHXX</a>):
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: <a class="ticker" href="/stock/brxx#NYSE">BRXX</a>):
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.

Emerging Global Shares INDXX Brazil Infrastructure Index Fund

BRXX

Emerging Global Shares INDXX China Infrastructure Index Fund

CHXX

Emerging Global Shares INDXX India Infrastructure Index Fund

INXX

PowerShares Emerging Infrastructure Portfolio

Five Infrastructure ETFs Your Broker Forgot to Mention

The reality is the employment situation in the U.S. is not good at the moment. August's jobs report says as much and another unfortunate reality is that President Obama's much-anticipated jobs speech on Thursday night will not do much to help the unemployed overnight.

That said, if lawmakers can reach some kind of consensus on what it will take to get employers hiring again, there are some ETFs that could benefit over the longer-term. Here are a few to keep an eye on following the President's speech and over the next several months as the folks on Capitol Hill try their best to create jobs so they can stay employed themselves.

Guggenheim Solar ETF (NYSE: <a class="ticker" href="/stock/tan#NYSE">TAN</a>):
We all know that President Obama is a big fan of alternative energy, including solar. The mere fact that the solar industry has a supporter in the White House hasn't been enough to support TAN though. This ETF has one of the worst charts out there and over the past few months when it looked like things couldn't get any worse for this ETF, they did. Still, TAN moves enough on a percentage basis and is now so cheap by price that it at least makes for a good trade.

SPDR FTSE/Macquarie Global Infrastructure ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>):
GII does represent a global play on the infrastructure theme, but about 46% of the ETF's weight is allocated to the U.S. The U.S. is in dire need of infrastructure improvements and this is one area where jobs can be created almost immediately. Expect Obama to make some comments that could prove useful for infrastructure stocks and ETFs.

Market Vectors Steel ETF (NYSE: <a class="ticker" href="/stock/slx#NYSE">SLX</a>):
SLX is a unique combination of the potential that GII also has to benefit from the President's job creation efforts while facing an ugly technical situation much like TAN. If the President wants to gain some favor in the key steel-producing states, most of which are critical toss-up states in the electoral college, saying AND doing something to help U.S. steelmakers would be a wise move. And yeah, it would be good news for SLX, which appears to have found firm support at $50.

iShares Dow Jones US Oil Equipment Index Fund (NYSE: <a class="ticker" href="/stock/iez#NYSE">IEZ</a>):
It probably pains a lot of folks around the White House to admit it, but another reality is that when it comes to private sector job creation, oil services companies have a lot to offer. Just look at Halliburton's (NYSE: <a class="ticker" href="/stock/hal#NYSE">HAL</a>) recent announcement. Obama may not be the biggest fan of the oil industry, but at this point, his hand is forced and he needs jobs to be created from any sector that will create them. Oil services companies will oblige and with good-paying jobs, too.

Events

Economics

iShares Dow Jones US Oil Equipment & Services Index Fund

Four ETFs For President's Obama's Job Speech

According to a new report from The Brattle Group, investment in power transmission infrastructure will reach $16 billion per year in the U.S. and $5 billion annually in Canada, through 2030. Since the 1980s and the adoption of cell phones, iPads, computers and other "modern" conveniences, peak power demand has exceeded transmission growth by 25% each year. While the grid functions almost all of the time, it's far from perfect. Power interruptions and blackouts cost the American economy between $80 and $150 billion a year in lost productivity. Based on 1960s technology, the grid is essentially an antique and is nearly 100 years old in places. 

The recent report highlights the continued potential of North America's grid build-out. Brattle estimates that the U.S. will see $30 to $40 billion in annual economic activity and support 150,000 to 200,000 full-time jobs each year over the 20-year period. For Canada, the grid infrastructure investment will support between 20,000 and 50,000 full-time jobs annually. 

For investors, these sorts of big spending numbers means loading up on infrastructure stocks. The First Trust NASDAQ Clean Edge Smart Grid Infrastructure (NASDAQ: <a class="ticker" href="/stock/grid#NASDAQ">GRID</a>), First Trust ISE Global Engineering &amp; Construction (NYSE: <a class="ticker" href="/stock/flm#NYSE">FLM</a>) and the SPDR FTSE/Macquarie Global Infrastructure 100 (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>) make compelling choices to play the theme.

