Infrastructure

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Building a Better World

    March 16, 2010

Infrastructure Webcast 0310There are 6.7 billion people living on the planet today, and the population is growing.  Growth in emerging markets and the shift of population to urban centers is creating greater demand for resources, services and infrastructure.

The estimated needs for infrastructure spending are staggering—trillions of dollars across the world to develop water, energy, transportation and telecommunication infrastructure.

How can you take advantage of these infrastructure investment opportunities? 

I invite you to participate in this engaging webcast discussion with members of the portfolio management team for our infrastructure fund, the Global MegaTrends Fund.

Also joining the webcast will be special guests from Macquarie North America, a firm that specializes in infrastructure advisory services.

You don’t want to miss this opportunity.

Register Now

 

Transportation of the Future

    December 02, 2009

2009-12-2 GCC MapWarren Buffett isn’t the only one who sees trains as the transportation of the future. Oil-rich nations in the Middle East are converting their petrodollars to railroads in one of the world’s biggest regional infrastructure build-outs.

The Gulf Cooperation Council has plans for a 1,300-mile railway linking all six of its member states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). Combined spending is estimated at more than $100 billion.

That is just a fraction of the amount available for investing to support future growth. Combined assets for the region’s four largest sovereign wealth funds (Abu Dhabi, Kuwait, Qatar and Saudi Arabia) total $1.15 trillion, and that’s just a portion of the wealth amassed in that dynamic part of the world.

In September, a $7.6 billion rail system was opened in Dubai to try to ease its bumper-to-bumper road congestion. An estimated 1.8 million passengers will use the line each day.

Saudi Arabia is building a $5.3 billion rail line to connect the Islamic holy cities of Mecca and Medina as part of the country’s $400 billion infrastructure plan.

And last week, Qatar’s sovereign wealth fund signed a $26 billion construction deal with German railroad operator Deutsche Bahn for a local system for Doha, Qatar’s capital and largest city, and freight lines to bordering trading partners. Qatar is the world’s largest producer of liquefied natural gas, a rapidly growing source of energy.

The population of Doha is expected to double over the next 10 years and the country, which hosted the 2006 Asian Games, is said to be putting together bids for the 2020 Summer Olympics and 2022 World Cup.

A Qatari official hailed the 15-year Deutsche Bahn deal as “the next step in the creation of this visionary Qatari project that will truly revolutionize the ease and convenience by which people travel.”

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

 

Five Thousand Pounds of Steel are Falling

    October 30, 2009

San Francisco Bay Bridge 103009Drivers on San Francisco’s Bay Bridge were greeted by 5,000 pounds of metal on Wednesday when a recently repaired eyebar snapped under pressure from high winds.

Unlike the 2007 bridge collapse tragedy in Minneapolis, no one was killed and only one motorist suffered minor injuries. A lucky break since the accident happened during rush hour on a bridge that services 280,000 commuters every day.

This isn’t the first newsworthy item in the Bay Bridge’s history, as a 50-foot section of the upper level collapsed onto the bottom level during the 1989 Loma Prieta earthquake. The image was quickly beamed to millions of homes around the U.S. as they were tuning in for Game 2 of the World Series.

Though a major disaster was averted this time, the clock is ticking unless measures are taken to rebuild, reinforce and restore America’s crumbling infrastructure.

One in four of America’s bridges are either structurally deficient or functionally obsolete, according to the American Society of Civil Engineers. Overall, they rate America’s 600,000 bridges a "D."  The ASCE estimates there is a nearly a $7 billion gap between what is needed to be invested in order to improve conditions versus what actually is being invested.

Hopefully, that and similar domestic infrastructure spending gaps will start to close before the problem becomes a crisis.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-760

 

Big Cities, Big Opportunities

    October 23, 2009

One of the biggest drivers of global infrastructure is the rapid rate of urbanization experienced in the developing world.

The reason is simple – roughly 70 million people per year in developing countries are moving to cities, so there will need to be more roads, water systems, housing and electrical generation.

Nowhere is this trend more apparent than in China, which already has 100 cities with more than 1 million people. It is expected to eventually have 30 cities with more than 10 million people.

Urban Populations chart 102309

As you can see in the chart from UBS, Asia will be the main source of this urban growth. The United Nations says that over 1 billion Asian people will move to urban areas by 2030. Another 500 million people are expected to migrate to urban areas in Africa.

While this trend has picked up in pace in recent years, the growth of urban centers in the developing world has already been an established trend. Of the 20 largest urban areas in the world in 2005, only four were in the developed world (Tokyo, New York, Los Angeles and Osaka, Japan). 

The infrastructure build-out truly is a global opportunity. As much of the infrastructure focus in the developed world centers around repair and replacement, the focus in the developing world is around providing people with basic needs taken for granted by many of us.

We believe emerging-market governments that commit to ambitious infrastructure programs will be the ones with the best economic growth prospects in the coming years.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-740

 

A New Way of Thinking About Infrastructure

    October 19, 2009

Wind Energy 101909We don’t often talk about the U.S. Global Investors mutual funds in this blog, but this time it’s warranted because we believe we’re at the front end of a wider trend.

BusinessWeek’s web site has posted a good story today about how infrastructure investment is being redefined – as the world grows and technology changes, no longer is this sector limited to the traditional plays of construction and engineering companies, utilities and the like.

Jack Dzierwa, one of the managers of our Global MegaTrends Fund (MEGAX), was among the fund managers interviewed for this informative story.

Jack discussed how the fund’s management team takes a wide view of what constitutes global infrastructure – privatized airports, alternative energy, water and telecommunications are among the investment possibilities.

He also focused on the U.S. Global view that the infrastructure opportunity is especially attractive in emerging markets, given their higher growth rates and their need to build out their infrastructure to be globally competitive.

Read the Global Infrastructure Story

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

Total Annualized Returns as of September 30, 2009
Fund One-Year Five-Year Ten-Year Gross Expense Ratio
Global MegaTrends -11.00% -0.28% 1.50% 2.28%

Gross expense ratio as stated in the most recent prospectus. Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings.  Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees of 0.25%) which, if applicable, would lower your total returns.  Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

By clicking the link in this article, you will be redirected to a third-party website. U.S. Global Investors does not endorse all information supplied by this website and is not responsible for its content.

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. Holdings in the Global MegaTrends Fund as a percentage of net assets as of September 30. 2009: SNC Lavalin Group 1.54%, Cohen & Steers Capital Management 0.0%, Empresas ICA 0.0%, Companhia de Concessoes Rodoviarias 0.0%, Cascal NV 0.0%, Eutelsat Communications 0.0%, SES SA 0.0%, American Tower Corp. 0.0%, Vivo Participacoes SA 2.16%, Grupo Aeroportuario del Sureste SA B de CV 2.92%, Alpine Global Infrastructure Fund 0.0%, Cohen & Steers Global Infrastructure Fund 0.0% #09-726

 

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