3 min read 16 Mar 22
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.
Showering in the morning, taking the metro to work, reading email, streaming a TV show... None of these activities is possible without infrastructure. From water pipes to sewage treatment plants, from 5G antennas to power lines, from fibre optic networks to data centres, physical infrastructure assets are everywhere. And very often these unseen? assets support the increasingly innovative and 'green' services that make our economy work.
As infrastructure plays such as vital role in society, we believe many of the critical infrastructure assets in which we invest (via listed securities) can support a number of the UN’s Sustainable Development Goals (SDGs). For instance, companies that provide infrastructure solutions around renewable energy can contribute to the promotion of Affordable and Clean Energy (SDG 7). Where the provision of infrastructure and services promotes job creation, facilitate and accelerate economic growth it can help meet the goal of Decent Employment and Economic Growth (SDG 8).
Inflation-linked income is a key feature of infrastructure that allows the asset class to offer a degree of protection against inflation. By focusing on infrastructure companies that increase their dividend payments over time, we seek to provide investors with a growing income, which we believe can help shield them from the rising cost of living.
Massive infrastructure investment packages in the US and Europe are a powerful driver for infrastructure companies that own and operate physical infrastructure assets, particularly those that enable the transition to a lower carbon future. In the US, President Biden’s Infrastructure Investment and Jobs Act is an ambitious plan to improve the country’s infrastructure, with billions of dollars dedicated to investment in public transportation, clean energy, and digital connectivity. With the European Union also focused on creating a greener, more digital future, we believe these policies represent an opportunity for infrastructure companies for decades to come.
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 proactive companies that support the energy transition.
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.