Analyst Color

Contracts

Press Releases

First Trust ISE Global Engineering &nstruction Index Fund

First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index Fund

GRID

Grid Investment Will Hit $300 Billion In The U.S. And Canada (GRID, FLM, GII)

Just a few days removed from the largest earthquake on record to rock Japan and the subsequent tsunami that has led to a death toll in the thousands, it probably is early to be bullish on anything related to Japan. 

The savagery wrought on Japan's equity markets the past two days highlights as much, but failure to prepare is preparing to fail, especially in the financial markets, so why not have a look at a few <a href="http://marketbulletin.com/etf.php">ETFs</a> that could benefit as Japan emerges from this tragedy and attempts to restore some lost luster to the world's third-largest economy?

1) iShares S&amp;P Global Infrastructure Index Fund (NYSE: <a class="ticker" href="/stock/igf#NYSE">IGF</a>): Infrastructure ETFs are likely to be one of the first stopping points for investors looking to profit from Japan's rebuilding efforts and IGF offers 6.4% exposure to Japan. That may not sound compelling, but IGF does offer significant exposure on a combined basis to some of Japan's major trading partners including Australia, Canada and the U.S.

2) SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>): We include GII on our list for the same reasons that IGF appears, but this ETF offers a weight of over 10% to Japan, so it might be the better play for those looking to decide between this fund and IGF. Be aware that more than three-quarters of GII's is devoted to utilities of some stripe and that diminishes the infrastructure impact here.

3) IQ Australia Small Cap ETF (NYSE: <a class="ticker" href="/stock/kroo#NYSE">KROO</a>): We highlighted KROO on Monday as a low-volume ETF to watch, but did you know that Australia is Japan's top trading partner among the G10 nations? With KROO's exposure to energy and materials, the ETF could prove to be a nifty play on Japan's rebuilding efforts.

4) Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>): Before tragedy struck Japan, the country got 18% of its power from nuclear and 25% from coal. The former is obviously going to dwindle in the near-term while coal could be one energy source Japan looks to keep its economy moving. That is a scenario that should benefit KOL's constituents.

Pre-Market Outlook

KROO

Four ETFs For Japan's Rebuilding Efforts

There are more than half a dozen infrastructure funds and despite targeting the same theme they are quite different.

