There aren’t many specialist infrastructure funds around. But of the few there are, “my favourite is First State Global Listed Infrastructure Fund“, Ben Yearsley of Hargreaves Lansdown tells The Independent. The £90m fund is run by Peter Meany, an economics graduate from Australia’s Macquarie University.
The fund, which was launched in October 2007, focuses on the developed world, with more than 90% of its assets invested in Europe, the US and Japan. The aim is to invest in large-scale capital projects. With a focus on firms that provide essential services, such as ports, toll roads, utilities, electricity and water, the stimulus measures being taken by governments make the fund “a solid defensive play”, says Andy Parson at the Share Centre in Investors Chronicle.
Global infrastructure companies have been “resilient” in the face of a slowing global economy, Meany tells The Australian. Forecasts for the sector have been downgraded by 5%, against 30% for the broader market. “This generally reflects the essential demand for services like electricity, water and commuter travel; the ability of monopoly assets to increase prices; and good cost control.”
Around 19% of the portfolio is invested in toll road operators, such as Vinci and Atlantia. Meany’s main focus is firms with solid balance sheets and forward order books. It’s a pretty cautious stance, but Meany likes it that way. “Keeping it simple is one of Mr Meany’s key criteria at present: companies with complex balance sheets that are difficult to understand should probably be avoided”, says Yearsley. The fund currently yields 4.29%.
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First State Global Listed Infrastructure top ten holdings
| Name of holding | % of assets |
|---|---|
| Vinci | 7.2 |
| American Tower Corp | 6.3 |
| Abertis Infraestructuras | 5.2 |
| Koninklijke Vopak | 4.6 |
| SES Global | 4.6 |
| Central Japan Railway Co | 4.6 |
| E.ON AG | 4.2 |
| GDF Suez | 3.6 |
| Atlantia Spa | 3.3 |
| Crown Castle International Corp | 3.0 |