Wed 11 Mar. 2020
Infrastructure investing for inflation linked income.
We received an interesting talk from Jim at Premier Miton on investing in infrastructure via listed funds.
Jim began his presentation by explaining the different methods of investing in infrastructure and the benefits of doing so via listed OEICs. He then went on to explain the vast examples of infrastructure that these funds are able to access.
Jim explained the different characteristics of infrastructure as an asset class including its largely monopolistic / oligopolistic market structure, the regulated nature of these markets and their reliance on long-term contracts with inflation linkage as well as inelastic demand. These characteristics also mean predictable, inflation linked, long-term returns.
Jim also explained that investing in infrastructure could provide opportunities for dividend growth e.g. investing in infrastructure companies including wind and solar power generators or 5G providers. It highlighted that there are opportunities to invest in new and greener technology also.
Jim concluded the talk by reiterating that investing in infrastructure can benefit investors by providing reliable dividend income as well as dividend growth, liquidity and diversification away from ‘global equity’.