DavidtheGrim

Infrastructure vs. Utility ETFs: Don't Be a Victim of Semantics

Utilities and Infrastructure are not that different towards eachother, basically utilities should be more weighted in commodity stocks, ie: water, gas, electricity including sewage, telephone services & other non comodities that provide a consumable for consumption, rather than infastructure which should be weighted in the physical network of systems which enable the consumables to be deployed through a physical network, ie: highways, river/canal systems, railways, tunnels, processing plants, generating plants and suchlike, however it is hard to differenciate between the two as particular stocks hold both, utilities and infastructure networks are commonly contained within one stock.

Therefore there should and will be a tight correlation for the two topics regarding share price when demand for both utilities and infastructure are being satisfied or not, unless supply fails to meet demand of utilities whilst the infastructure network is in place (during peak) and visa versa (in downturns).

That would be in an ideal world, however whilst utilities may be of plenty the infastructure to support it's movement may require updating, replacing or a new network installation may be required which inturn creates movement within the shareprice for the succesful tender of the construction firm leaving the utility consumable behind in movement until the service is actually deployed to its consumer.

I am a fan of both utilities and infastructure as areas within the western world have been little developed since the last one hundred years or so, especially within the UK.

In times of downturn it is important for countries to examine their own utilities and networks of infastructure and improve where possible in order to succeed the next bull, I expect that spending will commence within the coming years to improve and update the exhausted networks already laid out, it has to be done for its economic future.

Regarding the current share valuations of funds for both is merely that which is replicated at present throughout all sectors within the market creating a vortex for pulling of stocks including proven safeheavens.

DTG