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Oddly, not all of these infrastructure funds include railroads, which I think will continue to be one of the best subsectors. In general, as well, they're something I don't even ponder selling.
I think most of these are designed towards investing in companies that stand to gain by increased infrastructure spending which is not a given in the political theater that is Washington. Railroads will have significant economic activity but not necessarily a big part of that infrastructure spending.
I think most of these are designed towards investing in companies that stand to gain by increased infrastructure spending which is not a given in the political theater that is Washington. Railroads will have significant economic activity but not necessarily a big part of that infrastructure spending.
The ones I've seen have been literal infrastructure (ex, TOLLX) or pure plays (Brookfield Infrastructure/BIP) In terms of companies that stand to gain, would likely be a more industrial fund (Fluor, Chicago Bridge/Iron, etc.)
Hank, I agree with what you're saying and will hold off investing in a specific sector like that until there's actual movement. Even then I might not. CB&I is my only current play.
I get what Scott has been saying for a long time but I just haven't seen the market pulse for that area match the perceived interest or need. I'm sure maybe someday but I can wait.
Typically, the narrower the slice, the more the fund moves from core to satellite to momentum buckets for the reason to invest. Follows from the increased volatility in being more focused.
Assuming people look at their portfolio as core and other buckets in allocation plan rather than as a single kitchen sink, of course.
Just like conference organizers that make money by organizing topic conferences for the latest industry buzz words, the ease of creating mutual fund creation has led to the same phenomena in creating funds. Like the 3D printing fund that was discussed here earlier.
They don't need to last long, just a year or two to attract funds from people that invest in the latest buzz word, make a couple of million in fees and shut it down if the interest dies down. Rinse, repeat.
Not that different from the market neutral or minimum volatility funds suddenly spawned when they became the buzzword. You just need a credible "investment thesis" that is currently in the news. Good gig if you can get it.
For me, "infrastructure" is hard, productive assets (rail, power, pipeline, airports, etc etc) that are often (at least to some degree) necessary and offer relatively stable/consistent cash flow. It's not "sexy" or a fad (I don't have to ask whether these companies will still be popular in a year or three.) It often fulfills a need and usually provides a nice dividend.
Might "infrastructure" and all of its subsections be "hot and cold" in the short term in terms of investment? Possibly, but I just don't see it as a "buzzword" (in the way that one would consider 3d printing or social media as "buzzwords") - these are anything but sexy investments and I think there's an appeal to their long-term need and relative consistency over time. Lastly, the other appeal is that some infrastructure is dominated by a relatively small handful of companies - the biggest example of this is, of course, the railroads.
Do you need 50 infrastructure funds? No. Do they have a place - possibly as a new variation on the "utility" subcategory? I think they do.
In terms of companies that are called upon to BUILD the infrastructure, those are something else and would probably be even a better play if this country devoted actual effort to improving its infrastructure. But that's a different thread.
Plenty of Infrastructure Opps and Roadblocks! All items from today @ Seeking Alpha Keystone foes now gunning for Dominion's Cove Point LNG export project
Green groups call on Pres. Obama to reject pending applications to build liquefied natural gas export terminals, and "as a good-faith test case," Obama should force the FERC to conduct a broad environmental impact assessment of Dominion Resources’ (D) proposed Cove Point LNG export facility in Maryland. The energy required to liquefy and ship gas at Cove Point would raise the fuel’s greenhouse gas emissions to the level of coal, activists say, threatening the climate like pipelines tied to developing oil sands in Alberta, such as Keystone XL. The Energy Department already has conditionally approved Dominion to export up to 770M cf/day of natural gas to countries that don’t have free-trade agreements with the U.S., but the FERC still must review the company's plans to revamp its decades-old natural gas receiving terminal so it can instead liquefy the gas and load it onto tankers bound for Japan and India. FERC so far is on track to require only a smaller environmental assessment of the planned $3.8B export project.
Enterprise Products to start Seaway pipeline expansion as early as May
Enterprise Products Partners (EPD) says it plans to start its Seaway pipeline expansion as early as May, more than doubling the system’s capacity to move oil from the delivery point for West Texas crude in Cushing, Okla., to Gulf coast refineries. EPD, which operates Seaway and co-owns it with Enbridge (ENB), had said it would start late in Q2. EPD is looping the existing line with a parallel pipeline that will increase capacity to the Houston area to 850K bbl/day; EPD and ENB reversed the pipeline in May 2012 and expanded it to the current capacity of 400K bbl/day in Jan. 2013. A further loosening of the crude storage bottleneck at Cushing as the Seaway expansion is brought online could push WTI prices closer to Brent prices.
CBI CB&I +4.5% after gaining three new contracts totaling $6B-plus
CB&I (CBI +4.5%) shoots higher after receiving a $6B engineering and construction contract on the planned Cameron LNG export facility in Louisiana, a $625M deal from Bechtel for work on Chevron’s (CVX) Wheatstone liquefied natural gas project in Western Australia, and a $100M pipe fabrication contract from Enterprise Products Partners (EPD) for a propane project in Texas. Cowen analysts view CBI as their top pick among E&C companies to benefit from the buildout in global petrochemicals and liquefied natural gas, initiating coverage on CBI with an Outperform rating and $98 price target due to its earnings growth and operating stability, exposure to diversified end markets, best in class margins and strong technical operating groups.
