The global listed infrastructure sector was stronger over July with the reference benchmark index (FTSE Global Core Infrastructure 50/50 Index Net Tax USD) returning 0.55% over the month.
Global equities edged higher as measured by MSCI World, returning +0.46% in USD terms.
US 10 year bond yields increased to 4.75% over the month, reflecting lingering inflation concerns and less forward guidance by the Fed creating uncertainty.
Portfolio commentary
The Portfolio currently holds 31 global infrastructure stocks and returned 0.0% for July which was behind the benchmark. Year to date the Portfolio is up 9.13%, which is behind the reference benchmark which has returned 11.27%.
Excluding currency impacts, the listed infrastructure stocks were broadly flat over the month. Within the Portfolio, global tank-farm storage company Vopak (+7%) reported Q2 results and increased earnings guidance for the full-year. This was despite the interruption to global oil and chemicals markets from the ongoing conflict in the Middle East. Cell tower company Cellnex (+4%) also reported a strong Q2 result, with confirmation of 2026 and 2027 earnings guidance. There was also a continuation in shareholder returns with another €200m buyback announced.
We saw some weakness in toll-road company Ferrovial (-5%) despite a good Q2 result that included market beating toll increases on their US managed lanes. US utilities were also weaker as US interest rates increased.
Outlook
Despite ongoing geopolitical volatility, the listed infrastructure sector remains defensive and well positioned to keep building assets and earnings for investors. Earnings results for the first half of the year have been mostly positive so far.
Large amounts of capital continue to be invested by infrastructure companies to facilitate mega themes of our time including decarbonisation, digitalisation, water quality and transportation.
