Skip to main content

Download

Audience for the document: Share Class: Language of the document:

Download

Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest

Please enter valid search characters

November 2021 / INVESTMENT INSIGHTS

U.S. Infrastructure Bill Could Strengthen Secular Trends

Investors should remain selective and focus on fundamentals.

The recently ratified bipartisan USD 1.2 trillion Infrastructure Investment and Jobs Act (IIJA) comprises about USD 650 billion in reauthorized spending and USD 550 billion in new expenditures. These earmarks include significant funding for surface transportation upgrades over the next five years that would help to improve economic productivity. Line items that help to modernize the power grid and expand the network of charging stations for electric vehicles would provide further support for key secular trends.

Surface Transportation and Municipalities

Transportation‑related investments account for a little more than half of the USD 550 billion worth of new spending in the bipartisan infrastructure bill, including USD 110 billion for roads and bridges, USD 66 billion for passenger and freight rail, USD 25 billion for airports, and USD 17 billion for ports and waterways.

This influx of federal money should pull forward the start date for needed infrastructure upgrades while increasing the market’s confidence in the potential capacity of municipalities to pay for these projects. Research conducted by the National Association of State Budget Officers estimates that federal grants historically have accounted for almost one‑third of state government funding.1 Although the project‑specific competitive federal grants available under the auspices of the IIJA run for five years, these earmarks potentially could cover a larger proportion of a project’s total cost. At the same time, T. Rowe Price research shows that many municipalities’ fiscal health strengthened during the coronavirus pandemic, as in some instances the hit to tax revenues did not necessarily materialize to the extent expected.

This influx of federal money should pull forward the start date for needed infrastructure upgrades while increasing the market’s confidence in the potential capacity of municipalities to pay for these projects.

The projects themselves have the potential to improve productivity by reducing the dangers and business disruptions that become more common as infrastructure ages. These upgrades also have the potential to address bottlenecks where investment in physical assets has not kept up with how public and business needs have evolved.

Key Areas of New Spending Authorized by the IIJA

Road infrastructure tops the list for new spending

Key Areas of New Spending Authorized by the IIJA

As of November 15, 2021.

Source: WhiteHouse.gov.

However, investors seeking companies that might benefit from a wave of infrastructure spending should bear in mind that hastening the start dates for needed projects does not necessarily expand the overall addressable market or contribute to fundamental changes in longer‑term industry dynamics. In our view, selectivity and a deep understanding of companies’ business models could be key to identifying potential investment opportunities.

Broadband, Power, and Electrification

Outside of traditional transportation‑related projects, the bipartisan infrastructure package includes USD 65 billion to improve internet connectivity in unserved and underserved communities. Given the importance of broadband access for remote work and school, these investments have the potential to improve the dynamism of the economy, especially in rural areas.

The infrastructure measure also finances the procurement of electric buses and charging stations for electric vehicles. These line items are significantly smaller than the earmarks for traditional transportation infrastructure. That said, we would expect this funding to contribute to the adoption of electric vehicles—a powerful secular trend that should accelerate as carmakers expand their offerings in this segment.

Although the bipartisan infrastructure package does not explicitly include funding for renewable energy, the massive USD 73 billion for upgrades to the nation’s electricity grid will be critical to building a flexible, resilient system that can accommodate variable generation from wind and solar power as well as increased demand from the electrification of transportation and—perhaps in the future—residential and commercial heating.

In the new year, we would expect the Biden administration to pursue its agenda primarily at an agency level, through both the execution of prior legislative changes and regulatory actions.

IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.

Previous Article

November 2021 / INVESTMENT INSIGHTS

The Bond Market Has Woken From a Deep Slumber
Next Article

November 2021 / MARKET OUTLOOK

Global Asset Allocation: November podcast
202111-1934300

October 2021 / BLOG

Legislation Supporting Clean Energy Would Impact Key Sectors

Legislation Supporting Clean Energy Would Impact Key Sectors

Legislation Supporting Clean Energy Would...

Modernizing the electric grid is key for scaling up renewable power

By Katie Elizabeth Deal

Katie Elizabeth Deal Investment Analyst

You are now leaving the T. Rowe Price website

T. Rowe Price is not responsible for the content of third party websites, including any performance data contained within them. Past performance cannot guarantee future results.