Close
SI-logo-black-png.png

Stewart Investors manage investment portfolios on behalf of our clients over the long term and have held shares in some companies for over 20 years. They launched their first investment strategy in 1988.

Discover more
Important Note Click to maximise

Please read the following important information for First Sentier Global Listed Infrastructure Fund

• The Fund invests primarily in global listed infrastructure and infrastructure-related equity securities or equity related securities worldwide. Investments in infrastructure projects may involve risks including projects not being completed on time and within budget, changes in environment laws and regulations.

• The Fund’s investments may be concentrated in small number of companies/countries, a single country/sector, a specific region, a limited/specialist sector, or in fast growing economies which may have higher volatility or greater loss of capital than more diversified portfolios. The Fund may also expose to RMB currency and conversion risk.

• Small/ mid-capitalisation securities may have lower liquidity and their prices are more volatile to adverse economic developments.

• The Fund may use FDIs for hedging and efficient portfolio management purposes, which may subject the Fund to additional liquidity, valuation, counterparty and over the counter transaction risks

• For certain share classes, the Fund may at its discretion pay dividend out of capital or pay fees and expenses out of capital to increase distributable income and effectively a distribution out of capital. This amounts to a return or withdrawal of your original investment or from any capital gains attributable to that, and may result in an immediate decrease of NAV per share.

• It is possible that a part or entire value of your investment could be lost. You should not base your investment decision solely on this document. Please read the offering document including risk factors for details.

Global Listed Infrastructure monthly review and outlook

Global Listed Infrastructure monthly review and outlook

A monthly review and outlook of the Global Listed Infrastructure sector.

Market review - as at April 2025

Global Listed Infrastructure finished an eventful month higher against a backdrop of evolving US tariff news flow. The FTSE Global Core Infrastructure 50/50 index returned +1.7%, while the MSCI World index^ ended the month +0.9% higher. 

The best performing infrastructure sector was Toll Roads (+6%), reflecting the appeal of domestically focused businesses with limited direct exposure to tariffs. Water / Waste (+6%), Towers / Data Centres (+5%) and Airports (+5%) also performed well. 

The worst performing infrastructure sector was Energy Midstream (-4%), as lower oil and natural gas prices and the prospect of a potential economic slowdown raised concerns about the sector’s growth outlook. Railroads (-3%) also lagged on the view that tariffs were likely to result in lower haulage volumes for North American freight rail operators – both directly if fewer goods were to enter the US from abroad; and indirectly if they were to trigger weakness across the US economy.

The best performing infrastructure region was Latin America (+11%), aided by strong returns from its toll road and airport stocks. The worst performing infrastructure region was the United States (-2%). Regulatory uncertainty weighed on US utilities with renewables-focused operations, while its freight rail and energy midstream stocks lagged for reasons outlined above.

^ MSCI World Net Total Return Index (USD) is provided for information purposes only. Index returns are net of tax. Data to 30 April 2025. Source: First Sentier Investors / Lipper IM. All stock and sector performance data expressed in local currency terms. Source: Bloomberg.

Fund performance

The Fund returned +2.9% after fees in April, +126bps ahead of the FTSE Global Core Infrastructure 50/50 Index (USD, Net TR).

The best performing stock in the portfolio was Brazil’s largest toll road operator Motiva (+17%) – previously named CCR – whose assets include the concession to manage the main route between Rio de Janeiro and São Paulo. Its share price increased strongly on the appeal of its undemanding valuation multiples, while gains from the broader Brazil stock market provided an additional tailwind. Motiva is currently considering the sale of its airports division – a move which would enable the company to strengthen its balance sheet and focus on its core toll road business.

