The funds backing a global infrastructure boom
Every infrastructure fund with a three-year track record has seen double-digit gains over the period with the best one returning more than 40%.
In the US, the Bipartisan Infrastructure Deal was passed this month, described as a once-in-a-generation investment in the US infrastructure, and would include US$550 billion ($749.1 billion) in federal investments in America’s infrastructure.
This followed a number of other initiatives worldwide signalling increased infrastructure spend earlier to accelerate the recovery from COVID-19.
These included Europe’s Next Generation recovery fund, Australia’s series of spends, while China had already in place the Belt and Road Initiative which was one of the world’s largest infrastructure program.
Over three years to 31 July, 2021, the best-performing infrastructure fund within the Australian Core Strategies universe was ClearBridge RARE Infrastructure Income A fund which returned 41.8%.
According to its latest factsheet, the fund’s top holding was Sydney Airport, which was recently subject to a takeover bid and had risen 37% in the last six months as a result.
It aimed to provide inflation-linked, long-term income with a focus on minimising volatility and a net distribution yield of 5% per annum.
This was followed by BlackRock Global Listed Infrastructure which returned 37.1% and Mercer Global Unlisted Infrastructure which returned 35.2%.
All 42 funds with three-year performance data had seen double-digit returns with the smallest gains over the period seen by 4D Emerging Markets Infrastructure of 11.6%. The wider infrastructure sector had returned 19% over the period.
Looking at short-term performance over one year to 31 July, 2021, Alpha Infrastructure, Russell Global Listed Infrastructure and AMP Capital Specialist Property and Infrastructure all returned 22% while the lowest performance was by AMP Capital Core Infrastructure which had returned 5.6%.
The sector returned 13.9% over one year.
AUTHOR
Laura Dew
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