A monthly review and outlook of the Global Listed Infrastructure sector.
Market review - as at October 2025
Global Listed Infrastructure dipped in October, following strong ytd gains. The FTSE Global Core Infrastructure 50/50 index returned -0.7%, while the MSCI World index^ ended the month +2.0% higher.
The best performing infrastructure sector was Other (+6%), which consists of lower quality assets like ports, satellites and merchant power. Gains in this segment were led by satellites and Emerging Markets port stocks. Toll Roads (+4%) also delivered solid returns, supported by robust earnings numbers and healthy traffic volumes. The worst performing infrastructure sector was Energy Midstream (-8%), which fell on concerns about the sector’s growth outlook. Energy prices have been falling on weak demand, robust supply and easing geopolitical tensions.
The best performing infrastructure region was the UK (+6%), where electric and water utility stocks benefitted from lower bond yields. The worst performing infrastructure region was Canada (-3%), reflecting weakness in its large-cap energy midstream stocks.
^ MSCI World Net Total Return Index (USD) is provided for information purposes only. Index returns are net of tax. Data to 30 September 2025. Source: Bloomberg, First Sentier Investors / Lipper IM. All stock and sector performance data expressed in local currency terms.
Market outlook and Strategy
The Portfolio invests in a range of listed infrastructure assets including toll roads, airports, railroads, utilities and renewables, energy midstream, wireless towers and data centers. These sectors share common characteristics, like barriers to entry and pricing power, which can provide investors with inflation-protected income and strong capital growth over the medium-term.
The asset class remains supported by several structural growth drivers. Electric utilities, particularly in the US, face higher capital expenditure needs to meet the substantial increases in electricity demand being driven by Artificial Intelligence (AI), data centres, onshoring of manufacturing and broader electrification trends. As well as additional power plants, utilities also need to expand, modernise and strengthen electricity transmission and distribution grids. Under US utility regulation, higher amounts of capex spent in this way typically leads to rate base growth, which ultimately supports higher earnings growth.
Digitalisation is another key theme for the asset class. Data centers benefit from companies seeking the improved reliability and flexibility offered by migrating IT equipment from on-premises to a combination of colocation services and cloud computing. Additionally, the surge of interest in AI is driving data center demand, as well as boosting the need for electricity.
We expect structural growth in demand for mobile data, underpinned by increasing reliance on digital connectivity, to support steady revenue growth in the mobile tower sector. While recent consolidation activity within the US, Spanish, French and Italian telecom sectors (mobile towers’ primary customer base) has raised concerns about customer churn rates, longer-term growth drivers remain. The adoption of 5G technology over coming years will require networks to handle increased data speed, lower latency, and a much higher number of connected devices.
Continued M&A activity and the potential divestment of non-core assets represent additional sources of support for valuation multiples across the asset class. Recent months have seen brisk corporate activity levels, driven by industry consolidation and the acquisition of public market assets by private market operators. We expect this to continue, aided by a pro-business US administration, strong demand for infrastructure assets and rising financing needs for global listed infrastructure investment programs.
Source : Company data, First Sentier Investors, as of 31 October 2025.
Global Listed Infrastructure
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Investing in global listed infrastructure can offer inflation-protected income and steady capital growth from real assets delivering essential services. We search for best-in-class assets worldwide with high barriers to entry, structural growth and pricing power.
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