Investors ramp up infrastructure focus in 2017
- Investors have allocated $460 million so far this year into infrastructure-related mutual funds and exchange-traded funds, according to The Wall Street Journal.
- The level of investment at the end of the first quarter was up 12% from last year to $16.1 billion, with fund managers saying that investors are willing to wait a few years to see traction on President Donald Trump's $1 trillion infrastructure plan.
- Also attractive to infrastructure investors is the five-year, $305 billion transportation initiative signed into law by President Obama in 2015, the Fixing America’s Surface Transportation (FAST) Act. Combined with $200 million in additional projects approved by voters in the November elections, fund managers have called the setup a "slam dunk."
Investor enthusiasm for infrastructure projects has been strong since Trump first announced his massive plan before the election. The day after he won the presidency, construction-related stock prices rose sharply and continue to do so every time there is an announcement that favors the agenda.
In addition, an Altus survey of top U.S. real estate executives back in January indicated that infrastructure assets were considered a top investment. As part of the survey, participants were asked to invest an imaginary $1 billion for maximum returns, and they allocated 15.5% to infrastructure, which marked a 215% increase from last year.
However, Trump's infrastructure road has been a bit bumpy. He has yet to provide details on his plan and has left infrastructure spending out of his proposed 2018 budget and the most recent tax reform proposal. Congress actually increased infrastructure spending in its short-term spending bill, while Trump proposed cutting funding for transportation programs in his preliminary budget.
- The Wall Street Journal Fund Investors Are Betting Big on Infrastructure
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