Infrastructure investments may not be glamorous, but until flying cars become mainstream, trains, roads, and bridges will need to be maintained. In most of our major cities, subways and elevated trains carry millions of passengers, and freight trains carry a wide variety of consumables from coast to coast daily. The wise Fool looking for stable investments will realize that although infrastructure investing is no way to get rich quick, it is a relatively safe bet for slow but steady growth and diversification.

Our aging roadways
America's bridges and roadways came to mainstream attention in 2007 with the collapse of the I-35W bridge in Minneapolis and again, to a lesser extent, last May with the collapse of the I-5 bridge in Mount Vernon, Wash. Politicians are under enormous pressure to address defects in the existing bridges, as an estimated 260 million U.S. drivers put themselves at risk daily and one out of every nine bridges has been found to have some defect, according to a recent study by Transportation for America.

I-35W bridge in Minneapolis following the bridge's collapse in 2007. Source: Wikimedia Commons.

The Federal Highway Administration estimates that it will take $20.5 billion annually to address the defects in our highway infrastructure, while only $12.8 billion is being spent annually today. This leaves a $7.7 billion gap per year that needs to be filled, or human lives are at stake. Where is this money going to come from? The Highway Fund is all but broke. Enter the investment public-private partnership, or IP3, which is a combination of private and public investment designed to make citizens part-owners of their infrastructure. According to an American Enterprise Institute researcher:

The IP3 recognizes that you -- not the federal government or a private company -- own roads that have already been built. And it offers you an annual payment for investing in them. ... Under an IP3, a private company pays a public partner (like a state) a large upfront cash payment (called a concession) for the right to operate and collect toll revenue from an existing road network for a certain period of time. The IP3 locks away most of that concession payment -- and most of the toll revenue -- in a protected investment fund that pays an annual dividend to all households in the newly priced region. That helps offset the additional costs they will face from tolls, while recognizing that citizens are the true owners of the roads.

Many states are enacting new legislation to pave the way for public-private partnerships. This opens up new revenue streams for industry partners that will benefit investors as well as the general public. The governor of Colorado recently announced that the state will form a nonprofit organization focused on PPPs, and Washington state is encouraging PPPs for its seaports in order to win Asia-Pacific business.

So where can the wise Fool look to make sure investment dollars are in the right place?

Enter private activity bond funds
One way that PPPs raise capital is through private activity bonds, or PABs. These bonds are issued by state and local governments on behalf of a private user. It makes sense that PABs, which generally have higher returns than municipal bonds, would be raised for infrastructure as a public-private partnership. The downside of PABs (and funds that contain them) is that they can be subject to alternative minimum tax for high earners. The Department of Transportation has allocated $15 billion in transportation funds with tax-exempt interest rates in order to encourage private investment in public projects.

How can the average Fool find a way to reap the rewards?

Bond funds containing PABs
Let's have a look at three picks that will allow Foolish investors to play in this space. db X-trackers Municipal Infrastructure Revenue Bond (RVNU) is an ETF with 48% of it's holdings in transportation infrastructure bonds such as the New Jersey State Turnpike Authority and Texas Private Activity Bond. Dreyfus Municipal Bond Infrastructure Fund (DMB 0.27%) is a well-known, established fund. The Ivy Municipal High Income Fund (IYIAX) also holds Texas Private Activity Bonds and boasts one of the highest 10-year returns of any municipal bond fund -- unfortunately at a 5% rate.

Because of the recent Detroit bankruptcy disaster, almost all muni bond funds today are showing negative one-year returns. This Fool believes that given the current low prices, now is the time to buy.

It is important to note that all these funds are speculative in nature. Deutsche Bank's db X-trackers Municipal Infrastructure Revenue Bond ETF carries the highest risk, being the newest (it was established in June 2013). However, given that it's an ETF, it is the easiest to get into and out of quickly and can be played like a stock. It has no Morningstar rating as of yet and is benchmarked against the DBIQ Municipal Infrastructure Revenue Bond Index. So far this fund has closely tracked this index, trailing it slightly. With total net assets of $15 million, it's focused on holding only muni bonds that have dedicated revenue sources such as toll roads, bridges, and sewer systems, so risk is somewhat reduced.

In contrast to the Deutsche Bank fund, the Dreyfus Municipal Bond Infrastructure Fund has been around since October 1976. This gives the Foolish investor a chance to review the history and charts to spot trends and correlations with public policy and major events. It is not an ETF and has a minimum initial investment of $2,500, which makes it tougher to trade than an ETF but easy to hold on a long-term or dollar-cost-average basis (subsequent investments are only $100 minimum).  Dollar cost averaging is a really simple investment strategy that has been proven to win; all you do is just put equal amounts of money into one fund periodically (usually monthly or weekly)  This fund has returned 6.1% over five years but slightly less than 4% over 10 years (about a point less than the Ivy fund). It is rated three stars by Morningstar and has 70% of its assets allocated to revenue bonds for risk mitigation.

The Ivy Municipal High Income fund shows a five-year return of 9.4%, which is quite high for this type of fund. This fund holds 93.3% revenue bonds as opposed to 70% for the Dreyfus fund, which may account for the higher returns. It has been around since 1998 and boasts a five-star Morningstar rating for the five-year and 10-year periods. 73% of its holdings are bonds that mature in more than 20 years, so unless they are paid off early, this is a highly stable fund. The initial investment into this fund is only $500, making it easier for a Fool to get in!

In conclusion, America badly needs to reboot its aging infrastructure, and investors everywhere have been waiting for a boom. A way to make sure you get in on this boom safely is to invest in a diversified fund like one of the above. If this boom doesn't happen, it looks like you will get about 5% to 10% return on investment -- ho-hum, but at least the risk of losing is lower. If the boom does come, it will most likely be driven by public-private partnerships, where private industry supplements the government's funds and provides a higher rate of return for bond investors.