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Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

Infrastructure Investment and the American Recovery & Reinvestment Bill

January 20, 2009

Infrastructure 012009John Derrick, Director of Research and co-manager of the Global MegaTrends Fund (MEGAX)

Details of the much-discussed “American Recovery and Reinvestment Bill of 2009” were released last Thursday. The bill calls for $825 billion in stimulus, of which roughly $550 billion is allocated for stimulus spending and $275 billion is for tax cuts.

Here’s a quick glance at some of the highlights.

The bill calls for energy infrastructure investments totaling $54 billion. This includes $32 billion to transform the nation’s energy grid, focusing on renewable technology. Another $16 billion is for public housing repair and $6 billion to weatherize modest-income homes.

The bill has funds for investment in technology infrastructure, which gets less attention than traditional infrastructure elements like utilities, highways and bridges but is equally important. Technology investments total $16 billion which is split between $10 billion for science, research and instrumentation facilities and the other $6 billion to expand internet access to underserved areas.

Technology plays a pivotal role in both American business and leisure life, so the investment is key in keeping America competitive on the global landscape.

Transportation infrastructure investments account for just over 10 percent of the bill—totaling $90 billion. The bulk of this money will go towards highway construction and modernizing public and federal buildings, receiving $30 billion and $31 billion respectively.

An additional $19 billion is for clean water and flood control, and $10 billion is specifically targeted for transit and rail improvements aimed at reducing traffic congestion and gasoline consumption.

This isn’t a complete list, but, all told, the total infrastructure allocation comes to $174 billion.

The American Society of Civil Engineers reports that it would take $1.6 trillion over the next five years to fix the nation’s inadequate roads, bridges, water systems and other infrastructure. The $174 billion is a great start, but we still have a long way to go.

Globally, it’s been estimated that infrastructure investments will total $40-65 trillion by 2030 driven primarily by emerging markets looking to build new highway networks, aviation systems and seaports.

The proposed legislation helps validate the infrastructure story here in the U.S. and America will play a key role in solidifying the global infrastructure build-out as a dominant global megatrend.

Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

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