Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA Infrastructure sector.   We last visited the Investment Association Infrastructure sector exactly a year ago. I fully admit it’s too niche for most retail investors, but before you tut over your morning kipper and turn the page, please read on, as major performance drivers for this sector—specifically, inflation and base rates—have wider (and hopefully instructive) lessons for investors. As a further incentive, if you are invested in a managed portfolio service or multi-asset fund, you may have exposure to such assets without realising it. Infrastructure sector

Despite a lacklustre couple of years, there seems to be a buzz around listed infrastructure funds. Infrastructure has become more accessible over time. Not long before the global financial crisis, I was working in wealth management research; then, we were looking at how our clients could invest in the asset class. Given that it was largely unlisted, accessed through large, illiquid institutional funds, the answer was “with great difficulty”. If memory serves, we heaved a collective sigh and moved on. The rise of listed infra funds have changed this and been rewarded by a significant inflow of cash. Between 2004

Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA Infrastructure sector.   Funds in the infrastructure sector invest at least 80% of their assets in companies involved in the ownership, operation, or maintenance of infrastructure assets. These span the utilities, energy, transport, health, education, security, and communications industrial sectors—covering everything from hospitals to hydro-electric. While some infrastructure funds are direct owners of such businesses—owning outright, for instance, wind farms—these funds have their exposure largely through investing in the shares of such businesses, or themselves investing in specialist infrastructure funds. That has the advantage of greater

Our culture runs on coffee and gasoline, the first often tasting like the second. Edward Abbey   If I had a pound for every time that I’ve been asked about infrastructure investment this year…well, just maybe I could afford a latte from the overpriced “artisanal” coffee shop down the road. While I’m unsure as to what the role of rustic artisans is in coffee production, fearing it may be similar to that of the civet, there are two connections between that latte and infrastructure: inflation and climate change.   Chart 1: Global Equity Theme Infrastructure AUM (£bn) Source: Refinitiv Lipper 

Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA Infrastructure sector.   Infrastructure is a relatively new Investment Association sector, launched in September. It has 20 members, although only nine of these have five-year histories. Hence the table this month is slightly truncated. Nevertheless, I thought it worth a look, if only for one reason—inflation. With UK inflation trending sharply upwards—soaring through expectations to hit 5.1% in November—assets that offer inflation protection look increasingly attractive. However, investing in infrastructure—often viewed as a bond proxy—seems intuitively wrong, as bonds underperform when rates rise. Listed infrastructure is