Five infrastructure funds that trump the Australian dream
For the investor who believes in the Australian dream of home ownership, Money Management, using FE Analytics, found five infrastructure funds that could cost less and reap more.
In fact, data actually shows over 30 infrastructure equity funds that have outperformed the Australian Bureau of Statistics’ Residential Property Eight Cities index over the three years to last month’s end, which returned 4.44 per cent.
When the index is compared to the infrastructure sector as a whole, it sits in the bottom quartile for all periods across the ten, five, three and one-year periods to last month’s end.
Out of 37 funds in the sector, the index is placed 32nd for the three years to last month’s end, 13 places behind the sector’s average of 8.73 per cent.
Macquarie’s Global Infrastructure Trust II was the top-performing fund across the three years to 31 August 2018, returning 25.38 per cent, followed by AMP’s Australia Pacific Airports with 21.03 per cent and Lazard’s Global Listed Infrastructure fund, with 13.62 per cent.
Mercer’s Global Unlisted Infrastructure fund returned 13.55 per cent and AMP Capital’s Investors Lane Cove Tunnel Trust returned 13.50 per cent, which shows the top five infrastructure fund trebled if not quadrupled the returns of the Eight Cities index.
In taking the Lazard Global Listed Infrastructure fund, which has a minimum investment amount of $20,000, an investment of $500,000 three years ago would have returned $243,057.26, making the total amount $743,057.26.
Had an investor purchased a house for the same amount, they would have returned around $69,650 as per the ABS Residential Property Eight Cities index, which would have amounted to $569,650.
For an investor to achieve those results, not even half that investment amount would be required. In fact, to return over $70,000, an investor would have had to invest $145,000 in the fund, which is just under a third of what’s required to get the same results from a house.
The chart below shows the performance of the top five funds as compared to the ABS Eight Cities Index and the Infrastructure equities sector for the three years to 31 August 2018.
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