5 reasons to invest in infrastructure

3 min read 16 Mar 22

Please refer to the glossary for explanations of the investment terms used throughout this website.

Listed infrastructure is benefiting from long-term structural trends such as renewable energy, digital connectivity and demographics - powerful themes that we believe will last for decades. We are more optimistic than ever about the long-term growth opportunities for listed infrastructure.

Please note, while we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.

The foundation of the economy

Showering in the morning, taking the metro to work, reading email, watching a TV show... None of these activities is possible without infrastructure. From water pipes to sewage treatment plants, from antennas to power lines, from fibre optic networks to data centres, infrastructure is everywhere. And very often these assets are hidden behind the increasingly innovative and 'green' services that make our economy work.

Protection against inflation

Inflation-linked income is a key feature of infrastructure that allows the asset class to offer a degree of protection against inflation. We welcome a world of economic growth with controlled inflation that provides many listed infrastructure companies, whether directly or indirectly, with a vital source of growth.

A theme driven by ambitious stimulus packages

The US infrastructure bill is a powerful driver for companies that own and operate physical infrastructure assets that enable the transition to a lower carbon future. 1.2 trillion, with $550 billion  in new federal spending on repairs and upgrades , to investment in public transportation, clean energy, and digital connectivity, we believe it represents an opportunity for these companies for decades to come. 

A response to major climate challenges

Beyond these economic benefits, investing in infrastructure can contribute to sustainable environmental and social goals. The energy transition is an eloquent example. The switch to renewable and low-carbon energy requires new infrastructure. In addition, when composing our portfolios, we look for companies that score well on certain sustainability criteria, such as CO2 emissions, and we only invest in forward-looking players that support the energy transition. 

The SDGs in infrastructure investments

As infrastructure is closely linked to our daily lives, we focus on the UN’s Sustainable Development Goals (SDGs) as part of our investment philosophy. We can mention Clean and Affordable Energy (SDG 7), where we invest in companies that provide infrastructure solutions around renewable energy. We can also mention the goal of Decent Employment and Economic Growth (SDG 8) for which we invest in companies that promote job creation, facilitate and accelerate economic growth.

The fund aims to provide a combination of capital growth and income to deliver a higher return than the global equities market over any five-year period; and an income distribution that increases every year in US dollar terms. The fund seeks to achieve its financial objectives while applying ESG Criteria and Sustainability Criteria. At least 80% of the fund is invested in the shares of infrastructure companies and investment trusts of any size and from anywhere in the world, including emerging markets. The fund usually holds shares in fewer than 50 companies. The fund invests in securities that meet the ESG Criteria and Sustainability Criteria. Norms-, sector- and/or values-based exclusions apply to investments.

The fund is actively managed and in benchmark is the MSCI ACWI Net Return Index.

Please note, investing in this fund means acquiring units or shares in a fund, and not in a given underlying asset such as building or shares of a company, as these are only the underlying assets owned by the fund.   

The views expressed in this document should not be taken as a recommendation, advice or forecast.

The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.

Source: https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/28/fact-sheet-historic-bipartisan-infrastructure-deal/

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