This Infrastructure ETF is Worth Holding for Decades

The BMO Global Infrastructure ETF (TSX:ZGI) aims to replicate the performance of the Dow Jones Brookfield Global Infrastructure Index.

The ETF rose 1.06% on October 30 which put it back into positive territory for 2018. The fund has climbed 4.8% over a three-year span, but its long-term potential is what is enticing.

Back in the summer of 2017 the G-20-backed Global Infrastructure Hub warned that a fifth of the $94 trillion in global infrastructure investment needed by 2040 risked being defunded if current spending trends continue.

The group said that infrastructure spending needs to rise 3.5% from the current 3% of GDP. This investment will be crucial to supporting future economic growth.

Infrastructure spending is a popular political platform, one that was emphasized in the victorious campaigns for U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau over the past several years. Unfortunately, both governments have failed to deliver on the increase in investment.

According to the report, the United States currently has the largest gap in spending at $3.8 trillion. The report estimates that $3.7 trillion is required to meet demand equivalent to the economic output of Germany.

Some of the top holdings in the BMO Global Infrastructure ETF include American Tower Corp., Calgary-based Enbridge Inc., and TransCanada Corp. Top oil and gas companies have also started to invest heavily in renewable energies.

In order to meet United Nations Sustainable Development Goals, investment in infrastructure will need to increase to 3.7% of global GDP between now and 2030.