U.S. Global Investors Searching for Opportunities, Managing Risk

Transcription

1 U.S. Global Investors Searching for Opportunities, Managing Risk Building a Better World The Global Infrastructure Opportunity US.FUNDS March

2 Today s Panel Portfolio Team for the U.S. Global Investors Global MegaTrends Fund Jack Dzierwa John Derrick Romeo Dator Macquarie Capital Advisors Team Nicholas Hann Sally Box 2

3 2009 Report Card for America s Infrastructure 3

4 Demographics is the Key Deng Xiaoping Half of the global population (>3 billion) is estimated to live in urban areas Projected urban population is larger than the entire world population in

5 Demographics is the Key 5

6 Total Projected Cumulative Infrastructure Spending : $41 Trillion Source: Booz Allen Hamilton, Global Infrastructure Partners, World Energy Outlook, Organisation for Economic Co-operation and Development (OECD). Boeing, Drewry Shipping Consultants, U.S. Department of Transportation 6

7 Macquarie Capital Perspective Recent developments in unlisted assets space How credit crisis affected funding for some major projects What to expect in USA, Canada, Mexico in unlisted assets in coming years 7

8 Macquarie Capital Perspective 8

9 Macquarie Capital Perspective 9

10 Macquarie Capital Perspective 10

11 Macquarie Capital Perspective 11

12 China Dominates Asia ex-japan s Infrastructure Spending Morgan Stanley estimates infrastructure spending in Asia ex-japan will reach US$3.1 trillion over the next five years ( E), about 6.2% of GDP. By comparison, annual spending in the US was just 1.7-2% of GDP over the past 10 years. E = MS estimates Source: CEIC, Morgan Stanley Research 12

13 25-30m People a Year Urbanizing in India and China from

14 Asia s Infrastructure Needs US$8 Trillion Required for Asia s Infrastructure between 2010 and 2020 In a recent study *, the Asia Development Bank estimated that overall national infrastructure investment needs in Asia would be around US$8tr between 2010 and The bank forecasts that 68% of this would be for new capacity and 32% for maintaining and replacing existing infrastructure. The average annual investment need would be US$730bn. * Infrastructure for a seamless Asia, Asia Development Bank,

15 China is Redefining Urbanization Scale From , Chinese cities will add more than 350 million people There will be more than 200 Chinese cities with more than 1m inhabitants There will be up to 50,000 new skyscrapers There could be up to 170 new mass transit systems By 2025, two-thirds of China s citizens will live in cities the population of the entire United States in Europe today there are only 35 cities of that size the equivalent of building ten New Yorks in Europe today there are about 70 that s nearly 1 billion people Source: McKinsey, September

16 Which Implies Large Increases in Resource Intensity Source: Global Insight for population distribution; Rio Tinto estimates for commodity expenditure profiles. Note: Expenditure profiles are based on Rio Tinto estimates of global income and consumption relationships and average real terms prices between Iron ore and hard coking coal expenditure calculated based on crude steel demand projections, assuming all met by blast furnace production at historic average export prices. 16

17 Steel Intensity 17

18 Global Water Scarcity 18

19 Global Water Use 19

20 Water Underinvestment 20

21 Global Water Issues 21

22 Russian Infrastructure Spending Russian State Infrastructure Spending = 6% of GDP Russian State US$900bn investment program 22

23 Russian Housing Demand Russian new housing stock completions growing 83% during , on our estimates Limited stock per capita (22.5sq. m) suggests a 30% upside to the average European levels Growing share of obsolete stock suggests more new stock completions as replacement Recovery of the Russian mortgage market is the strongest demand catalyst of the residential market Significant volumes of Federal budget spending on residential housing US$4.8bn in 2009 and US$4.6bn in

24 Electricity Production by Source, Nuclear Power Plant Capacity 24

25 Electricity Production, by Country/Region 25

26 Asia Dominates Nuclear Power Plant Construction 26

27 Expansion of Nuclear Electricity Generation, CAGR= Compound Annual Growth Rate 27

28 Composition of New Nuclear Demand, E 28

29 Global MegaTrends Fund Industry Breakdown as of 2/28/10 as a percentage of total investments Electric - Integrated 15.02% Cellular Telecommunications 6.63% Engineering/R&D Services 6.40% Water Treatment Systems 6.04% Airport Development/ Maintenance 4.89% Steel - Producers 4.39% Metal - Copper 4.28% Public Thoroughfares 4.24% Pipelines 3.89% Diversified Minerals 3.39% Marine Services 3.29% Reinsurance 3.12% Metal - Iron 3.12% Storage/Warehousing 3.08% Building Products Cement Aggregates 2.56% Other 25.67% 29

30 Global MegaTrends Fund Top Ten Holdings as of 2/28/10 as a percentage of net assets Grupo Aeroportuario del Sureste SAB de CV 4.24% Hyflux Ltd 3.73% CPFL Energia SA 3.10% Cia de Concessoes Rodoviarias 3.02% Teck Resources Ltd 2.93% Aegean Marine Petroleum Network Inc 2.85% FPL Group Inc 2.76% Berkshire Hathaway Inc 2.71% Novolipetsk Steel OJSC 2.70% Westshore Terminals Income Fund 2.67% 30

31 Global MegaTrends Fund Top Ten Regional Breakdown as of 2/28/10 as a percentage of net assets (Country of Incorporation) United States 23.01% Brazil 13.52% Canada 12.23% Mexico 5.83% Russia 4.97% China 4.35% Singapore 3.73% Cayman Islands 3.63% Marshall Islands 2.85% Turkey 2.28% 31

32 Disclosures Please consider carefully a fund s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting or by calling US-FUNDS ( ). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Holdings in the Global MegaTrends Fund as a percentage of net assets as of 12/31/09: Rio Tinto 0.00%, Toshiba 0.00%, Macdermott 0.00%. 32

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