Market Overview

3 ETFs For Biden's Infrastructure Ambitions

3 ETFs For Biden's Infrastructure Ambitions

With Election Day less than two months away, odds are investors and voters will be hearing plenty about in the U.S. 

While it's often "infrastructure week" or "infrastructure month" in Washington, D.C., the U.S. has not passed a comprehensive infrastructure spending plan since the Eisenhower administration.

That's tragic: not only are America's bridges and roads crumbling, but infrastructure is an easy, usually bipartisan avenue for creating jobs and boosting GDP.

Democratic nominee Joe Biden and incumbent Republican President Donald Trump know this, and they're both making big infrastructure promises. Whether those promises are delivered remains to be a seen, but some exchange traded funds could benefit from the political bluster.

FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA)

The FlexShares STOXX Global Broad Infrastructure Index Fund (NYSE: NFRA) is a global fund, but the U.S. is its dominant geographic exposure. NFRA is positioned to deliver regardless of political outcomes.

“Investors seeking income and portfolio diversification may benefit from infrastructure investments,” according to FlexShares research. “Our analysis suggests that infrastructure issuers tend to have predictable cash flows as they provide essential services used in all economic environments. Infrastructure stocks carry both equity and interest rate exposure, and can provide an alternative source of income that may be attractive in a low interest rate environment.”

NFRA follows the STOXX Global Broad Infrastructure Index, which includes traditional and non-traditional infrastructure assets.

Global X U.S. Infrastructure Development ETF (PAVE)

The Global X U.S. Infrastructure Development ETF (CBOE: PAVE) is highly relevant in the infrastructure ETF political conversation because it's the only fund in this category dedicated to domestic infrastructure equities.

The domestic focus could make PAVE a winner if Biden — or Trump — delivers on infrastructure promises.

“Biden will make a $2 trillion accelerated investment, with a plan to deploy those resources over his first term, setting us on an irreversible course to meet the ambitious climate progress that science demands,” according to his campaign site.

ProShares DJ Brookfield Global Infrastructure ETF (TOLZ)

The ProShares DJ Brookfield Global Infrastructure ETF (NYSE: TOLZ) yields almost 3.1%, reflecting the income proposition offered by investing in this asset class. Plus, TOLZ checks two important boxes: compelling valuations and infrastructure purity.

“Pure-play infrastructure, which invests in the owners and operators of infrastructure, may be a compelling solution. This category provides a way to invest in companies that generate income while also providing an attractive outlook, per relative valuations of the S&P 500,” ProShares said in a recent note.


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