Global Listed Infrastructure monthly review and outlook

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. 

The Fund returned -2.7% after fees in December¹, -37 basis points behind the FTSE Global Core Infrastructure 50/50 TR Index (SGD).  

The best performing stock in the portfolio was toll road operator PINFRA (+7%), which runs a Mexico City-focused portfolio of roads with a combined length of over 1,000km and a weighted average concession length of 22 years. The company’s share price was supported by its healthy balance sheet and appealing valuation multiples. A strong financial position, resulting from the recent sale of its port assets, is expected to enable PINFRA to participate in future infrastructure projects within Mexico.

Mexican airport operator GAP (+6%) also performed well as investors warmed towards its upcoming acquisition of the Cross Border Express (CBX) – an enclosed pedestrian bridge that connects San Diego and Tijuana airports, providing a secure way to travel between the United States and Mexico. Since it opened in 2015, the CBX has been a key driver of growth at Tijuana International Airport; whose passenger numbers have increased from under 5 million in 2015 to over 12 million in 2024. 

Swiss peer Flughafen Zurich (+5%) owns and operates Switzerland’s largest airport via a concession running to 2051, as well as having airport interests in faster-growing markets including India and Brazil. The company’s share price continued its strong run, driven by a growing recognition of the underlying value of its high-quality property portfolio close to Zurich Airport; and by the growth potential of Noida International Airport in India, which it has developed and is expected to open to passengers in early 2026.

However French airport operator Groupe ADP (-12%), which owns and operates Charles de Gaulle and Orly airports in Paris, fell after the French transport regulator unexpectedly rejected a proposal to increase its average tariffs by 1.5% for the 12-month period ending 30 March 2027. ADP will now draft and submit a new tariff proposal for this period, with a decision expected in February. 

US energy midstream stock Targa Resources (+5%) also gained during the month as investors welcomed news that it had acquired Stakeholder Midstream for US$1.25 billion. The transaction will enable Targa to expand its gathering and processing footprint in Texas’ Permian Basin. Plans by oil major ExxonMobil (+4%, not in our Focus List) to further increase Permian Basin production levels over the period to 2030 also buoyed sentiment towards energy midstream stocks operating in the region, including Targa.

The worst performing stock in the portfolio was Brazil freight rail stock Rumo (-12%). The stock lagged after Brazil conglomerate and controlling shareholder Cosan (-14%, not in our Focus List) sold two parcels of Rumo shares, each representing around 5% of the company’s market capitalisation. The moves sparked investor uncertainty which overshadowed the healthy fundamentals of Rumo’s core rail logistics business. 

Political and regulatory developments weighed on several of the portfolio’s utility holdings during the month. Danish-listed offshore wind developer Ørsted (-11%) fell after the Trump administration suspended leases on all large US offshore wind projects, citing national security concerns. Two of Ørsted’s projects - Revolution Wind and Sunrise Wind off the northeast US coast – are affected by this move. Dominion Energy (-6%), whose Coastal Virginia Offshore Wind project is similarly affected, also underperformed. Both Ørsted and Dominion have issued legal challenges to the suspensions. Minnesota-based Xcel Energy (-9%) ended the month lower following news that Texas’ Attorney General plans to sue the company’s subsidiary Southwestern Public Service Company for negligence in relation to 2024’s Smokehouse Creek wildfire.

¹ Fund performance is based on the Singapore unit trust, net of fees, expressed in SGD terms.
All stock and sector performance data expressed in local currency terms. Source: Bloomberg.

AENA, the monopoly owner and operator of Spain’s 46 airports, was added to the portfolio. The company has proposed a significant investment program between 2027 and 2031, including major terminal and airfield upgrades. These investments are expected to support continued traffic growth and boost passenger retail spending over the longer term. However, the regulatory terms that will apply to the required capex are still subject to political and legislative debate. The resulting uncertainty has weighed on AENA’s share price in recent months, presenting an attractive entry point into the stock and its long-life assets.

A position was also initiated in Hong Kong-based conglomerate CLP Holdings, whose core business – CLP Power – is a regulated electric utility serving the Kowloon and New Territories regions of Hong Kong. The firm also has exposure to Australia via its electric generator and retailer business Energy Australia, and owns nuclear and renewable generation assets in China. Stable, regulated cash flows from its Hong Kong operations and undemanding valuation multiples should enable this defensive, low beta company to hold up relatively well in the event of a market downturn. 

A position in US east coast freight rail operator Norfolk Southern was sold during the month as its proposed merger with west coast peer Union Pacific drew a step closer. During the month both companies submitted their application to the regulator, requesting approval to combine the two railroads. US-listed utility and renewables developer AES Corp was also divested during the month after a period of strong performance, driven by takeover speculation, moved the stock to a lower ranking in our investment process.

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 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