Listed Infrastructure

Global Listed Infrastructure

 

Infrastructure describes the physical assets that provide essential services to society. From airports we travel through, toll roads we drive on and the water we drink – infrastructure assets are the backbone of any economy. The main infrastructure sectors are: toll roads, airports, ports, rail, energy infrastructure, communications infrastructure and utilities (electricity, gas and water).
GLIS Banner 2012 

Why invest in infrastructure? 

Infrastructure is considered to be a unique investment class, appealing to a broad range of investors, due to a number of attractive characteristics which can contribute to their stable income and growth: 

– High entry barriers: In most cases, infrastructure assets are government legislated or natural monopoly providers of essential services.
– Pricing power: Infrastructure assets tend to have inelastic demand as they provide essential services that tend to be resistant to economic downturns.
– Predictable cash flows: Infrastructure assets have an ability to generate cash flows that are highly predictable.
– Sustainable growth: Infrastructure assets generally have a growth profile supported by long term economic and demographic trends. They tend to be relatively immune to economic cycles and exhibit defensive qualities in falling markets.

 

Benefits of investing in global listed infrastructure 

There are many benefits from investing in a portfolio of global listed infrastructure companies including:
– Structural growth which is less dependent on the economic cycle
– Attractive risk-adjusted returns; stable cash flows from assets providing essential services
– Inflation protected income; attractive yield with an inflation hedge
– Diversification and low correlation with other asset classes
– Liquid and transparent; freedom to move in and out of positions; listed funds provide daily pricing; and listed companies are typically more highly scrutinised by regulators, governments, unions and the media.

There are many benefits from investing in a portfolio of global listed infrastructure companies including:– Structural growth which is less dependent on the economic cycle – Attractive risk-adjusted returns; stable cash flows from assets providing essential services – Inflation protected income; attractive yield with an inflation hedge – Diversification and low correlation with other asset classes– Liquid and transparent; freedom to move in and out of positions; listed funds provide daily pricing; and listed companies are typically more highly scrutinised by regulators, governments, unions and the media.
 

General Risks

The value of investments and any income from them may go down as well as up. Investors may get back less than the original amount invested. Where shown, past performance information is not a guide to future performance. If you are in any doubt as to the suitability of any of our funds for your investment needs, please seek independent financial advice.  

The following specific risks apply to the First State Global Listed Infrastructure Fund

Currency risk: The fund invests in assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment.

Single Sector: The fund invests in a single sector, which offers the possibility of higher returns, but may involve a higher degree of risk compared to investments which spread investment risk through a variety of sectors.  Share price movements may have a greater effect on the overall value of these funds.

Concentration: The fund typically invests in a concentrated portfolio of investments and should a particular investment decline in value, this will have a pronounced effect on the overall value of the fund.

Infrastructure Risk: Companies in the infrastructure sector (utilities, transportation and energy industries) are subject to a variety of factors which may adversely affect their business or operations.  Adverse developments within these industries may affect the value of the underlying securities of the Fund. Companies involved in these industries are subject to environmental considerations, taxes, government regulation, price and supply considerations and competition.

Charges against capital: Fees and expenses are charged against the capital of the Fund. Deducting expenses from capital reduces the potential for capital growth and on any redemption Shareholders may not receive back the full amount invested.