Global listed infrastructure, which saw the aggregate funds under management (FUM) growth of 28.6 per cent over the 12 months to 30 April, has continued to gain traction in client portfolios thanks to its defensive characteristics, stability of returns and the low interest rate environment, according to Zenith Investment Partners’ sector review.
According to the study ‘Zenith Infrastructure Sector Review 2017’, the reduction in interest rates had a direct impact with regards to the valuation techniques used for infrastructure assets, however the asset class might face some challenges.
Zenith’s senior investment analyst, Justin Tay, said: “Taking the prospect of tightening monetary policy into account, Zenith believes the tailwind that infrastructure securities enjoyed could soon become a headwind.
Also, according to Zenith’s review, not all infrastructure exposures were equal with regards to the ability to exhibit a defensive risk/return profile when needed.
“Going forward, given the potential for heightened macroeconomic impacts, Zenith believes that it is imperative that investors consider the case for active management within global listed infrastructure,” Tay said.
Across the infrastructure sector review, Zenith rated four products as “highly recommended”, 10 products were “recommended” and three received “approved” ratings.