Infrastructure ETFs - A Look Under the Hood

Cam Hui from <a href="http://humblestudentofthemarkets.blogspot.com/2010/10/know-where-your-edge-is-before-you-bet.html">Humble Student of the Market</a> posted a recap and link to an article from the Global &amp; Mail <a href="https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20100925/GIBUYSIDE0924ATL">by Avner Mandelman</a> that made the case for a diversified portfolio only having 15-20 holdings. The number is not particularly shocking but I thought it might be interesting to deconstruct that number to see if it is practical for do-it-yourselfers and to see what it might look like broadly speaking.
The idea with a small number, although not how it was stated in the article, is to "put all your eggs in one basket and then watch the basket very closely." This can be an effective use of time because it is easier to keep tabs on 15 or 20 holdings than 50. The article cites research from Meir Statman that concludes there are diminishing returns from diversification passed 16 holdings.
So if one builds a portfolio at the sector level and uses the S&amp;P 500 as a benchmark then I suppose there could be as few as ten holdings--there are ten big sectors in the SPX. If one simply buys each Sector SPDR in proportion with the SPX then all that has been done is to recreate the benchmark expensively but that is the starting point for construction of a portfolio; here is the index what are you going to do differently?
So without worrying about specific proportion versus the index (which quickly becomes a compliance issue) one can look at each sector and decide whether they are better off with the SPX components from that sector, this is what the Sector SPDRs own, or some other ETF (for this part of the post lets just focus on ETFs). For example, instead of the Utility Sector SPDR (<a class="ticker" href="/stock/xlu#">XLU</a>) someone might feel that the SPDR Global Infrastructure ETF (<a class="ticker" href="/stock/gii#">GII</a>) which is about 85% utilities without much overlap with XLU or maybe the SPDR International Utilities ETF (<a class="ticker" href="/stock/ipu#">IPU</a>) would be better.
<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_7ZckZ-8naz0/TKqBuYmvWDI/AAAAAAAADj8/ghegqfF2xNc/s1600/bolivia.jpeg"><img style="float: left; margin: 0pt 10px 10px 0pt; cursor: pointer; width: 283px; height: 320px;" src="http://1.bp.blogspot.com/_7ZckZ-8naz0/TKqBuYmvWDI/AAAAAAAADj8/ghegqfF2xNc/s320/bolivia.jpeg" alt="" id="BLOGGER_PHOTO_ID_5524370526802237490" border="0" /></a>Each sector could be studied to assess where value might be added versus the Sector SPDR. I would note that value could be solely seeking outperformance or looking for a risk adjusted result. The example above with utilities covers the fund-ground that one could explore; plain vanilla with XLU, plain foreign with IPU and a niche or theme with GII.
The idea of adding themes in this way is very important. Infrastructure lends itself to being proxies for several sectors including industrials and utilities--the EG Shares China Infrastructure ETF (<a class="ticker" href="/stock/chxx#">CHXX</a>) could be a proxy for real estate (not a way I would want to go but as an example). I read something yesterday about Steel ETFs which could be proxies for the materials sector, there are of course other examples. Some country funds are so heavy in one sector that they too can be proxies for sectors; iShares Singapore at 50% in financials and client holding iShares Peru (<a class="ticker" href="/stock/epu#">EPU</a>) being 65% materials as examples.
Using only one ETF per sector may not be such a great idea at least not with all ten. Whereas utilities, materials and telecom are all between 3-4% of the benchmark I think just one holding for those is just fine, assuming some weight close to the benchmark. The other seven sectors range in weight from 10.3% to 18.7% of the index. Using two holdings for each of those seven and one holding for the small three and that adds up to 17 holdings which is close enough to the 16 the Statmat cited.
For the sectors where an investor might try to get it done with two holdings there could be a core and explore sort of thing. Energy as an example some portion could go into something like the Energy Sector SPDR (<a class="ticker" href="/stock/xle#">XLE</a>) with the explore perhaps targeting volatility like the Jefferies Wildcatter ETF (<a class="ticker" href="/stock/wcat#">WCAT</a>) or targeting yield like one of of the many MLP ETPs.
Hopefully it is obvious that anywhere above we could instead be talking about individual stocks although I would not want 9% each in two tech stocks which is what it would take to equalweight the sector. As far as where I stand on 15-20 holdings, while there is no right or wrong I prefer more than that. There are many countries, themes and attributes I try to embed into a portfolio and it would be difficult to do in just 17 holdings. While it is certainly possible that holding number 24 or 37 offers less utility than holding number 12 that does not mean that holdings 24 and 37 are useless either.
On a sort of related note last night we watched IRT Deadliest Roads which aired Sunday night on the History Channel. It is about some of the drivers from Ice Road Truckers trying to drive on roads that look a lot like the one pictured above that i thought were from Bolivia but now I am not so sure. Each of the truckers was hauling a load of cement up to the JP construction site where they are building a hydroelectric plant. I am pretty sure that JP is Jindal Steel and Power which you can find under the hood of several India focused ETFs including the EG Shares India Infrastructure ETF (<a class="ticker" href="/stock/inxx#">INXX</a>). It is interesting that the show is about India infrastructure. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-8688909967184516200?l=randomroger.blogspot.com' alt='' /></div>

SPDR S&P International Utilities Sector ETF

Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF

WCAT

Diversified At 15 Holdings?

