In Part 1, I looked at four infrastructure funds that held physical structures like utilities, tolls, and storage facilities that generate income, as well as companies that build infrastructure. These funds focused mostly on developed markets in North America, Europe, and Japan.

These funds only partially met my two criteria: 1) their holdings must cover the range of industries that participate in infrastructure, and 2) they must participate in both the US and China build-outs, with other global markets as a bonus.

Many consider global “infrastructure" an investment opportunity. The developing markets continue their growth despite a slowdown, and the US has deteriorating systems in need of replacement. With China and US each announcing intentions to spend hundreds of billions on infrastructure, plus many other nations chipping in, what's the best way for investors to get in on the action?

One approach is to select among the eight mutual funds and ETFs focusing on infrastructure. Each has a different approach. For my money, I would insist on a portfolio meeting two criteria: 1) their holdings must cover the range of industries that participate in infrastructure, and 2) they must participate in both the US and China build-outs, with other global markets as a bonus.

I've followed water stocks for five years now, starting before any water-focused funds or ETFs were available. Water is considered by some to be the "ultimate" commodity, since we literally cannot live without it, and there is a limited supply in the world. Some of the largest global players in water are European conglomerates like Veolia (VE). In the US, a handful of water stocks and utilities can be identified, such as ITT Corp (ITT) and Aqua America (WTR). Together, these water companies can be thought of as plays in commodities, utilities, or infrastructure.

The first water ETF was launched in late 2005. The PowerShares Water Resources Fund (PHO) was joined in mid-2007 by three more water ETFs: PowerShares Global Water (PIO), Claymore S&P Global Water (CGW) and First Trust ISE Water (FIW). Each is based on a different sector index so each offers unique stock and sector weightings. Recent new water indices may result in additional water ETFs soon (see article here).