Is listed infrastructure insulated from the end of a market cycle, and if so, to what degree? RARE’s co-chief investment officer, Nick Langley, explains the market drivers for these stocks.
Airports, electrical plants, gas pipelines, rail and roads provide essential services. The relatively predictable nature of the demand for such assets means the market price of the companies that manage them can act differently to other equities.
With the rise of air travel, airports have become essential to the functioning of societies. RARE Infrastructure makes the case for investing in companies that own airports.
The listed infrastructure sector is notable for providing income and low long-term volatility. However, it’s important to recognise that not every stock in this sector contributes equally to that goal.
Timing a rotation into defensive sectors in 2019 will be critical as the longest-ever bull market draws to a close. Listed infrastructure is one such haven for investors.
Chart of the Week
Chart courtesy of ClearBridge Investments. Source: Bloomberg, as of 5/31/19. Returns are cumulative and based on price movement only, and do not include the reinvestment of dividends. +101% for S&P 500 measures 10/09/02-10/12/2007 and +218% for MSCI ACWI ex-U.S. measures 3/12/03-10/31/07. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Chart of the Week
China’s latest tariffs focus on U.S. agricultural exports; financial markets are pricing in at least one Fed rate cut this year; U.S. consumers’ debt load reached $13.67 trillion, with student debt outstripping auto loans.
As air freight and passenger volumes grow, new investment in airport infrastructure assets represents a fresh source of opportunity.
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