Investors in international infrastructure funds need to adopt a long-term view because of the risks associated with short-term market fluctuations, according to the latest sector review undertaken by ratings house Zenith Investment Partners.
The review, released today, saw only one fund — the RARE Infrastructure Value Fund — emerge with the company’s coveted ‘highly recommended’ rating.
However, five other funds — CFS WS Global Listed Infrastructure Securities fund, Magellan Infrastructure Fund, Macquarie International Infrastructure Securities Fund, C&S Global Listed Infrastructure Fund and RARE Series Emerging Markets Fund — each received a ‘recommended’ rating.
Commenting on the sector, Zenith Investments analyst Andrew Cassar said listed international infrastructure had generated a consistent level that had surpassed the MSCI Global Equities index on a hedge basis.
However he noted that during the global financial crisis investors had realised that infrastructure securities were not immune to short-term share price volatility.
“Fortunately, the relatively predictable cash flows and high dividend yield should provide a relatively stable return over the long term,” Cassar said.
