Infrastructure funds feel hit of travel restrictions

Dan Cave Zenith Zenith Investment partners infrastructure global listed infrastructure coronavirus covid-19

15 April 2020
| By Laura Dew |
image
image
expand image

The restrictions on travel have dented the performance of global listed infrastructure (GLI) funds, according to Zenith Investment Partners, but greater downside protection means they have managed to outperform global equities over 12 months.

In its latest Infrastructure sector report, the firm said GLI funds had reported higher returns over the last 12 months to 31 March, 2020 than global equities. 

The median manager across the firm’s rated GLI funds lost 9.2% after fees over the last 12 months, compared to losses of 11.1% for global equities.

This was due to a combination of factors including less reliance on short-term business movements, competition, economic conditions and commodity prices than broader industrial equities.

Dan Cave, senior investment analyst at Zenith, said the declines the sector saw were a result of their exposure to the airline and travel sectors but were countered by outperformance from utilities.

“A large contributor to GLI’s negative returns has been the transport-related segments of the infrastructure market (airports and toll roads) which have been some of the hardest hit due to large falls in patronage levels.

“In contrast, regulated utilities have outperformed global equities as their regulated earnings are more resilient due to their essential role in society, especially in a COVID-19 shutdown.”

He said GLI should play a role in an investor’s portfolio as it offered a stable earnings profile and diversification benefits due to its defensive characteristics. 

Read more about:

AUTHOR

Recommended for you

 
sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

 

MARKET INSIGHTS

Peter Swan

In many cases, if not most, it is nearly impossible to verify an individual's entire experience as stated in their decla...

23 hours 1 minute ago
JOHN GILLIES

SO NOW YOU ARE NOT ONLY A FUND MANAGER BUT A MIND READER AS WELL ? (Where it should have considered the orders were man...

1 day 1 hour ago
Nathan Baker

That's great. If any loss had occurred and clients eventually sue, that will probably occur after the PI has lapsed. Adv...

1 day 2 hours ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

2 weeks 1 day ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

1 week 1 day ago

The corporate regulator has made a suspension and a cancellation of the AFSL of two Queensland-based firms. ...

1 week 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND