Entering text into the input field will update the search result below

Pinnacle's Dillon Discusses The Importance Of Infrastructure

Mar. 11, 2018 8:28 AM ET
Global X ETFs profile picture
Global X ETFs

For this post, we interviewed Sean Dillon, Technical Analyst at Pinnacle Advisory Group, for his thoughts on the importance of infrastructure to the economy, which companies might benefit from increased infrastructure spending, and how to fit this theme in a portfolio.

While Global X offers a U.S. Infrastructure Development ETF (PAVE), the information provided herein are the views of Pinnacle Advisor Group and should not be construed as an endorsement of the Fund or representative of Fund positioning.

  • Why is now the time to think about investments related to rebuilding infrastructure?

While there has been some slight improvement in the infrastructure grade for the U.S. from American Society of Civil Engineers (ASCE), this is from a very depressed level. Most individual areas of assessment, like water facilities and transit receive a letter grade of C or D. The U.S. has spent only 2% of GDP on infrastructure over the last few decades and most of these funds were spent by state and local governments on operations and maintenance. The ASCE estimates that the infrastructure funding gap is close to $1.5 trillion. Therefore, there is a clear need; and at this time there could be broad support for an infrastructure spending package. Productivity has stagnated since 2010 and the Congressional Budget Office (CBO) has estimated that infrastructure spending raises productivity in the short and long term, which is why we think now is the perfect time to invest for the future.

  • Which firms potentially stand to benefit from rebuilding US infrastructure?

The firms that stand to benefit from rebuilding US infrastructure reside in the material and industrial sectors. From the material sector, steel stands out as a clear winner under this theme. Constructing bridges, pipelines, etc. takes a large amount of raw materials, so the miners and manufacturers of these materials are well positioned. From the industrial sector, heavy construction, electrical

This article was written by

Global X ETFs profile picture
Founded in 2008, Global X is a sponsor of exchange-traded funds (ETFs). We are distinguished by our Thematic Growth, Income, and International ETFs. Explore our insights on the trends and themes shaping global markets – from technology to commodities to emerging economies – at globalxfunds.com/research. Global X ETFs is a member of the Mirae Asset Global Investments Group. Important disclosures: globalxfunds.com/privacy

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.