Greetings!
Below please find the ETF Spotlight newsletter for the week of November 1, containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market. The focus of this week's edition is infrastructure ETFs. Feel free to share it with others who may be interested.
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In this week's issue
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 Infrastructure ETFs
- Chart of the week: Infrastructure ETFs
- Fund Focus: EGS INDXX India Infrastructure (INXX)
- Revisions, asset flows & short interest
- 2011 cash flow per share estimates, growth rates, and cash flow multiples for major ETFs
- Market monitor - movers & categories
To download the full newsletter click here.
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| Chart of the week |
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Infrastructure ETFs
Infrastructure funds have attracted a lot of attention in recent years. Broadly speaking, emerging markets have the need for new infrastructure and are flush with cash to build it, while cash-strapped Western governments have been selling off assets they once operated such as ports, bridges & toll roads, and power grids.
Thus there is a big difference underlying these funds: while some are focused on the materials, industrials and financials required to build new infrastructure, others are dominated by the utilities that run existing infrastructure. Examination of the underlying securities is essential in this sector, because many of the firms in these funds are engaged in activities outside pure infrastructure projects, making it impossible to generalize about how infrastructure spending will translate into profits.
This week's chart shows the price-to-cash flow multiples (on 2011 cash flow estimates) for the eight infrastructure ETFs currently available. The Emerging Global Shares INDXX India Infrastructure fund (INXX) has the highest P/CF multiple of any infrastructure fund, a lofty 9.9X 2011 estimates, but also enjoys the highest ALTAR ScoreTM. This week's Fund Focus explains why.
Download the full newsletter here.
Chart: Infrastructure ETFs
Price-to-cash flow multiples, 2011E
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| Fund Focus |
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Emg. Global Shares INDXX India
Infrastructure (INXX)
Even though INXX has the highest P/E and cash flow multiples of any infrastructure fund, it also enjoys the highest ALTAR ScoreTM. Firms in the fund are of course engaged in businesses outside of infrastructure projects, which explains the boom-bust nature of profits, but the secular growth of sales and book value has been impressive. And next year looks better, as earnings are forecast to rebound from their currently depressed levels.
To download the full newsletter, click here.
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