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.
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.
Rising bond yields can have a different impact on the fundamental valuation and market price of regulated utilities and user-pay infrastructure. An in-depth understanding of these impacts enables an active, benchmark-unaware manager to better navigate through the economic cycles.
Listed infrastructure opportunities
The Chinese Government’s ‘One Belt, One Road’ initiative is a foreign trade policy and economic strategy to develop the historic Silk Road trade route from China to Europe. RARE assesses the opportunities for investors in global listed infrastructure.
Chart of the Week
Chart courtesy of ClearBridge Investments. Source: ClearBridge, Bloomberg as of 4/4/2019. 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
Friday saw a solid U.S. jobs report, with only a couple of wrinkles; Germany's manufacturing sector had a distressing February; Greece's debt crisis generated an ironic payday; Brexit hit yet another pothole.
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.
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.
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