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By Dian L. Chu, Economic Forecasts Opinions 
Well, it is official now - in addition to the Great Wall, the Great Traffic Jam started on Aug. 14--60 miles and ten-day long on an "expressway" into Beijing from Inner Mongolia (see map)--has earned the capital of China the top spot among the cities with the world's worst traffic…, at least according to <a href="http://www.foreignpolicy.com/articles/2010/08/24/the_world_s_worst_traffic?page=0,0">Foreign Policy</a>. 
Although that logjam seemed to have cleared up, Reuters reported on Sep. 3 yet another similar 75-mile (120 km) crawl in Inner Mongolia on the same highway heading toward Beijing and the neighboring province of Hebei
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<td style="text-align: center;"><a href="http://1.bp.blogspot.com/_1o2wiBm5r_M/TILgP2KRhfI/AAAAAAAABm0/5TG-o-BCHGc/s1600/China+Jam.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="232" ox="true" src="http://1.bp.blogspot.com/_1o2wiBm5r_M/TILgP2KRhfI/AAAAAAAABm0/5TG-o-BCHGc/s320/China+Jam.png" width="320" /></a></td>
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<td class="tr-caption" style="text-align: center;">Graphic Source: <a href="http://www.newgeography.com/content/001745-what%E2%80%99s-behind-china%E2%80%99s-big-traffic-jam">newgeography.com</a></td>
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Infrastructure Under-capacity
Until recent years, China was able to maintain growth despite its inadequate infrastructure; however, this is not the case anymore. While the world seems quite fixated on the length--miles and number of days--of these mega jams near Beijing, there's also a serious message--the under-capacity of China’s infrastructure. 
Coal Overloads While Rail Lags
Both super-sized gridlocks reportedly were caused primarily by heavy trucks transporting illegal coal, compounded by road maintenance works. China is the world's top producer and consumer of coal. However, with limited rail lines, China's roads often suffer from the spillover of illegally overloaded trucks, especially along key coal regions. And Inner Mongolia is an important coal producing region in north China. 
“Shorter Than a Cigarette”
The per capita railway mileage in China is estimated to be only 6 cm--<a href="http://news.xinhuanet.com/english/2009-01/03/content_10597778.htm">shorter than a cigarette</a>—and remains below those of developed economies. In addition to commercial lines, the inadequate rail network also has been causing serious passenger travel headache, particularly during the annual spring festival migration. Cognizant of the crucial link between infrastructure and economic growth, China is keen to catch up. 
Infrastructure investment was the cornerstone of China's economic growth last year. In 2009, China <a href="http://english.peopledaily.com.cn/90001/90778/90860/6965110.html">pumped $102.7 billion</a> of investment into railways, an increase of 69.1% year over year, with high-speed passenger rail lines accounting for almost 60%, according to the report released this April by China's Ministry of Railway (<a class="ticker" href="/stock/mor#">MOR</a>). 
The country already has the world's largest high-speed rail network with 6,920 km of tracks, and is <a href="http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748703862704575098921097436494.html">planning</a> to lay down 42,000 km of new rail track by 2020, much of it completed by 2012, adding new high-speed rail lines between major cities. 
However, as China’s Minister of Railways Liu Zhijun noted last year, “...even in the future, China's railway mileage of 1.2 million km road network is still relatively low intensity.” 
Commuter Pain #1 – Beijing 
Even without the latest headline road congestions outside the city, Beijing already has taken the top spot in "Commuter Pain” among major world cities based on <a href="http://www-03.ibm.com/press/us/en/pressrelease/32017.wss">IBM's latest survey</a>.  And that’s with 44% of the respondents in Beijing taking bus to and from work, based on the same IBM survey. 
The ranking is of no surprise.  According to <a href="http://newgeography.com/">Newgeography.com</a>, by 2008, Beijing has reached a car ownership rate almost equal to that of New York City dense boroughs, but with 1.5 times as many drivers per household.
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The Great Auto Boom of China
The city of Beijing is not along in this predicament as other cities in China are also facing growing congestion headaches. <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&amp;sid=aE.x_r_l9NZE">Bloomberg</a> reported Chinese vehicle ownership climbed 51-fold, while per capital disposable income for Chinese households increased 46-fold in nominal terms from 1977 to 2008. 
Somewhere along the line, China dethroned the U.S. as the world’s largest auto market when its automobile sales zipped past the U.S. for the first time in 2009, when its total car sales hit 13.6 million vehicles, up 46% from 2008. 
China is racing to build new roads and has embarked in recent years on a huge expansion of its national road system. Nevertheless, the road upgrade and expansion has failed and to keep pace with, and will continue to lag behind the rising car buying and driving population (Chart 1). 
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<div class="separator" style="clear: both; text-align: left;">And the latest data offers few contradictions to this great auto boom.  China's car sales in August rose 55.7% on the year, as renewed subsidies for energy-efficient vehicles and a stronger yuan currency spurred demand.  Jeffrey Shen, CEO of Ford Motor China this week <a href="http://www.newgeography.com/content/001745-what%E2%80%99s-behind-china%E2%80%99s-big-traffic-jam">told Reuters</a> that he is projecting auto sales in China this year to grow by 15-25%, after a breakneck 45% rise in 2009. </div>