French toll road operator Vinci (+9%), which manages a 4,400km network of French motorways alongside a global airport portfolio and construction and energy divisions, announced healthy March quarter earnings and reiterated its earnings forecasts for 2025. Traffic on its French roads increased by +2% compared to the same period a year earlier; while passenger volumes at its airports rose by +6%. Australian-listed Atlas Arteria (+6%), whose main asset is a 31% stake in APRR, the second largest motorway network in France after Vinci’s; Mexican toll road company PINFRA (+6%); and Australian-listed Transurban (+5%) also ended the month higher. These companies announced solid March quarter earnings numbers; investors also appear to have been drawn to their domestically focused business models and predictable earnings profiles.

Groupe ADP (+17%), which operates France’s two largest airports – Charles de Gaulle and Orly in Paris – as well as owning stakes in Indian and Middle East airports, also performed well. The company announced better-than-expected March quarter earnings and reiterated its full year guidance. Positive developments related to the company’s regulatory framework in France, including scope for a higher allowed return than previously expected, and a potential increase in the regulatory period from its usual five years to ten, provided a further tailwind.

US mobile tower operator SBA Communications (+11%) gained after announcing solid March quarter earnings, supported by healthy leasing rates on its towers. Company management noted that, to date, its telecom company customers do not appear to have been affected by macroeconomic or tariff uncertainty. Peer American Tower (+4%) also climbed after announcing better than expected March quarter earnings and raising its full year earnings guidance. Positively for the sector, networking / telecoms company Ericsson (+5%, not in our Focus List) reported rising demand within the US for the mobile phone networking equipment that is placed on towers.

The worst performing stocks in the portfolio were energy midstream operators ONEOK (-17%) and Targa Resources (-14%). The stocks gave up ground on concerns that lower oil prices could reduce activity levels from US exploration and production companies, lessening future demand for energy midstream services. The extent of these share price movements was driven more by sentiment than a reflection of fundamentals; both companies have recently reiterated their earnings guidance for the full year. US Liquefied Natural Gas exporter Cheniere Energy (flat) held up better, supported by its market-leading position and expectations of robust demand for US LNG over the medium term.

Utilities and renewables were affected by persistent concerns that parts of the Inflation Reduction Act, passed by Joe Biden in 2022 to support the buildout of renewables and storage, may be repealed by the Trump administration. NextEra Energy (-6%), which operates regulated utilities in Florida as well as the largest developer of renewables across the US, was affected though our portfolio position had been materially reduced in advance. Other regulated US utility holdings including Exelon (+2%), Evergy (flat), Duke Energy (flat) and American Electric Power (-1%) held on to most or all of their robust ytd returns, supported by the view that they remain well positioned to benefit from the significant increases in demand for electricity that is forecast over the coming decade.

Freight railroads were another area of weakness within the portfolio. US east coast operators CSX Corp (-5%) and Norfolk Southern (-5%) both fell sharply at the start of the month when the scale of proposed US tariffs was first revealed, before regaining some ground as the month progressed and hopes for compromise began to emerge. March quarter earnings from both companies were below market expectations, owing to challenging operating conditions and unfavourable weather. While the extent of tariff impacts will become clearer over future months, the risk of lower haulage volumes now largely appears to be reflected in valuation multiples.

Fund activity

The Fund divested a holding in US west coast freight rail company Union Pacific. The company’s intermodal volumes may come under pressure as fewer Chinese goods arrive at the US west coast ports of Long Beach and Los Angeles, owing to US tariffs.

Market outlook and fund positioning

The Fund invests in a range of listed infrastructure assets including toll roads, airports, railroads, utilities and renewables, energy midstream, wireless towers and data centres. 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. Domestically focused business models give them limited direct sensitivity to tariffs or trade restrictions. Revenues tend to be robust, with consistently high operating margins of between 60% and 80%. Price increases are typically linked to inflation, with negotiated compensation for additional capital expenditure. Although the earnings growth rate of these companies may reduce as inflation eases, free cash flow generation should remain healthy. This is expected to reinforce balance sheet strength and increase share buyback opportunities.

