The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Railroads, bridges, airports and ETFs

Countries worldwide are dedicating vast amounts of  money to infrastructure spending over the next five years  and there are easy  avenues to prosper from this spending  with ETFs. A recent  white paper by Eric J. Gerritsen on  The Journal of Commerce Online provides a brilliant snap  shot of the infrastructure boom that awaits.

Eye Popping Numbers

According to Gerristen’s White Paper, the U.S. will spend $150 billion of the government’s stimulus funds on infrastructure. Other developed nations like Germany, Australia, Great Britain and Canada are all planning large amounts of infrastructure spending as well. In addition, emerging market nations such as China and India are planning to spend obscene amounts to get their countries into the 21st century. India alone is planning to double the number of its major international airports in the next decade. China also is planning very aggressive airport development. This is not to mention countries like Chile rolling out new roads, schools and stadiums with their $4 billion infrastructure plans and Brazil’s $212 billion spending on railways, roads and airports.

ETF Opportunities

On June 19, 2009 iShares rolled out an Emerging Market Infrastructure (ticker EMIF) fund to join Powershares Emerging Markets Infrastructure Fund (ticker (PXR) in the same space. Additionally, for those not willing to go the emerging markets route take a look at iShares Global Infrastructure (ticker IGF) or SPDR/FTSE Macquarie Global Infrastructure Fund (ticker GII).  Obviously, the need for infrastructure in the developing world is much greater than the developed world and hence provides an extraordinary opportunity.  Keep in mind though that the U.S. has done very little infrastructure spending in the last 40 years and also presents some great opportunities.

No chart for iShares Emerging Market Infrastructure (ticker EMIF) as it is one day old

Powershares Emerging Markets Infrastructure Fund (ticker PXR) is well above its 200 day EMA

via Railroads, bridges, airports and ETFs.


%d bloggers like this: