A monthly review and outlook of the Global Listed Infrastructure sector.
Market review - as at February 2026
Global Listed Infrastructure rallied strongly during February, buoyed by investor demand for assets deemed less vulnerable to disruption by AI. The FTSE Global Core Infrastructure 50/50 index returned +8.4%, while the MSCI World index^ ended the month +0.7% higher.
The best performing infrastructure sector was Railroads (+12%), with North American freight rail stocks buoyed by an unexpectedly positive US manufacturing PMI reading for January. Improving manufacturing sentiment bodes well for future freight haulage volumes. Energy Midstream (+10%) also outperformed in February, aided by solid December quarter earnings and a positive demand outlook for North American energy storage and transportation services.
The worst performing infrastructure sector was Airports (+4%), which delivered relatively muted gains following lacklustre December quarter earnings and an outburst of cartel-related violence that weighed on sentiment towards Mexican operators.
The best performing infrastructure region was Canada (+11%), reflecting strong gains from its freight rail and energy midstream stocks. The worst performing infrastructure region was Latin America (+3%), where toll roads and airports lagged following strong returns over recent months.
^ MSCI World Net Total Return Index (USD) is provided for information purposes only. Index returns are net of tax. Data to 28 February 2026. Source: Bloomberg, First Sentier Investors / Lipper IM. All stock and sector performance data expressed in local currency terms.
Market outlook and Strategy
The strategy 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 end of February / early March saw a sharp increase in geopolitical uncertainty as Israel and the US launched a military operation against Iran. While the situation remains fluid, unfolding events have several potential implications for global listed infrastructure.
The airports sector is likely to be the most sensitive to ongoing conflict in the region, as regional disruption reduces willingness to travel. A sustained higher oil price leading to higher airfares would also represent a headwind for airport volumes. The portfolio does not hold any airport stocks with material direct exposure to the Middle East.
Conversely, higher energy prices are likely to prove supportive of US energy midstream stocks. Iranian attacks on crucial energy infrastructure in the region, or the closure of the Strait of Hormuz in the Persian Gulf, could push oil and natural gas prices higher. In the near term, US LNG exporter Cheniere Energy could benefit if Qatari LNG customers begin to seek alternative sources of supply. Other portfolio holdings with (marginal) LNG exposure include Sempra and ENN Energy. Over the longer term, a higher oil price would encourage more production from upstream customers, requiring more gathering, processing, transport, storage, and export infrastructure.
In other sectors, utilities will need to manage the impact that higher energy costs may have on customer bills. Within this space the portfolio is predominantly focused on US regulated utilities, which should be less affected than European or Asian peers. Over the longer term, an extended period of higher natural gas prices would reinforce the trend towards renewable energy, which would be supportive for portfolio holdings including Ørsted (offshore wind), National Grid (transmission) and NextEra Energy (US renewables). Disruption to global trade may also affect port stocks, which are not held by the portfolio.
More broadly, higher energy prices stemming from an extended period of conflict in the Middle East could push inflation higher and exert pressure on central banks to raise interest rates. We are confident that most infrastructure companies would be able to pass through the effects of higher inflation to consumers, via regulated or contracted pricing.
If the Iran conflict were to extend beyond a few weeks and have more significant impacts on economies and markets, global listed infrastructure would appear relatively well placed. The portfolio is domestically focused and should be largely immune from uncertainty in the Middle East region. We would expect ongoing rotation into defensive sectors, which has been a supportive trend so far this year. We note that during previous market downturns, global listed infrastructure’s beta to global equities has typically ranged between 0.5 and 0.6.
Source : Company data, First Sentier Investors, as of 28 February 2026.
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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