New Trade for June 28th, 2021

Stocks began the day with relatively slight movement after last week’s record highs.  At the time this was written, the S&P 500 was flat, the Dow was slightly down and the Nasdaq was up by 0.3%.

The bipartisan infrastructure bill seems to be back on track after President Biden walked back his statement last week that he won’t sign a bipartisan infrastructure deal if it’s not paired with a larger spending plan that’s focused on “human infrastructure.”

Intense pushback from Republicans after the statement threatened to jeopardize the fragile deal just a day after it was reached.  

“The bottom line is this: I gave my word to support the Infrastructure Plan, and that’s what I intend to do,” Biden said in a statement released this weekend. “I intend to pursue the passage of that plan, which Democrats and Republicans agreed to on Thursday, with vigor. It would be good for the economy, good for our country, good for our people. I fully stand behind it without reservation or hesitation.”

To pass the infrastructure bill, Biden faces the challenge of keeping both Democrats and Republicans on board and has reiterated his intention to work hard to reach an agreement as quickly as possible. 

The plan would revamp broadband, water, roads & bridges and include allocations for things like healthcare and clean energy.  While some cash is earmarked for certain sectors, it can be difficult to predict the individual companies that will benefit.  

In today’s trade we’ll highlight a pure play on domestic infrastructure that allows investors to cast a wide net to potentially benefit from the broader trend in infrastructure spending.   



 The Global X U.S. Infrastructure Development ETF (PAVE) is the largest purely domestic infrastructure ETF with roughly $3.7 billion in assets under management.  PAVE’s definition of infrastructure includes many players in the construction supply chain, construction equipment producers, industrial transportation, producers of raw materials and engineering services.

There’s a wide array of individual stocks that make up the fund’s roughly 100 holdings.  Unlike most other infrastructure themed funds, PAVE focuses on domestic infrastructure, as companies must be listed in and derive more than 50% of their revenue from the U.S..  The fund is diversified across all market capitalizations and excludes MLPs, REITs and BDCs.   

The infrastructure fund is up about 65% in the last 12 months, nearly doubling the performance of the S&P 500 over the same period, so momentum is on PAVE’s side. 

The Global X U.S. Infrastructure Development ETF (PAVE) 

  • Weighted Average Market Cap  $28.76B
  • Price / Earnings Ratio   41.02
  • Price / Book Ratio  3.69
  • YTD Return  23.67%
  • Yield  0.35%
  • Expense Ratio  0.47%
  • Net Assets   3.69B
  • Number of Holdings  101

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