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 June 2025
Global Listed Infrastructure edged higher in June as investors shrugged off ongoing US tariff uncertainty and tension in the Middle East. The FTSE Global Core Infrastructure 50/50 index returned +0.9% in June, while the MSCI World index ended the month +4.3% higher.
The best performing infrastructure sectors included Towers / Data Centres (+2%); large-cap US tower operators were supported by the appeal of their domestically focused business models, stable cash flows and reasonable valuation multiples. The worst performing infrastructure sector was Airports (-2%) as higher oil prices weighed on the sector.
The best performing infrastructure region was Japan (+3%), owing to gains for its electric utility stocks. The worst performing infrastructure region was Canada (-2%), where large-cap energy midstream stocks underperformed as investors took profits following gains over the past year.
Fund performance
The Fund returned +0.8% after fees in June, -12bps behind the FTSE Global Core Infrastructure 50/50 Index (USD, Net TR).
The best performing stock in the portfolio was US energy midstream stock Targa Resources (+10%). The company gathers and processes natural gas and Natural Gas Liquids (NGLs) in energy producing areas such as the Permian Basin in Texas, before transporting the output to major US and international markets. Its share price gained on the appeal of its strategically located assets and a positive outlook for earnings growth. During our team’s meeting with them this month the management team expressed confidence in 2026 earnings, citing the beneficial effect of new projects coming into service.
Peer DT Midstream (+6%) also gained on a positive demand outlook. Natural gas volumes in the Texas / Louisiana-focused Haynesville Basin – a key area of operations for DT Midstream – increased by 9% during the June quarter. US Liquefied Natural Gas (LNG) exporter Cheniere Energy (+3%) climbed after announcing plans to substantially expand its LNG export facilities at Corpus Christi on the Texas Gulf coast; as well as an 11% dividend increase.
German-listed regulated utility and renewables developer RWE (+7%) rose on investor optimism about future tailwinds for the company. These include extensive plans to upgrade European energy and utility infrastructure, aided by the recent loosening of Germany’s fiscal rules. For example, additional gas-fired power plants will be needed in Germany to provide a reliable source of backup power to the country’s renewable energy sources.
Regulated US utility Public Service Enterprise Group (+5%) increased after merchant power company Constellation Energy (+5%, not held) announced it had agreed to provide electricity from one of its nuclear power plants to Facebook’s parent company Meta. The deal provides a reminder of the potential value of PSEG nuclear power plants; the company is reported to be exploring opportunities to sell power directly from these plants to data center / tech companies. Regulated utility Evergy (+4%) gained following favourable regulatory developments in Kansas. The company is also positioned to benefit from growing demand for power within its service territory, with Panasonic building a $4 billion electric vehicle battery factory in De Soto, Kansas, and Google and Meta both developing substantial data centers in the Kansas City region.
Political uncertainty affected US peers with a focus on renewables, such as Minnesota-based Xcel Energy (-2%) and Florida’s NextEra Energy (-1%) as President Trump’s tax cut and spending package, known as the “One Big Beautiful Bill”, drew closer to being signed into law. The terms of the Bill are set to reduce future support for renewables development that had been included in President Biden’s Inflation Reduction Act. Positively, existing utility capex plans are unlikely to be disrupted owing to safe-harbouring provisions. Over the longer term, growing demand for power in the US, and the relative ease of renewables buildout compared to natural gas-fired or nuclear power plants, should continue to underpin demand for renewables development.
Other underperforming stocks in the portfolio included French airport operator Groupe ADP (-8%), which dipped following two months of strong gains on concerns that higher oil prices could lead to higher flight prices and weigh on traveller demand; while the escalation of conflict in the Middle East increased uncertainty around traffic flows to the region. Swiss operator Flughafen Zurich (-1%) was affected by similar concerns. Mexican peer Grupo Aeroportuario del Pacífico (-3%) gave up ground as its passenger growth rate softened in May.
Toll road operator Atlas Arteria (-4%) underperformed on market commentary noting that the concession for the French motorway group APRR (of which it owns a 31% minority interest) now appears less likely to be granted an extension and is more likely to be re-tendered than had previously been assumed. Promotora y Operadora de Infraestructura S.A. de C.V (-2%), which operates a portfolio of Mexican toll road concessions, also eased as investors took profits following strong ytd returns.
Fund activity
No new stocks were added to the portfolio in June, and holdings in existing stocks were generally maintained at current weights.
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.
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. Price increases are typically linked to inflation, with negotiated compensation for additional capital expenditure. Over the medium term, additional road capacity will be needed to reduce 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 deliver this.
The portfolio is also overweight airports, via European, Mexican, Japanese and Chinese operators. Demand for air travel is being driven by a range of factors, including developed world baby boomers enjoying a wealthy retirement, robust demand from Generation Z prioritizing travel spend over the accumulation of material possessions, and an expanding middle class in the developing world.
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 centers, 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, adding new gas-fired power plants, and continuing with the build-out of renewables. 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 gas-fired power plants, leading to additional growth opportunities for US-based energy midstream companies.
Source : Company data, First Sentier Investors, as of 30 June 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 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.
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