Infrastructure Trusts for Income Investors

Infrastructure trusts are trading on a premium as politicians in both the UK and US pledged to spend in the sector, but the income level remains attractive

Canaccord Genuity 14 December, 2016 | 12:12AM

This article is part of Morningstar's Guide to Alternative Investing. Here, as part of the Perspectives series, Alan Brierley of Cannacord Genuity outlines the ongoing appeal of infrastructure trusts.

Compelling income characteristics; attractive, sustainable, cash-covered and progressive dividends backed by long-term and highly predictable cash-flows, superior risk-adjusted returns with low correlations and lower volatility, and capital preservation qualities have established listed infrastructure as a cornerstone for many investors.

However, more recently, bond markets have reacted negatively to Brexit, the US presidential election, expectations of higher government borrowings to fund fiscal stimulus programs and the potential re-emergence of inflation. Notably, a sharp sell-off in bonds has spilled over into some of the infrastructure funds.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
HICL Infrastructure Company Ord165.00 GBX0.00
Renewables Infrastructure Grp132.20 GBX-1.34

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Canaccord Genuity  Canaccord Genuity Wealth Management meets investors' individual needs by searching the globe for investment opportunities

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