A monthly review and outlook of the Global Listed Infrastructure sector.
Market review - as at September 2025
Global Listed Infrastructure rose in September as financial markets were buoyed by monetary policy support and resilient corporate earnings. The FTSE Global Core Infrastructure 50/50 index returned +2.0% in September, while the MSCI World index^ ended the month +3.2% higher.
The best performing infrastructure sector was Railroads (+4%) as freight volumes remained solid and the probability of merger activity increased. The worst performing infrastructure sector was Towers (-4%). US tower stocks declined due to a diminishing growth outlook as EchoStar (not in our Focus List) continued to offload spectrum, thereby removing a potential fourth network customer for US tower companies.
The best performing infrastructure region was Canada (+4%) due to strength in Energy Midstream companies supported by growth in (gas-fired) power demand and lower Canadian interest rates and currency. The worst performing infrastructure region was Australia (-3%) owing to weakness in toll road 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.
Toll roads remain the portfolio’s largest sector overweight. Their domestically focused business models give them limited direct sensitivity to tariffs or trade restrictions. Revenues are typically robust, supported by consistently high operating margins. Pricing is often linked to inflation, with negotiated compensation for additional capital expenditure. Over the medium term, additional road capacity will be needed to ease urban congestion in the developed world and to support economic development in the developing world. In the absence of sufficient government funding, toll road operators are well-positioned to meet this need.
The portfolio is also overweight railroads, via holdings in US freight rail operators and European and Japanese passenger rail stocks. North American freight rail companies represent a key component of the continent’s transportation system and are a core part of the global listed infrastructure opportunity set. Recent M&A activity in this space is expected to support earnings growth by providing scope for reliability improvements, faster transit times and cost efficiencies.
Utilities / renewables make up a substantial part of the portfolio. These stocks are set to benefit from unprecedented growth in demand for electricity, being driven by the needs of Artificial Intelligence (AI) AI and data centers, as well as industrial onshoring and a broad-based move towards electrification. Earnings growth rates for US utilities have already begun to accelerate due to the required investment to support greater demand for power. In the event of an economic downturn, utility earnings are likely to prove relatively resilient, owing to their regulated earnings frameworks and essential service nature.
The portfolio is underweight energy midstream. Within this space, the portfolio has overweight exposure to faster-growing US energy midstream stocks but is substantially underweight Canadian companies, which tend to have higher leverage and slower growth. Rising demand for electricity in the US, as well as being positive for utilities, is also likely to support demand for natural gas as a feedstock for gas-fired power plants, creating additional growth opportunities for US-based energy midstream companies.
Source : Company data, First Sentier Investors, as of 30 September 2025.
Global Listed Infrastructure
Infrastructure powers the world we live in – and when it comes to on-the-ground research, our team can be found on site
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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