How is listed infrastructure coping in an environment of rising inflation and volatility?
8 min read12 May 22
By M&G Investments
Inflation forecasts have increased dramatically during the past year, and investors’ expectations are shifting from thinking that inflation would be transitory to believing that it will become entrenched
With interest rates on the rise, infrastructure, which has traditionally been seen as a “bond proxy” type of asset with cashflows highly sensitive to movements in interest rates, may not be the first port of call for investors
However, we believe listed infrastructure merits a closer look not only because many of the companies within the asset class have cashflows that are linked to inflation, but also due to its role in the transition to a world of net-zero carbon emissions and as a potential beneficiary of other long-term structural trends, such as digital connectivity and demographics.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.