The portfolio is also overweight mobile towers via US, European and Chinese operators. The sector continues to benefit from structural growth in demand for mobile connectivity. Stable, defensive cash flows and long-term contracts make them less sensitive to the economic environment. Having underperformed the broader market during a period of rising / elevated interest rates between 2022 and 2024, we continue to see appealing value in this segment of our opportunity set, even after outperformance so far in 2025.

A substantial portion of the portfolio consists of utilities / renewables. These stocks are set to benefit from unprecedented growth in demand for electricity, being driven by the needs of AI and data centres, as well as industrial onshoring and a broad-based move towards electrification. This backdrop is leading many utilities to pursue an “all-of-the-above” approach to power generation – extending the life of existing coal and nuclear plants, as well as adding new gas-fired power plants, continuing with the build-out of renewables and, with an eye to the longer term, investigating the possibilities of next-generation Small Modular Reactor nuclear units. Regulated utilities typically earn an agreed return on money spent in this way, meaning that additional opportunities to spend capex are supportive of earnings growth.

The portfolio is underweight energy midstream. Within this space, the portfolio has overweight exposure to US energy midstream stocks but is substantially underweight Canadian companies, which tend to have higher leverage and slower growth. We prefer US-listed operators servicing low-cost basins; or that are positioned to benefit from growth in US exports. 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 gasfired power plants, leading to additional growth opportunities for US-based energy midstream companies.

Source : Company data, First Sentier Investors, as of 30 April 2025.

These figures refer to the past. Past performance is not a reliable indicator of future results. For investors based in countries with currencies other than the base currency of the share class, the return may increase or decrease as a result of currency fluctuations. Performance data calculated since the launch date. Performance data is calculated on a net basis by deducting fees incurred at fund level (e.g. the management and administration fee) and other costs charged to the fund (e.g. transaction and custody costs), save that it does not take account of initial charges or switching fees (if any). Income reinvested is included on a net of tax basis. First Sentier Global Listed Infrastructure Fund, Class I (Distributing) USD shares. Benchmark is the FTSE Global Core Infra 50/50 TR Index from 1 April 2015, prev. UBS Global Infra & Utilities 50/50 TR Index.

 

Important Information

Investment involves risks, past performance is not a guide to future performance. Refer to the offering documents of the respective funds for details, including risk factors. The information contained within this material has been obtained from sources that First Sentier Investors (“FSI”) believes to be reliable and accurate at the time of issue but no representation or warranty, expressed or implied, is made as to the fairness, accuracy or completeness of the information. To the extent permitted by law, neither FSI, nor any of its associates, nor any director, officer or employee accepts any liability whatsoever for any loss arising directly or indirectly from any use of this. It does not constitute investment advice and should not be used as the basis of any investment decision, nor should it be treated as a recommendation for any investment. The information in this material may not be edited and/or reproduced in whole or in part without the prior consent of FSI.

This material is issued by First Sentier Investors (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission in Hong Kong. First Sentier Investors, FSSA Investment Managers, Stewart Investors, RQI Investors and Igneo Infrastructure Partners are the business names of First Sentier Investors (Hong Kong) Limited.

Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. All securities mentioned herein may or may not form part of the holdings of FSI’s portfolios at a certain point in time, and the holdings may change over time.

First Sentier Investors (Hong Kong) Limited is part of the investment management business of First Sentier Investors, which is ultimately owned by Mitsubishi UFJ Financial Group, Inc. (“MUFG”), a global financial group. First Sentier Investors includes a number of entities in different jurisdictions.

To the extent permitted by law, MUFG and its subsidiaries are not responsible for any statement or information contained in this material. Neither MUFG nor any of its subsidiaries guarantee the performance of any investment or entity referred to in this material or the repayment of capital. Any investments referred to are not deposits or other liabilities of MUFG or its subsidiaries, and are subject to investment risk, including loss of income and capital invested.

© First Sentier Investors Group