Despite the market decline, engineering projects have helped Bechtel deliver record revenue in 2007 and book new projects that could make 2008 even more profitable. Those people who are hoping that privately held nation-builder Bechtel will one day issue common shares to the public would be better off spending time evaluating the potential of new global engineering ETFs.

Investing in global engineering ETFs gives investors the option to invest in this growth using public companies. (If you're an investor who likes to understand how and why your investment products work, then read An Inside Look At ETF Construction.)

First Trust Infrastructure Fund
In October First Trust Advisors introduced the ISE Global Engineering and Construction Index Fund (NYSE:FLM). The majority of the fund's investments are in infrastructure companies located in Japan, France, the Netherlands and Spain. Approximately 25% of the fund's investments are in U.S. companies. U.S.-based companies among the fund's top-10 holdings include engineering firms URS Corp (NYSE:URS) and Fluor (NYSE:FLR) as of September 30, 2008.

InvescoPowerShares Infrastructure Fund
InvescoPowershares also introduced the Emerging Markets Infrastructure Portfolio (AMEX:PXR) in mid-October. While the FLM fund has a nearly 95% concentration in industrials as of September 30th, PXR is split with 55% of its investments in Industrials and 40% of its investments in materials. Familiar industrial holdings include Swiss-based automation technology firm ABB Ltd. (NYSE:ABB) and U.S. earth moving equipment supplier Caterpillar (NYSE:CAT). On the materials side, investors will be familiar with Brazilian miner Companhia Vale ADS (NYSE:RIO) and nickel miner Norilsk Nickel Mining & Metallurgical (OTC:NILSY).

Reason to Pay Attention
The International Monetary Fund expects the deceleration in the global economy to persist until sometime in 2009. The slowdown may make it difficult for construction and engineering firms to kick off new projects that don't already have financing lined up. However, in response to the economic difficulties, encouragement from banks to make sensible lending decisions could ultimately benefit infrastructure providers. For example, Bechtel has completed a high-speed rail transportation project in the U.K. and a nuclear energy project in the U.S. The two projects are examples of future infrastructure developments that could receive financing since both projects are aimed at improving the quality of life. One provides an alternative mode of transportation, while the other provides a non-petroleum based form of energy production.

Final Thoughts
The state of the world's economy may be in flux, but the upward trajectory of the world's population is intact. On a planet of approximately 6.7 billion people that is estimated to grow to 9 billion by 2042, we will need to build more bridges, roads and communication services. Infrastructure providers like Bechtel and its partners should be just fine in the long term.

Related Articles
  1. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  2. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  3. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  4. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  5. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  6. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  7. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  8. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  9. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  10. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center