Infrastructure ETFs Haven’t Lived Up To President Barack Obama’s Plan

road-work-infrastructure“It has been a little less than a year since the great infrastructure boom was launched with President Barack Obama’s $787-billion (U.S.) stimulus package, promising roads, bridges and jobs, jobs, jobs. It looked like an ideal time to make an infrastructure-themed investment, and the fact that the promised building boom coincided with the final year of touches on the 2010 Winter Olympic Games in Vancouver was a bonus. How could investors go wrong,”  David Berman Reports From The Globe and Mail.

Berman continues to say, “Like many of these big-picture investment themes, the results have been mixed. Since Mr. Obama signed the American Recovery and Reinvestment Act in mid-February, 2009, North American stock market indexes have taken off. The S&P 500 index has risen a total of 40 per cent (after including dividends), as investors bet early that extraordinary measures taken to turn around the U.S. economy would work out. In Canada, the S&P/TSX composite index has risen about 41 per cent over the same period – driven in part by Canada’s own stimulus spending.”

“By comparison, infrastructure stocks have merely kept up with this strong advance. We looked at five infrastructure stocks for companies based in the United States, Canada and Europe, and an exchange-traded fund that tracks the MFC Global Infrastructure Index. The results over the past 12 months suggest that betting big on infrastructure probably wasn’t worth the effort.The Claymore Global Infrastructure ETF has gained only 15 per cent over this period, severely lagging both benchmark indexes. Many of the companies within the ETF are pipelines and energy developers, which aren’t necessarily the star attractions of an infrastructure investment,” Berman Reports.

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If you still believe in the great infrastructure boom we have listed some options for investing in infrastructure with ETFs below:

The investment (PXR) seeks to correspond (before fees and expenses) generally to the price and yield performance of S-Network Emerging Infrastructure Builders index. The fund normally invests at least 90% of total assets in the securities and American Depository Receipts (“ADRs”) and Global Depository Receipts (“GDRs”) based on the securities that comprise the Underlying index.It is nondiversified.

TOP 10 HOLDINGS ( 30.52% OF TOTAL ASSETS)  
 
Company Symbol % Assets
ABB N ORD (ABBN) 3.79
CATERPILLAR INC (CAT) 3.5
Foster Wheeler AG. (FWLT) 2.96
Jiangxi Copper Company Limited N/A 2.6
KBR INC (KBR) 2.41
Larsen & Toubro Limited N/A 2.59
Reunert Limited N/A 2.88
Shanghai Electric Group Company Limited N/A 2.75
VALE S.A. ADS (VALE) 3.6
VINCI (DG.PA) 3.44

Chart for PowerShares Emerg Mks Infrastructure (PXR)

The investment (IGF) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Infrastructure index. The fund invests at least 90% of assets in the securities of the underlying index or in ADRs, or other depositary receipts representing securities in the underlying index. It may invest in securities not included in the underlying index which BGFA believes help the fund track the underlying index. The fund may invest in futures contracts, options on futures contracts, options, and swaps related to the underlying index. It is nondiversified.

TOP 10 HOLDINGS ( 38.76% OF TOTAL ASSETS)  
 
Company Symbol % Assets
ABERTIS INFRAESTRUCTURAS A (ABE) 4.24
Atlantia N/A 3.66
E.ON N (EOAN.BE) 4.07
ENBRIDGE INC (ENB) 4.76
GDF SUEZ (GSZ) 3.76
IBERDROLA (IBE) 2.81
SPECTRA ENERGY (SE) 3.66
TRANSCANADA CORP (TRP) 5.03
TRANSURBAN STAPLED (TCL.AX) 3.67
WILLIAMS COS (WMB) 3.1

Chart for iShares S&P Global Infrastructure Index (IGF)

The investment (GII) seeks to track the price and yield performance, before fees and expenses, of the Macquarie Global Infrastructure 100 index. The fund invests at least 90% of assets in securities, such as ADRs and GDRs, which comprise the index. The index measures the performance of companies within the infrastructure industry, principally those engaged in management, ownership and operation of infrastructure and utility assets. The fund is nondiversified.

TOP 10 HOLDINGS ( 35.60% OF TOTAL ASSETS)  
 
Company Symbol % Assets
E.ON N (EOAN.BE) 7.15
ENEL SPA (ENEL) 3.47
EXELON CORPORATION (EXC) 2.74
GDF SUEZ (GSZ) 6.08
IBERDROLA (IBE) 4.2
NATIONAL GRID PLC (NGG) 2.28
RWE AG (RWE) 3.26
SOUTHERN CO (SO) 2.26
The Tokyo Electric Power N/A 2.17
TRANSCANADA CORP (TRP) 1.99

Chart for SPDR FTSE/Macquarie Global Infra 100 (GII)

 

 

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