A monthly review and outlook of the Global Listed Infrastructure sector.
Market review - as at December 2025
Global Listed Infrastructure eased in December after a year of robust gains. The best performing infrastructure sector was Airports (+4%), which were buoyed by a positive outlook for passenger volumes and favourable regulatory developments. The worst performing infrastructure sector was Utilities / Renewables (-4%) as political / regulatory uncertainty and an element of profit-taking overshadowed these companies’ favourable demand dynamics.
The best performing infrastructure region was Asia ex-Japan (+2%), reflecting gains for its airports and ports. The worst performing infrastructure region was the United States (-3%), owing primarily to underperformance from its large-cap utilities / renewables stocks.
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.
The outlook for global listed infrastructure remains positive, supported by a range of growth drivers. Utilities are experiencing unprecedented demand for electricity, fuelled by AI and data centers, industrial onshoring, and the broader shift toward electrification. In the US, earnings growth for utilities has already accelerated as companies invest to meet rising power needs. This trend is now also becoming evident in Europe and across the Asia-Pacific. The ongoing transition to decarbonized electricity - moving from coal to natural gas, renewables, and eventually next-generation nuclear - adds another layer of capex-driven earnings growth. Further, 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.
In the US energy midstream sector, additional investment will be needed to support rising natural gas exports and growing demand for electricity generation. Airports are benefiting from the recovery in production capacity at aircraft manufacturers Boeing and Airbus, alongside strong travel demand from wealthy retirees and Generation Z. Passenger volumes from India and China are also increasing. The North American freight rail sector is set to be transformed by the planned merger between west coast operator Union Pacific and east coast peer Norfolk Southern. The proposed combined intercontinental railroad company will represent a step-change for connectivity, efficiency and productivity within this space. More broadly, we expect a less certain macroeconomic / geopolitical backdrop to reinforce investor demand for infrastructure’s regulated / contracted earnings and essential service provision.
However, risks remain. Rising US electricity prices and resulting affordability concerns could increase political and regulatory pressure on utilities - as seen in New Jersey, where the governor-elect has pledged to freeze rates for a year. The mobile tower business model is beginning to face challenges from direct-to-device satellite services, while the rollout of 5G technology has been less transformative than anticipated. Despite these headwinds, we believe the global listed infrastructure asset class has the potential to deliver solid risk-adjusted returns in 2026, and to perform well relative to both bonds and equities.
Source: First Sentier Investors as at 31 December 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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