Turning the Infrastructure Into Profits Through ETFs

infrastructureWANT to buy a bridge, or at least invest in a company that builds one? (No, that bridge is still not for sale.)

As they search for better returns, more investors are discovering that the road to riches could lie in the vast global infrastructure: an assortment of companies that build or manage highways and tunnels, water and waste systems, parking garages, airports and other properties. These rather obscure investments offer predictable cash flow, largely impervious to economic and market fluctuations.

Big institutions like pension funds are putting money into private funds and looking into direct investments in projects. But even individual investors are finding a number of options, many of them fairly new, through private equity funds, separately managed accounts and limited partnerships, along with exchange-traded and mutual funds……

……Many infrastructure funds offered in this country are chock-full of international companies like Cintra. Among the other commonly held holdings is Abertis Infraestructuras, a Spanish company that builds and operates toll roads. The company makes up part of the portfolio of the Kensington Global Infrastructure fund and the iShares S.& P. Global Infrastructure Index Fund, the E.T.F., as does the Transurban Group of Australia, a toll road developer and investor.

Mr. Rosenberg also favors Transurban. “The company owns assets around the world; they are mature assets, which really provides stability during the downturn,” he said. He likes the French airport operator Aéroports de Paris, and his portfolio includes Digital Realty Trust, a REIT that owns and operates buildings that house data centers, which some consider part of the infrastructure domain.

Another infrastructure E.T.F., the First Trust ISE Global Engineering & Construction Index fund, meanwhile, includes companies engaged in large public- and private-sector infrastructure projects. The largest holdings include Vinci of France, a building and civil engineering firm; Group ACS (or Actividades de Construcción & Servicios), a Spanish company whose principal activities include the development, construction and management of infrastructures; and Leighton Holdings, the Australian developer.

Full Story: http://www.nytimes.com/2009/05/24/realestate/commercial/24sqft.html?ref=business

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