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.
A monthly review and outlook of the Global Listed Infrastructure sector.
Market review - as at July 2025
Global Listed Infrastructure gained in July, buoyed by healthy earnings results, corporate activity within the asset class and rising interest in listed infrastructure assets from private market buyers. The FTSE Global Core Infrastructure 50/50 index returned +0.3% in July, while the MSCI World index ended the month +1.3% higher.
The best performing infrastructure sector was Airports (+4%), led by Asian and European operators which gained against a backdrop of generally robust passenger volumes. Utilities / Renewables (+3%) also performed well. US electric utilities gained as political uncertainty eased following the passage of President Trump’s “One Big Beautiful Bill” (OBBB) into law on July 4th. The worst performing infrastructure sector was Towers / Data Centres (-3%), which gave up ground following strong ytd gains.
The best performing infrastructure region was Japan (+6%), reflecting strong gains for its electric utilities and passenger railroads. The worst performing infrastructure region was Latin America (-3%) as underperformance from Brazil’s broader stock market weighed on the country’s transport infrastructure and utility stocks.
Fund performance
The Fund returned +0.9% after fees in July, +60bps ahead of the FTSE Global Core Infrastructure 50/50 Index (USD, Net TR).
The best performing stock in the portfolio was US-listed utility and renewables developer AES Corp (+25%), which operates substantial wind and solar assets and has signed deals to provide technology companies including Google, Microsoft and Amazon with carbon-free energy. The stock increased on hopes that the company may be acquired, after it was reported that leading unlisted infrastructure investors had been drawn to the company’s appealing valuation multiples.
American Electric Power (+9%), whose utility businesses serve 5.6 million customers across 11 US states, gained after announcing better-than-expected June quarter earnings, citing strong customer growth and an improving regulatory backdrop, and raising its full year earnings guidance. Minnesota-based regulated utility Xcel Energy (+8%) also climbed. During the month, the company announced plans to increase power generation capacity in its Texas and New Mexico service areas – including additional wind, solar and battery resources – in order to meet “rapidly rising” demand.
US east coast railroad operator Norfolk Southern (+9%) rose after its larger US west coast railroad Union Pacific (-4%, not held) provided confirmation of its plans to acquire the company in a US$85 billion cash-and-stock deal. Assuming regulatory approval is granted, the deal is expected to close in early 2027, creating the first railroad whose track network connects the US east and west coasts. (East coast peer CSX Corp (+9%) also gained on the news. If the Union Pacific / Norfolk Southern merger is allowed to proceed, CSX would become a clear target for BNSF Railway, UNP’s west coast rival which is part of Berkshire Hathaway (-2.9%, not in our Focus List).
The worst performing stock in the portfolio was Motiva (-11%), Brazil’s largest toll road operator, which gave up ground following strong share price gains so far this year. In an absence of material stock-specific news, the decline appears to have been primarily driven by profit-taking. Rising political tension between Brazil and the US weighed on Brazil’s stock market, representing a further headwind. Mexican peer PINFRA (+5%), whose main assets include Mexico City toll road concessions, fared better after announcing the sale of its non-core Altamira port business for a higher-than-expected US$800 million, or ~20x EBITDA multiple.
A holding in Hera (-9%), an Italian multi-utility with four main business segments – gas, electricity, water and waste management – underperformed. The company’s June quarter earnings were lower than expected, as new electricity utility customers weighed on margins for that segment of its business. The company remains well positioned to deliver solid earnings growth over the longer term, underpinned by opportunities to invest capex across its service territories, and aided by the potential to continue its successful track record of acquiring smaller peers.
US energy midstream stock DT Midstream (-7%) ended the month lower on concerns that easing natural gas prices may reduce future volume growth and affect demand for the company’s networks of natural gas transportation and storage assets. Peer Targa Resources (-4%) lagged as lacklustre crude oil production growth across Texas’ Permian basin weighed on sentiment towards the stock. With Natural Gas Liquids (NGL) production outperforming crude, we think Targa can continue to deliver solid earnings growth.
Mobile towers were another area of softness for the portfolio, despite encouraging network deployment trends. Following strong ytd share price gains, American Tower (-6%) and smaller peer SBA Communications (-4%) both dipped in July. Positively, mobile network equipment maker Ericsson reported “good growth” for its North American operations in the June quarter, indicating better tower leasing ahead.
Fund activity
The portfolio initiated a position in US-listed Equinix, one of the world’s largest listed pure-play data centre companies with 270 data centres across the United States, EMEA and Asia. Equinix operates primarily in the retail colocation space with a small presence in hyperscale; its customers rent space at its data centres to house their servers and other IT infrastructure. The stock was added to the portfolio after its biennial Analyst Day disappointed on higher capex and funding costs, providing an attractive entry point to this well-managed company positioned to benefit from long term growth drivers.
The portfolio also added a holding in Brazilian freight rail company Rumo. The company operates a ~14,000km track network, including the rail infrastructure that transports agricultural goods (soybeans, wheat, maize) from the inland Mato Grosso region to the Port of Santos, one of Brazil’s key export gateways. The stock has lagged in recent months as a late soybean harvest and increased grain storage capacity in Mato Grosso have weighed on haulage volumes. As the year progresses these headwinds should unwind; over the longer term Rumo is well-positioned to benefit from Brazil’s rising agricultural production levels and the strong pricing power of its assets.
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 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 increases in electricity demand being driven by Artificial Intelligence (AI), data centres, onshoring of manufacturing and electrification. While additional equity will be needed to fund some of this capex, this theme should also enable the sector’s Earnings per Share growth to accelerate from a typical range of between 3% and 5% per annum to between 5% and 8% per annum, representing a meaningful positive shift. Higher-than-expected prices for the 2026-27 PJM capacity auction (the mechanism which manages the electric grid across 13 eastern US states and Washington DC) provided the latest data point highlighting robust US power demand.
This rising demand is also likely to bolster the need for natural gas, which has a crucial role to play in maintaining energy reliability and affordability. As well as benefitting utilities, this is also likely to drive additional demand for North American energy transportation, storage and export assets, presenting energy midstream companies with new opportunities to invest and grow.
Digitalisation is another key theme for the asset class. We expect structural growth in demand for mobile data (underpinned by an ever-growing reliance on digital connectivity) to support long-term earnings growth for Towers. The adoption of 5G technology over coming years will require networks to handle increased data speed and lower latency as well as a much higher number of connected devices. The surge of interest in AI is driving data center demand, as well as boosting the need for electricity. Data centers are also benefitting from companies seeking the improved reliability and flexibility offered by cloud computing.
Source : Company data, First Sentier Investors, as of 31 July 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.
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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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 Group 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 First Sentier Group, 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 material may not be edited and/or reproduced in whole or in part without the prior consent of First Sentier Group. 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 First Sentier Group’s portfolios at a certain point in time, and the holdings may change over time.
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 Group, 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.
First Sentier Investors (Hong Kong) Limited is part of the investment management business of First Sentier Group, which is ultimately owned by Mitsubishi UFJ Financial Group, Inc. (“MUFG”), a global financial group. First Sentier Group includes a number of entities in different jurisdictions.
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