Law of (transportation) Supply &amp; Demand
China is going through a "growth normalization" phase after the Great Stimulus (4 trillion yuan) of 2009, and there are worries of a slowdown, even crash, partly as a result of the high base last year. However, Chin’s “normalized” growth forecast is still in the 8-10% range for 2010, and growth is becoming more broad-based as domestic consumption growth has strengthened since 2008. 
As opposed to the chorus of Chinese overbuilding bubble focusing on some <a href="http://blogs.wsj.com/chinarealtime/2010/05/12/revisiting-chinas-empty-city-of-ordos/">overhyped planning misses</a> not representative of the overall picture, China essentially has to keep expanding and upgrading its transport infrastructure (road, rail, ports, etc.) just based on the basic law of supply and demand, regardless of its monetary policy.    
Stay Logistically Competitive 
According to World Bank statistics, goods lost due to poor or obsolete transportation infrastructure amounted to 1% of China's GDP based on the most current survey (mid 1990's). Logistic costs account for 20% of a products price in China; compared to 10% in the U.S. (The numbers probably would be higher by now in light of China's rapid growth rate since the mid 1990s.) 
In order to stay competitive while meeting future social economic development needs, China will likely keep a strong commitment to accelerate its infrastructure development for years to come (think the next decade, minimum) just to play the catch-up game. 
About “Face”
Furthermore, the recent world headline grabbing super traffic jams have put the number two economy in the world in a somewhat negative spotlight. I'd suspect Chinese government would most likely accelerate and re-appropriate funding and projects just to rid of this not-so-favorable image and press. 
Now Playing - Great Infrastructure Expansion  
Recent data affirmed that total fixed asset investment for the first seven months was up 24.9% year-over-year, while railway construction also registered a 17% year-on-year growth, albeit at a slower rate than last year. (Char 2)
Although they are not covered in this discussion, infrastructure expansion will likely also continue in other developing regions like India and Brazil, in addition to China. 
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Investing Ideas 
This trend should provide good long-term growth prospect up and down the entire infrastructure supply chain from raw material, equipment to construction companies like China Railway Group, China Railway Construction Corp., Caterpillar (<a class="ticker" href="/stock/cat#">CAT</a>), General Electric (<a class="ticker" href="/stock/ge#">GE</a>), CNH Global N.V. (<a class="ticker" href="/stock/cnh#">CNH</a>), KOMATSU LTD, and VOLVO Group. 
There are also some infrastructure-focused ETFs that could give individual investors some broad coverage such as iShares S&amp;P Global Infrastructure Index Fund (<a class="ticker" href="/stock/igf#">IGF</a>), SPDR FTSE/Macquarie Global Infrastructure 100 (<a class="ticker" href="/stock/gii#">GII</a>), PowerShares Emerging Markets Infrastructure Portfolio (<a class="ticker" href="/stock/pxr#">PXR</a>). 
IndXX China Infrastructure Index (<a class="ticker" href="/stock/chxx#">CHXX</a>), China Infrastructure ETF (<a class="ticker" href="/stock/chxx#">CHXX</a>), and Global X China Materials ETF are examples of funds specifically focusing on China. 
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Morgan Stanley Capital Protected Notes for S&P 500 Index

