The Infrastructure Opportunity

This summer a 90-year old pipe burst in Los Angeles, flooding the UCLA campus with 20 million gallons of water.  The estimated $8.1 billion repair cost equals the entire annual municipal budget.  The average age of water pipes east of the Mississippi is more than 70-years old while the U.S. public investment in infrastructure is at its lowest level since World War II.  But with government budgets still strained from the 2008 recession, private companies are stepping in to help construct, finance, and manage these projects.

We recently added a Global Infrastructure Fund to our investment portfolios to take advantage of these opportunities and invest in companies across the globe that will be participating in the $60 trillion in infrastructure investment in the next decade.  These opportunities include not only maintaining highways and utilities, but building out America’s new energy sources, and providing cell towers and satellites for our smartphones.  Pipelines, shipping terminals, and airports are filling up as global trade increases. These are the type of companies that Deutsche Global Infrastructure Fund invests in for the U.S. and across the globe.

Infrastructure is a unique asset class that will be facing huge demands in the years to come. We have chosen a fund that has been a leader in this type of investing and these stocks fit well with our All Star philosophy-providing less risk than the stock market and adding some inflation protection for the future. We are always looking for new “All Stars” in our line-up.