Listed infrastructure equities have recorded progress in October against a backdrop of positive equity markets, in what RARE Infrastructure describes as a late-cycle environment.
RARE senior portfolio manager, Shane Hurst, said that investing in global listed infrastructure would allow investors to navigate market volatility while remaining invested in equities and infrastructure companies, when selected appropriately, could provide visibility over revenues and dividends driven by stable earnings of the underlying assets, regulation and long-term contracts.
“Although the yield curve in the US has moved away from an inversion path in recent weeks, we continue to believe that defensive strategies are a prudent course for investors and that listed infrastructure presents opportunities for investors looking to preserve and grow capital at the same time as looking for downside protection,” he added.
“However, while there is plenty to worry about, global equities are still an engaging proposition as it is unlikely that the US economy, with record low unemployment, will dip into recession any time soon.”
According to RARE, retreating to cash or bonds would run the risk of missing out on potentially meaningful returns over the next year.
“A maturing business cycle means that quality assets that deliver growing earnings will be sought after and attract more capital as investors become more defensively positioned,” Hurst said.
For both the RARE Infrastructure Income portfolio and the RARE Infrastructure Value portfolio Western Europe was a top performer in terms of regions in October, the firm said.
RARE Infrastructure Income v sector performance from fund inception