High Roads to China

One analyst says the recent spate of acquisitions in the U.S. power sector is "just the tip of the iceberg." Bloomberg News reports that deals in the sector have jumped by more than 20-fold by value in the first eight months of the year.
Knowing that more deals like Blackstone's (NYSE: <a class="ticker" href="/stock/bx#NYSE">BX</a>) $4.7 billion purchase of Dynegy (NYSE: <a class="ticker" href="/stock/dyn#NYSE">DYN</a>) could be on the way makes it an ideal time to take a look at power and utilities ETFs that hold companies that are both targets and buyers. 
Pure-play utilities options: Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) and the Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>): Regulated utilities face little in the way of growth prospects and the recession has pressured their profit margins, so acquisitions are the best way for these companies to boost the bottom line. 
Look for companies like Duke Energy (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>) and Exelon (NYSE: <a class="ticker" href="/stock/exc#NYSE">EXC</a>), both of which can be found in both ETFs, to be on the prowl for acquisitions. If nothing else, you'll get decent yields with both ETFs.
A global option: SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>): GII has a good mix of U.S.-based companies like Duke and Exelon as well as European and Asian firms.
GII is also a play on power infrastructure in addition to the actual sale and production of electricity. Plus, this ETF yields over 4%.
A quantitative play: First Trust Utilities AlphaDEX ETF (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>): FXU takes a different approach by attempting to generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology, according to the ETF's profile.
This is not a pure play on utilities, but it is basically defensive as you'll find stocks like AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>) and CenturyLink (NYSE: <a class="ticker" href="/stock/ctl#NYSE">CTL</a>) among the top-10 holdings.
Another infrastructure play: First Trust NASDAQ CleanEdge Smart Grid Infrastructure Index Fund (Nasdaq: <a class="ticker" href="/stock/grid#Nasdaq">GRID</a>): If you're betting on a boom in smart grid technology, GRID is your play. As an M&amp;A play, GRID may be a bit speculative at this point, but could bear fruit down the road.
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Rumors

ETFs For The Power Acquisition Binge

With the market rising and falling everyday, now may be the time for investors to think about adding infrastructure investments to their portfolios. The sector’s low correlation with other assets can help diversify portfolios and increase returns while curbing risk. Cash flows from toll roads, pipelines and other infrastructure assets are also generally pegged to inflation. 
Infrastructure can act as a play on emerging markets, which need to build out, or developed markets which require improvements. For example, the Bureau of Transportation Statistics declared that nearly twenty-five percent of the 600,000 bridges in the United States are “structurally deficient” or “functionally obsolete”.
Analysts believe that governments worldwide will need to spend $2 trillion a year through 2015 on infrastructure. Approximately, $35 trillion over the next 20 years. 
Investors wanting to add an infrastructure component to their portfolios can do so with several exchange traded funds in the sector. The iShares S&amp;P Global Infrastructure Index (NYSE: <a class="ticker" href="/stock/igf#NYSE">IGF</a>) and SPDR FTSE/Macquarie Global Infrastructure 100 (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>) offer exposure broad based exposure to the theme. 
While EGS INDXX China Infrastructure (NASDAQ: CHXX) and the PowerShares Emerging Markets Infrastructure (NYSE: <a class="ticker" href="/stock/pxr#NYSE">PXR</a>) allow investors to play the emerging market build up.

Infrastructure Opportunities 

While the threat of European austerity has taken much of the wind out of the sails of the alternative energy movement in Europe, the region still produces much of its power through these renewable means. Spain and Germany, the two European countries with the most installed wind and solar generating capacity, are functioning more like islands. Similar to the United States, each nation’s electrical grid functions on its own and they are not interconnected. 
Aside from bailout talks, European Commission energy regulators are beginning to work together to develop a cross-European market and the E.U. will also address the issue in its energy infrastructure package to be announced later this year. Individual subsidies for solar companies may come to an end; but the Commission seems intent on reaching efficiency goals and better inter-grid connections. These infrastructure improvements might make a better long term investment rather than the alternative power producers. 
The First Trust NASDAQ Clean Edge Smart Grid Infrastructure (NASDAQ: <a class="ticker" href="/stock/grid#NASDAQ">GRID</a>) is the best way to play the birth of the “smart grid” in both Europe and the United States. Another choice is the European utility heavy, SPDR FTSE/Macquarie Global Infrastructure 100 (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>).

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SPDR S&P Global Infrastructure ETF

Overview

SPDR S&P Global Infrastructure ETF (ARCA:GII), Quote.Headers.trade-ideas