A New Way to Invest in Infrastructure

Looking under the hood, I believe that IGF is the better choice than GII for investors who prefer not to hold individual stocks. As the segment mix above shows, IGF allocates more to mundane assets such as toll roads, which I think offer more diversification.

For example, IGF has a heavier weighting than GII in toll roads including Abertis(ABFOF Quote - Cramer on ABFOF - Stock Picks) from Spain, TransUrban(TRAUF Quote - Cramer on TRAUF - Stock Picks) and Macquarie Infrastructure Group (MCQRF Quote - Cramer on MCQRF - Stock Picks) from Australia, along with Macquarie Airports(MQRSF Quote - Cramer on MQRSF - Stock Picks) and Fraport (FPRUF Quote - Cramer on FPRUF - Stock Picks). This should help IGF hold up better during downturns and reduce its correlation to U.S. stocks.

Toll roads and airports in other countries are not vulnerable to a U.S. slowdown, which is what owning this asset class is all about. It's possible that a U.S. slowdown could impact these stocks indirectly; perhaps these countries would export less, leading to a slight reduction in traffic. But traffic on these roads and runways is largely driven by domestic demand. There are 1000 new cars purchased in China every day, and those new-car buyers are going to go on the highway. IGF has two Chinese toll road stocks in it.

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