Infrastructure and the election

Traditionally, infrastructure has called to mind roads, bridges, airports and the like. It has comprised the physical resources required for — usually — public installations or activities. Today’s more diversified view of infrastructure focuses on all of those traditional things, such as ports and highways, as well as thoroughly modern ventures, such as the structures that enable internet access or mechanisms to generate “clean” electricity.

It’s this broad-based vision of infrastructure that is important for investors to keep in mind as we move from the coronavirus-induced recession toward economic recovery, especially in these weeks leading up to a U.S. presidential election in November.

Why is infrastructure top of mind this election?

Economic recovery from the fallout of the coronavirus crisis is a key theme this election season. While much of the economic stimulus to this point has focused on short-term solution, both parties agree that an infrastructure stimulus package could, if done correctly, facilitate long-term recovery and economic growth.

Despite this agreement about the potential of government investment in infrastructure, getting Congress to agree on how to go about it is a different story. With partisan politics reaching new highs in recent months, we’re not terribly confident in the ability of Congress to find common ground on infrastructure before the election. Therefore, the responsibility of determining a future infrastructure-investment stimulus plan will most likely rest on the shoulders of the election victor. Unfortunately, until a decision is made, the economy will suffer all the more for it.

How are the candidates planning to leverage infrastructure to stimulate the economy? What do these plans mean for the infrastructure sector?

Currently, the overwhelming majority of public infrastructure investment happens at the state and local level. However, states and municipalities are in the midst of budget shortfalls thanks to the coronavirus pandemic. The infrastructure sector is in need of either direct federal investment, indirect federal investment via stimulus plans, or a combination of the two.

Both Democrats and Republicans have plans for trillions of dollars of infrastructure spending. One possibility both parties have explored is the creation of an infrastructure bank. The government would fund this type of public bank, which would use public and private resources to fund infrastructure projects. If such an infrastructure bank were created, it would allow for increased private and public investment in this space.

Where do you foresee opportunities in public and private infrastructure markets around the election?

Opportunities for public infrastructure investment will remain largely at the state and municipal level. Private infrastructure investment can be accessed in two ways. The first is direct investment in private infrastructure companies. The second is through investment in publicly traded infrastructure companies. These companies are public in the sense that they are publicly traded, but private in the sense that they are companies, rather than government entities. Each of these presents opportunities around the election and beyond.

In our view, investing in companies that focus on telecoms and renewables may present some of the most compelling opportunities, as we believe these two areas have been and will remain in focus in the short and longer terms.

What specific investments/investment vehicles do you suggest investors and advisors look at if they want to get into the infrastructure space?

While specific investments and investment vehicles will vary from one investor to the next based upon individual goals and risk tolerance, we believe that the closed-end-fund (CEF) universe may offer compelling opportunities to invest in infrastructure. Historically, private infrastructure investment has only been available to institutional investors. Today, CEFs open this space up to retail investors as well.

Its makes more sense for CEFs, compared to open-end funds and exchange-traded funds (ETFs), to invest in private infrastructure. This is because private investment in infrastructure tends to be illiquid. CEFs work with a fixed pool of capital, so illiquid positions like these may lend themselves to CEFs more than open-end funds or ETFs, which require greater liquidity. Within infrastructure, however, CEFs aren’t limited to private investments. They can also invest in public infrastructure or a combination of both private and public, which is unique to CEFs.

Any predictions for the rest of 2020 and beyond in terms of the economic recovery?

In our view, telecoms, specifically towers, and renewables present opportunities for longer-term economic recovery and growth. We believe that these areas will remain critically important for the remainder of 2020, into next year and beyond.

Within telecoms, 5G development is a key area of focus. This will remain relevant through the 2020 election season, as both parties prioritize enabling and expanding 5G as part of infrastructure investment. President Donald Trump, for example, has previously stated that “secure 5G networks will absolutely be a vital link to America’s prosperity and national security in the 21st century,” according to the White House. On the Democratic Party side, presidential candidate Joe Biden’s official platform includes “expanding broadband, or wireless broadband via 5G, to every American,” so that all Americans can participate in an increasingly virtual economy.

A robust 5G rollout will require a dense network of towers. However, building towers requires a huge upfront cost. The telecom industry has already invested heavily in these towers. However, a government-led investment could provide a quantum leap for the nationwide rollout of 5G, high-speed internet connectivity. In fact, the number of individuals that could stand to gain from 5G implementation could range anywhere from 25 million, per one government agency’s calculations, to almost 160 million, per Microsoft’s estimate. Either way, millions of people would have better access to higher-speed internet. This could impact, for one, hundreds of thousands of U.S. companies, which could increase their achievement potential. But beyond this, it could create massive educational opportunities. This is especially true in rural areas, which may have spottier internet connection today, and whose schools may have lagged as dependence on virtual capabilities increased during the coronavirus pandemic.

We also see compelling opportunities in the renewables space. As the demand for “cleaner” energy and more sustainable practices across all industries increases, so will the need for renewables. Candidate Biden’s platform, in particular, makes explicit reference to “green” infrastructure. According to Biden’s official campaign platform, he views the energy sector as an opportunity for investment and job expansion as companies transition toward cleaner, more sustainable energy-generation and consumption. Regardless of who wins the election, the renewables space is an area for innovation and opportunity that we think investors will be considering through the end of 2020 and further.

For more information on investing in infrastructure, visit

A version of this article titled "Q&A: Aberdeen Standard Investments on Infrastructure Investing During the Election" originally appeared on U.S. News and World Report on October 14, 2020


Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. There is no assurance that the Fund will achieve its investment objective. Past performance does not guarantee future results.

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Equity stocks of small and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies. Dividends are not guaranteed and a company’s future ability to pay dividends may be limited.

Infrastructure-related issuers may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors.



The value of investments, and the income from them, can go down as well as up and you may get back less than the amount invested.