In our previous blog posts we covered an essential guide to investing and the benefits of passive investing, a critical component for building long-term wealth. Together, these resources pave the way to our introduction of the PAVE ETF. Let's explore why PAVE can be a compelling opportunity for savvy investors.
What?
The Global X U.S. Infrastructure Development ETF (PAVE) targets companies likely to benefit from significant U.S. infrastructure spending, such as those in construction, materials, and industrial machinery sectors. The American Society of Civil Engineers assigned a letter grade of C- to the state of U.S. infrastructure in its 2021 report card, highlighting the compelling need for significant investment. PAVE is well-positioned to benefit from this demand, as it aligns with major legislative efforts including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act, which together allocate nearly $1 trillion to rejuvenate and expand critical infrastructure across the nation.
So What?
Let's look at the details of the PAVE ETF. The values quoted below are as of 3/27/2024.
Inception: 3/6/2017
Expense Ratio: 0.47%
Net Assets: $7.3 Billion
12-Month Yield: 0.59%
1-Year Annualized Return: 41.5%
3-Year Annualized Return: 17.6%
5-Year Annualized Return: 21.3%
Morningstar Rating: 5 Stars (the best possible rating)
PAVE is an well-established ETF with over $7 Billion of assets under management. Its strong performance is clearly represented in its annualized returns. Its superior past performance was also recognized by Morningstar's 5 Star rating. There are, however, a couple of soft spots: a relatively high expense ratio of 0.47% and a relatively low yield of 0.59%.
The chart below shows the growth of $10,000 investment since its inception. PAVE clearly outperformed both the Morningstar Infrastructure Category and a comparable broad-based index. Note that the worst performing 3-month corresponds to the COVID-related plunge of the stock market.
Now What?
Given PAVE's strong track record and alignment with extensive federal infrastructure initiatives, it presents a robust opportunity for investors aiming for long-term growth. Consider how PAVE's sector focus and historical performance match your investment strategy and risk tolerance. With its impressive returns and strategic position in a key area of national development, PAVE could be a valuable addition to diversify and strengthen your investment portfolio. Now might be the right time to consider how it fits into your financial goals.
Concluding Remarks
As the U.S. emphasizes infrastructure enhancement through comprehensive legislative support, the Global X U.S. Infrastructure Development ETF (PAVE) emerges as a strategic opportunity for investors. PAVE targets sectors set to benefit from federal infrastructure initiatives, such as construction and materials. These sectors, while not traditional growth sectors, are poised for expansion due to national investment priorities. This positions PAVE to offer savvy investors strong potential returns aligned with broader economic goals.
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