First, the background: As illustrated in the chart below, for almost two decades, the U.S. has been underinvesting in infrastructure.

BEA

All that under-allocation is about to change with the passage last November of the Infrastructure Investment and Jobs Act (IIJA) into law which has authorized the spending of $1.2 trillion (see below) with $550 billion of new spending over the next 5 years. In excess of $110 billion of spending across 4,300+ projects has already been awarded, announced, or initiated.

In addition to the passage of the federal infrastructure bill, a number of states are also joining in with their own infrastructure packages totaling in excess of $17.5B to date. 

The munKNEE Infrastructure Bill Beneficiaries Index declined 8.1% in September, but, as bad as that was, 7 of the constituents outperformed the S&P 500's decline of -8.6%. The Index has now outperformed the S&P 500 by -21.2% vs. -24.8% YTD.

Below is the performance of the 12 constituents in the Index in September, in descending order, in comparison to that of the S&P 500:

Constituents That Outperformed the S&P 500 In September

1. ChargePoint Holdings (CHPT): UP 1.8% 
   • The planned building of 250,00 customized charging stations should be a major benefit to CHPT.
2. Eaton Corp. (ETN): DOWN 2.9% 
   • As a major supplier of electrical components and systems the integration of wind and solar farms into the national grid should benefit ETN considerably.
3. Freeport-McMoRan (FCX): DOWN 3.4%
   • With 43% of all copper mined being used in building construction, with another 20% used in transportation equipment, the Infrastructure Bill should benefit FCX.
4. Vulcan Materials (VMC): DOWN 4.3% 
   • Being America's largest producer of construction aggregates, asphalt and cement should benefit VMC going forward.
5. Martin Marietta Materials (MLM): DOWN 5.4% 
   • As a producer of crushed sand and gravel products, ready-mixed concrete and asphalt, paving products and services, dolomitic lime for the steel and mining industries, and chemical products for use in flame retardants, wastewater treatment, and assorted environmental applications should be of major benefit to MLM.
6. United Rentals (URI): DOWN 6.8% 
   • As the provider of specialty equipment specifically designed for underground work and fluid treatment URI should benefit from business generated by the infrastructure bill.
7. Deere & Company (DE): DOWN 7.8% 
   • As a major producer of earth-moving and road-building and forestry equipment, DE should see an increased demand for its machinery.

Constituents That Underperformed the S&P 500

1. Caterpillar (CAT): DOWN 9.3%
   •  As the manufacturer of asphalt pavers, compactors, excavators, pipe layers, backhoes, etc., CAT will benefit from future major infrastructure projects.
2. Oshkosh Corp. (OSK): DOWN 11.4%
   • As the manufacturer of specialty trucks used in heavy construction projects as well as cement mixers, truck-mounted cranes, "cherry pickers" and other hydraulic lifting systems OSK is well placed to meet the demand for the electrification of the federal vehicle fleet.
3. Brookfield Infrastructure Corporation (BIPC): DOWN 13.6%
   • With operations spanning utilities, transportation, energy, and even data infrastructure, BIPC should benefit enormously from business generated by the infrastructure bill.
4. Crown Castle International (CCI): DOWN 13.8% 
   • As one of America's leading wireless tower real estate investment trusts, CCI should benefit from the expansion of mobile data usage.
5. Nucor (NUE): DOWN 18.2% 
   • As the largest domestic steelmaker in North America, the pent-up demand from automakers and other industrial buyers should benefit NUE considerably going forward.

Federal, state, and local infrastructure agencies will be spending like they haven’t in almost two decades, and this is going to go on for years, so now might be the ideal time to do your own due diligence, decide which companies you think have the best prospects going forward, invest in them and capitalize on the opportunities.

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