Yahoo Finance’s Alexis Christoforous and Josh Duitz, of Aberdeen Standard Global Infrastructure Income Fund, discuss the focus on renewewable energy amid a Biden preidential victory.
Video Transcript
ALEXIS CHRISTOFOROUS: President-elect Joe Biden’s Build Back Better economic recovery plan would spend over $7 trillion. Some of that would include investments in infrastructure. Here to talk about where investors might find the best opportunities is Josh Duitz, portfolio manager of the Aberdeen Standard Global Infrastructure Income Fund.
Josh, it’s good to have you here on the show. So give us an idea of what kind of infrastructure spending you would expect to see under a Biden administration. Because we know the Trump administration talked a lot about it. We didn’t really see anything tangible happen. And Biden could be in the White House with a split Congress.
JOSH DUITZ: So we think, first of all, Biden is very much interested in an ambitious climate agenda. He’s talked about a $2 trillion green stimulus package. So we think that would only accelerate it. We believe, actually, renewables is just in the very early stages of a multi-decade spending on renewables.
In 2018, about 7% of our electric generation came from wind and solar. That is expected to grow about– to about 40% by 2040. So very early stages. About $13.3 trillion is expected to be spent by 2050 on electric generation. Over 75% of that is on renewables.
So we think, like I said, President-elect Biden would accelerate it. But there are great opportunities regardless of what happens. The other area we think there’s good opportunities is in the communication side.
A couple of weeks ago, Apple introduced the 5G phone. We see Verizon, T-Mobile, AT&T all talking about nationwide 5G wireless. We think a good opportunity is in the tower side. We think this spending on 5G is going to happen over the next 5 to 10 years. So those are the two really big opportunities.
And again, President-elect Biden talked about $20 billion in investment on broadband for rural areas, right. As we’re sitting here on Zoom and people are using the wireless mobile devices for school and work, we see the need and how it has really become an essential service. So those are two real areas of growth, we believe.
ALEXIS CHRISTOFOROUS: That’s great. I think folks really like when we can get as specific as possible. Do you have any picks within those two areas that you can share with people watching?
JOSH DUITZ: Sure. We’ll start on the 5G side, on the cell tower side.
We really like Cellnex, which is a European cell tower. And they are consolidating the industry in Europe. Just this morning, they announced an acquisition, about a $10 billion acquisition, of cell towers from Hutch. So very timely.
And if you see what’s happened in the US, with the independent tower companies such as AMT and Crown Castle– which we both also like– that’s what’s happening in Europe now, and they’re a little further behind. On the renewable side, we like companies like RWE in Germany, EDPR in Portugal, and Atlantica Yield here in the United States. They’re all really focused on renewables and the growth of renewables. And we think, like I said, good opportunities for not only the next six months, for the next several years.
ALEXIS CHRISTOFOROUS: Are you– you sound pretty confident that you think these things are going to happen, even if we have a split Congress. Do you think that infrastructure is one of those bipartisan things that both sides of the aisle can get around and actually get something done for the American public?
JOSH DUITZ: You know, both sides have talked about infrastructure for a long time. And it is, like you said, the one area I do think they agree on. The areas we’re investing in is not dependent on an agreement or a stimulus package. We think if that does happen, that would only accelerate it. So we view that as a free call option. We’re not relying on that to happen.
But it’s clearly what they’ve talked about. And it would be a great area to invest, especially with interest rates this low.
ALEXIS CHRISTOFOROUS: Where do you see– geographically speaking– where do you see the most opportunity in pockets of the country?
JOSH DUITZ: So we’re global investors at Aberdeen, and the Aberdeen Infrastructure Income Fund invests globally. So when we look at it, we see there’s great investments for renewables here in the United States. And communications side, we think it’s even more apparent in Europe because of they’re just starting to actually selling their cell towers to cell companies.
So it really depends on which sub-sector you’re looking at for the opportunities. But we do think there’s opportunities in both.
ALEXIS CHRISTOFOROUS: All right. Josh Duitz of Aberdeen Standard Global Infrastructure Income Fund. Thanks for talking a little infrastructure with us. We’ll see what can get done there next year under a Biden presidency.
