Infrastructure builds strong decade
The infrastructure sector outperformed the global and Australian equities sector over the last decade, according to data from FE Analytics.
The sector returned 207.44% over the 10 years to 31 December, 2019, beating global equities (172.45%) and Australian equities (97.49%) sectors.
The best performing infastructure funds were Lazard Global Listed Infrastructure (314.53%), Magellan Infrastructure (257.22%), CFS Colonial First State Wholesale Global Listed Infrastructure Securities (232.45%), CFS FirstChoice Wholesale Global Infrastructure Securities (215.57%), Russell
Global Listed Infrastructure $A Hedged A (205.27%).
The sector volatility was 7.82, but Lazard (11.16), Russell (10.92), CFS Listed Infrastructure (10.86), CFS FirstChoice (10.2) and Magellan (9.64) all had higher than the sector average.
For risk adjusted returns, the sector had a Sharpe ratio of 1.06, with Lazard at 1.04, Magellan (1.03), Both CFS funds (0.84), and Russell (0.74).
AMP Capital Core Infrastructure A had the best Sharpe ratio during the decade (1.07) and was the least volatile (6.39), returning 169.54%.
According to Lazard’s fund commentary, its strategy enjoyed strong performance since 2009, exceeding its annual investment return objective in eight out of the past 10 years, but matching that this decade might not be achieveable.
“We have been informing investors for some time that we do not expect this level of performance to continue,” it said.
“Overall, we remain cautious about equity markets. In recent months, we have seen significant volatility in stock price movements giving us cause for concern.
“Whilst we see some pockets of attractive value opportunities particularly in Europe, the majority of global listed infrastructure stocks are US-listed utilities, which we believe as a cohort remain unattractive.
However, it still expected to meet performance objectives and show better results compared to passive investment in infrastructure indices, bonds and the broader equity markets.
Best performing infrastructure funds v sector over the 10 years to 31 December 2019
AUTHOR
Chris Dastoor
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