Exxon Mobil reportedly plans $20B power project in Vietnam
Exxon Mobil (XOM) is preparing to invest ~$20B in a gas-fired power complex with Vietnam's state oil and gas group Petrovietnam, according to local media. The project would involve construction of two power plants with a combined capacity of 6K-6.5K MW, in a deal which could make the U.S. one of the top four foreign investors in Vietnam along with Japan, South Korea and Taiwan, according to the report.
Comments
I get what Scott has been saying for a long time but I just haven't seen the market pulse for that area match the perceived interest or need. I'm sure maybe someday but I can wait.
Assuming people look at their portfolio as core and other buckets in allocation plan rather than as a single kitchen sink, of course.
Just like conference organizers that make money by organizing topic conferences for the latest industry buzz words, the ease of creating mutual fund creation has led to the same phenomena in creating funds. Like the 3D printing fund that was discussed here earlier.
They don't need to last long, just a year or two to attract funds from people that invest in the latest buzz word, make a couple of million in fees and shut it down if the interest dies down. Rinse, repeat.
Not that different from the market neutral or minimum volatility funds suddenly spawned when they became the buzzword. You just need a credible "investment thesis" that is currently in the news. Good gig if you can get it.
Might "infrastructure" and all of its subsections be "hot and cold" in the short term in terms of investment? Possibly, but I just don't see it as a "buzzword" (in the way that one would consider 3d printing or social media as "buzzwords") - these are anything but sexy investments and I think there's an appeal to their long-term need and relative consistency over time. Lastly, the other appeal is that some infrastructure is dominated by a relatively small handful of companies - the biggest example of this is, of course, the railroads.
Do you need 50 infrastructure funds? No. Do they have a place - possibly as a new variation on the "utility" subcategory? I think they do.
In terms of companies that are called upon to BUILD the infrastructure, those are something else and would probably be even a better play if this country devoted actual effort to improving its infrastructure. But that's a different thread.
All items from today @ Seeking Alpha
Keystone foes now gunning for Dominion's Cove Point LNG export project
Green groups call on Pres. Obama to reject pending applications to build liquefied natural gas export terminals, and "as a good-faith test case," Obama should force the FERC to conduct a broad environmental impact assessment of Dominion Resources’ (D) proposed Cove Point LNG export facility in Maryland.
The energy required to liquefy and ship gas at Cove Point would raise the fuel’s greenhouse gas emissions to the level of coal, activists say, threatening the climate like pipelines tied to developing oil sands in Alberta, such as Keystone XL.
The Energy Department already has conditionally approved Dominion to export up to 770M cf/day of natural gas to countries that don’t have free-trade agreements with the U.S., but the FERC still must review the company's plans to revamp its decades-old natural gas receiving terminal so it can instead liquefy the gas and load it onto tankers bound for Japan and India.
FERC so far is on track to require only a smaller environmental assessment of the planned $3.8B export project.
Enterprise Products to start Seaway pipeline expansion as early as May
Enterprise Products Partners (EPD) says it plans to start its Seaway pipeline expansion as early as May, more than doubling the system’s capacity to move oil from the delivery point for West Texas crude in Cushing, Okla., to Gulf coast refineries.
EPD, which operates Seaway and co-owns it with Enbridge (ENB), had said it would start late in Q2.
EPD is looping the existing line with a parallel pipeline that will increase capacity to the Houston area to 850K bbl/day; EPD and ENB reversed the pipeline in May 2012 and expanded it to the current capacity of 400K bbl/day in Jan. 2013.
A further loosening of the crude storage bottleneck at Cushing as the Seaway expansion is brought online could push WTI prices closer to Brent prices.
CBI
CB&I +4.5% after gaining three new contracts totaling $6B-plus
CB&I (CBI +4.5%) shoots higher after receiving a $6B engineering and construction contract on the planned Cameron LNG export facility in Louisiana, a $625M deal from Bechtel for work on Chevron’s (CVX) Wheatstone liquefied natural gas project in Western Australia, and a $100M pipe fabrication contract from Enterprise Products Partners (EPD) for a propane project in Texas.
Cowen analysts view CBI as their top pick among E&C companies to benefit from the buildout in global petrochemicals and liquefied natural gas, initiating coverage on CBI with an Outperform rating and $98 price target due to its earnings growth and operating stability, exposure to diversified end markets, best in class margins and strong technical operating groups.
Exxon Mobil reportedly plans $20B power project in Vietnam
Exxon Mobil (XOM) is preparing to invest ~$20B in a gas-fired power complex with Vietnam's state oil and gas group Petrovietnam, according to local media.
The project would involve construction of two power plants with a combined capacity of 6K-6.5K MW, in a deal which could make the U.S. one of the top four foreign investors in Vietnam along with Japan, South Korea and Taiwan, according to the report.
Companies that actually engineer/build the infrastructure seldom are found in most infrastructure funds,For example;
http://etfdb.com/stock/CBI/
or
http://etfdb.com/etf/FLM/#holdings
InfrastructureMutual Funds
GLFOX
http://www.lazardnet.com/us/docs/sp2/461/LazardGlobalListedInfrastructurePortfolio_FactSheet_2013Q4.pdf
MTIPX
http://www.morganstanley.com/msamg/msimintl/docs/en_US/publications/factsheets/MSF/global_infrastructure.pdf