Steam train returns ahead
[[{"fid":"28315","view_mode":"default","fields":{"format":"default"},"type":"media","attributes":{"alt":"Steam train returns with less volatilty","class":"media-element file-default"}}]]
Infrastructure is a compelling investment across all market cycles, as it offers investors steady returns and low volatility, according AMP Capital.
AMP Capital core infrastructure, fund manager, John Julian, said infrastructure assets were known as essential services assets, which people relied upon, on a day-to-day basis. That was why, infrastructure was less influenced by economic factors when compared to other assets.
Infrastructure assets were steady, stable, and offered consistent levels of income yields, as revenue was often underpinned by regulatory frameworks or by long-term contracts, he said.
For example AMP Capital's core infrastructure fund invested in a group of six schools in and around an Australian capital city.
"In return for making those schools available for use, the state government pays us [AMP Capital] a fixed amount every quarter, [and will continue to do so] for the next 23 years".
Based on our analysis of the 43 infrastructure funds on Financial Express, AMP's Core Capital fund was the least volatile infrastructure fund available in Australia (see below table).
Least volatile Infrastructure funds, based on Financial Express.
[[{"fid":"28316","view_mode":"default","fields":{"format":"default","field_file_image_alt_text[und][0][value]":"Least volatile ","field_file_image_title_text[und][0][value]":"Least volatile "},"type":"media","attributes":{"alt":"Least volatile ","title":"Least volatile ","class":"media-element file-default"}}]]
But, when it came to performance, it was the sixth best performer and generated 16.10 per cent year to date. Meanwhile, Omega's Global infrastructure fund won first place with 19.27 per cent.
Infrastructure top 10 performers over one year, based on Financial Express.
[[{"fid":"28317","view_mode":"default","fields":{"format":"default","field_file_image_alt_text[und][0][value]":"Top 10 funds ","field_file_image_title_text[und][0][value]":"Top 10 funds "},"type":"media","attributes":{"alt":"Top 10 funds ","title":"Top 10 funds ","class":"media-element file-default"}}]]
Julian said their stand-out performing investment was in Melbourne airport, an unlisted asset which had been experiencing "extremely strong levels of passenger growth, both domestically and internationally".
He was pleased that Melbourne airport's international passenger numbers were increasingly strong, and he expected that robust trend to continue.
"That's fantastic, as far as we're concerned as international passengers generally generate around three times the revenue of a domestic passenger," Julian said.
AMP Capital's core infrastructure fund was also only one of four infrastructure funds in Australia, that received Financial Express' highest rating, of five crowns (see below table for other crowned funds).
Notwithstanding that, AMP Capital said it invested 50 per cent in listed assets and the remainder in unlisted assets.
Recommended for you
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
