Six infrastructure funds have been awarded a recommended rating as part of Zenith Investment Partners’ 2011 Infrastructure Sector Review.
The RARE Infrastructure Value Fund is a new addition to the list and one of two funds to have been awarded a highly recommended rating – the other was the unhedged version of the RARE’s infrastructure fund.
Out of the 11 listed infrastructure funds assessed by Zenith in July and August, CFS Wholesale Global Listed Infrastructure Securities, Magellan Infrastructure Fund, Macquarie International Infrastructure Securities Fund and RARE Series Emerging Markets Fund were rated recommended. Along with the two other recommended funds, these funds are candidates for client model portfolios, Zenith stated.
Meanwhile, the Cohen & Steers Global Listed Infrastructure Fund was removed from Zenith’s list due to the fund’s limited availability on platforms and its poor performance. Two other funds did not make it past Zenith’s initial quantitative filter, while Lazard Global Listed Infrastructure Fund and Macquarie Emerging Market Infrastructure Securities Fund declined Zenith’s invitation to participate.
Zenith’s review was based on fund organisation, the investment team, investment process, portfolio management, portfolio construction, risk management and product structure.
Zenith senior investment analyst Bronwen Moncrieff said RARE’s hedged and unhedged funds were added to the highly recommended list because they outperformed across all of these categories.
Moncrieff also said the key themes dominating Zenith’s review was the macroeconomic environment and how the sovereign debit crisis is potentially going to be solved.
"An additional theme with long-term positive implications for the infrastructure sector is the continued global demand for infrastructure assets, particularly in emerging markets," Moncrieff said.
Moncrieff went on to say that growth rates in emerging markets were, on average, expected to be higher than that of the developed world. Over the medium to long-term, the inclusion of listed infrastructure in an investor’s international equities exposure will provide significant diversification benefits, she said.
