Global X has added to its suite of exchange-traded funds (ETF) available on the Australian Securities Exchange (ASX) with the launch today of an ETF targeting growing investment in United States infrastructure.
The Global X US Infrastructure Development ETF (ASX code: PAVE) charges a management fee of 47 basis points and tracks the Indxx US Infrastructure Development Index with a focus on companies, including those in raw materials, heavy equipment, engineering and construction, that are likely to benefit from increased spending on infrastructure projects in the world’s largest economy.
Global X chief executive Evan Metcalf said the fund provides exposure to an underserved area, with almost $4 trillion in spending required to upgrade existing assets in the US, and noted the ETF is designed to be used as a satellite holding to supplement a diversified portfolio.
“Infrastructure development, which is distinct from investing in infrastructure assets themselves, is critical for the growth and modernisation of any economy. Within the US, recent legislative acts are directing substantial funding towards infrastructure initiatives, signalling enormous growth potential for companies in this sector,” Metcalf said.
Global X head of investment strategy Scott Helfstein added the long-term outlook for the sector is robust given the US government has made closing the funding shortfall a priority.
“The US infrastructure sector is facing an urgent need for development. As recently as 2021, the American Society of Civil Engineers assigned US infrastructure a ‘poor grade’, highlighting significant deficiencies which must be addressed. This has spurred several long-term legislative catalysts, including the Infrastructure Investment and Jobs Act and CHIPS and Science Act, amounting to nearly US$2 trillion in federal investment,” Helfstein said.
“PAVE stands uniquely positioned to capitalise on this momentum, offering a balanced portfolio that strategically leverages these long-term trends. This provides investors with opportunities for both stability and growth, enabling them an opportunity to participate in this transformative period.”
PAVE brings the number of funds in Global X’s ETF range in Australia to 38 after the release of a gold bullion ETF last month and an artificial intelligence-focused fund in April.