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Fiscal Stimulus and Infrastructure

With infrastructure getting a boost across the world from government stimulus packages, how can you make the most of the potential rebound?

Article updated: 25 August 2020 11:00am Author: Tracy Zhao

One way to put more money into the economy is to increase public spending on infrastructure. In the short-term, building infrastructure can utilise spare capacity in the economy and create jobs. In the long run, quality infrastructure boosts productivity and enhances the quality of lives.

COVID-19 demands a stimulus response; the nature of infrastructure spending could play an important role. China’s recovery plan includes large swathes of infrastructure investment, primarily digital or housing projects such as 5G investment and upgrades in public housing, but also an additional RMB100bn fund for national railways. New Zealand has allocated an extra NZ$3bn for jobs-heavy infrastructure projects, including the construction of 8,000 new public housing units. The UK government has set out an initial £5bn of extra infrastructure spending. The European Council also noted the need to rapidly implement infrastructure projects in its latest meeting.

Investing in infrastructure


Our Multi Manager funds have been keen on the long term structural earnings growth offered by many infrastructure assets by investing in funds that are exposed to global listed assets such as toll roads, airports, railroads, utilities, pipelines and wireless towers. The near term economic stimulus measures will also widen investment angles for the medium term and translate into further structural growth.

Investors could participate in infrastructure assets via funds that invest in the listed companies that own the assets, such as First State Global Listed Infrastructure. The portfolio mixes its defensive and growth holdings according to the economic or business cycle and is mainly invested in the developed markets, especially Europe and North America. Incepted in 2007, the fund has been managed by a stable team and has been process tested through diverse market conditions for over a decade.


Investing in the companies that provide services to infrastructure could be another choice. Morgan Sindall, a medium-sized company, derives most of its revenues from construction but also has businesses involved in affordable housing, fit out and infrastructure services, covering a wide range of sectors from healthcare to defence and energy. Its recent interim result has been well received and the company has seen an increase in its order book for both the construction and infrastructure operations.

Building infrastructure needs materials and metals. CRH, an Irish company listed in London, supplies a wide range of materials across Europe and America for the construction sector, including cement, concrete, aggregates, asphalt/bitumen and brick. It is well placed to benefit from any increase in infrastructure spending in the US as more than half of its revenues now come from there.


WisdomTree Industrial Metals ETC tracks Bloomberg Industrial Metals Sub-index, which is designed to reflect the movement in the price of the futures contracts of the industrial metals, with approximate exposures of 41% Copper, 23% Aluminium, 19% Nickel and 17% Zinc. A recent rebound of economic activity in China has already seen a positive sign for trading activities.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Tracy Zhao

Investment Research Analyst & Trainee Investment Manager

Tracy has a master’s degree in Financial Analysis & Fund Management, and a background in financial services and auditing. She supports our Platinum 120 preferred range of funds and works closely with our fund managers, undertaking fund research, analysis and MI reporting.

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