ETF Expert

We've heard campaign speeches about it. We've speculated over the literal meaning as well as extended definitions. We even have several ETFs with the actual word in the title: (1) iShares Infrastructure Fund(IGF), (2) SPDR/FTSE Macquarie Global Infrastructure Fund (GII).

Not until recently, however, did we get a more precise outline of what the Obama administration plans to do to rebuild the nation's "infrastructure." Since it is President Obama's primary job creation approach, it may be worth looking at the areas of greatest interest to his team.

Specifically, President Obama is fixated on 3 core areas that may be described as follows:

A. Traditional areas like roads and power plants
B. New school buildings, energy-efficient government buildings
C. Internet access, information tech expansion

When it comes to traditional infrastructure, one could go with the conceptual ETFs mentioned above. However, the volume is light and the dividends aren't all that impressive. That's why my favorite choice for traditional infrastructure continues to be the widely traded, broader sector of Utilities (XLU).

Basically, where traditional infrastructure roams, you can be sure that the price movement of Utilities (XLU) will be remarkably similar. Take a gander.

Yet the other areas (B and C) above represent industries that are quite different from the typical understanding of infrastructure build-out. For instance, when we're talking about building schools or buildings, either from scratch or with "green" upgrades, we have to turn to two other ETFs.

There's only one true ETF that focuses entirely on energy efficiency through cleaner, greener methods, and that's the PowerShares CleanTech Fund (PZD).  Unlike the U.S. industrial revolution, the next wave of growth will be cleaner… more "resource-conscious." It follows that resource efficiency expertise, or "cleantech," is a tremendous Obama infrastructure asset.

And then there's one ETF that focuses not on the homebuilders, but rather, the commercial construction providers. Specifically, there's the PowerShares Building and Construction Fund (PKB).

Obviously, one should expect extreme price movement in both directions with this one due to the potential for the Obama plan versus the strong possibility of a continuing deterioration in commercial real estate projects. By way of example, PKB is up 20% over the last 3 months… but it is down more than 40% from its highs.

Last but not least, tech firms were among the top donors to the Obama campaign… and perhaps with good reason. The Blackberry-savvy President loves the internet. (I wonder if he properly thanked previous veep Al Gore for inventing the net!)

I've written at great length about the potential for the Networking Index Fund (IGN) in the recent past. With RIMM, Cisco and Qualcomm in the mix, you've got many of the top beneficiaries of any broadband access build-out.

Another possibility is the Broadband HOLDRS (BDH). The king of info-carrying capacity technology is Qualcomm… and therein lies the key to whether BDH succeeds or fails. 50% of its movement is attributed to Qualcomm alone, with a few other prominent holdings like Corning and Motorola. BDH recently climbed above its short-term moving average (trendline).

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.