Global Listed Infrastructure monthly review and outlook

Global Listed Infrastructure rose in June, supported by robust fundamentals and generally positive demand dynamics. The best performing infrastructure sector was Airports (+7%), which advanced following an interim agreement between the United States and Iran to open the Strait of Hormuz. The resulting fall in oil prices led to hopes of lower airline ticket prices and potentially higher airport passenger volumes.   

The worst performing infrastructure sector was Towers/Data Centers (-12%), reflecting mounting concerns for competitive pressure and the withdrawal of previously anticipated takeover interest.

The best performing infrastructure region was Latin America (+5%), as Mexico’s airport operators led the region higher. The worst performing infrastructure region was Australia/New Zealand (-1%), reflecting weakness in its toll road and data center stocks.

The Fund returned +1.1% after fees in June¹, -160 basis points behind the FTSE Global Core Infrastructure 50/50 Total Return Index (SGD).   

The best performing stock in the portfolio was GFL Environmental (+10%), the fourth-largest North American waste management company with operations in every province in Canada and across 18 US states. Its share price rose as investors became more comfortable with its unexpected acquisition of smaller western Canadian peer Secure Waste Infrastructure, announced in April 2026. A backdrop of improving US economic data points - rising US Manufacturing Purchasing Manager’s Index (PMI) readings and robust industrial production levels - also proved supportive. Healthy economic activity levels tend to lead to higher volumes for waste companies.

Regulated US utility American Electric Power (+8%) continued its upward trajectory following mid-month investor meetings in which the company reiterated its long-term earnings growth guidance of “greater than 9%”. This growth is being underpinned by rising demand for electricity from data centers within its Midwest and Texas service territories. This is creating substantial capital expenditure opportunities, such as expanding/improving its transmission grids and building additional generation assets. The company then earns an allowed regulated return on these investments.

Kansas-based peer Evergy (+5%) was buoyed by similar drivers; tech giant Alphabet (Google) is building a large data center campus in Evergy’s Missouri service territory, while Meta (Facebook) also has a significant data center presence in the same region. California-based peer Sempra (+5%), whose businesses include fast-growing Texas transmission and distribution utility Oncor, also gained.

The portfolio’s airport holdings generated positive returns as the oil price eased, led by Mexican operator Grupo Aeroportuario del Pacífico (GAP) (+8%), which operates twelve airports throughout Mexico’s Pacific region. Over the medium term, the company is expected to derive meaningful commercial revenue growth from expanding its terminal infrastructure and making improvements to its retail offering. Spanish peer AENA (+7%) also rallied, aided by accelerating passenger growth. Traffic volumes at its airports were 5% higher in May 2026 than the same period a year ago.

In the North American energy midstream space, US Liquefied Natural Gas (LNG) exporter Cheniere Energy (+6%) gained on the prospect of healthy demand for US LNG exports amid ongoing disruption to supply from the Persian Gulf. Cheniere continues to increase its LNG production capacity; during the month, the company announced that it had reached “substantial completion” of Train 6 (out of 7) at its Corpus Christi Liquefaction Stage 3 expansion project in Texas. Peers DT Midstream (+5%) and Targa Resources (+5%) also rose on the prospect of a favourable operating environment. DT Midstream’s assets include pipeline networks that transport natural gas from the Texas/Louisiana Haynesville basin to coastal US LNG export terminals. Higher volumes of natural gas liquids are likely to drive demand for Targa Resources’ energy transportation and storage assets.

The worst performing stock in the portfolio was Chinese gas utility ENN Energy (-23%). Its stock price fell following news that a planned takeover by its parent company ENN Natural Gas will no longer proceed. Beijing Airport (-15%) gave up ground as China's weak consumer environment continued to weigh on the recovery of passenger spend rates in airport retail. Chinese mobile tower operator China Tower (-11%) weakened as it tracked the broader H-listed Chinese market, which ended the month 10% lower.

US mobile tower stocks represented another area of weakness for the portfolio. Crown Castle (-16%) and SBA Communications (-13%) fell on concerns that satellite operator Starlink (part of newly listed aerospace and technology company SpaceX) may increasingly seek to compete with incumbent US telecom operators such as AT&T, T-Mobile and Verizon. Over the long term, this could displace terrestrial mobile demand, potentially reducing the need for telecom operators to further expand their respective tower footprints. Indications that previously rumoured takeover interest in SBA Communications appeared to have come to a standstill also weighed on SBA’s share price.

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.

The portfolio initiated a position in Republic Services, the second-largest US provider of waste management/environmental services with operations in 41 states. The company has strong pricing power, high barriers to entry, and is run by a well-regarded and shareholder-focused management team. A normalising free cash flow growth rate - from the elevated pace seen between 2023 and 2025 - has caused the company’s valuation multiples to reduce in recent months, presenting a relatively appealing entry point. From here we expect stable/growing volumes, solid pricing, disciplined cost control, and scope for additional share buybacks to underpin healthy earnings growth over the medium term.  

A holding in Virginia-based regulated utility Dominion Energy was divested ahead of its anticipated takeover by larger peer NextEra Energy.   

The strategy 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 portfolio has overweight exposure to airports. The sector is well-positioned to benefit from the ongoing drivers behind global travel demand growth; wealthy baby boomers with money to spend on travel during their retirement, Gen Z prioritising experiences over possessions, and growing middle classes in Asia and Latin America. Having lagged following the outbreak of hostilities between the US and Iran, we believe there is further scope for recovery, even after the sector’s strong June performance.

The portfolio is overweight railroads, via holdings in US freight rail operators and European and Japanese passenger rail stocks. North American freight rail companies represent a key component of the continent’s transportation system and are a core part of the global listed infrastructure opportunity set. Proposed mergers & acquisition (M&A) activity within this space is expected to support earnings growth by providing scope for reliability improvements, faster transit times and cost efficiencies.

Utilities/renewables make up a substantial part of the portfolio. These stocks are benefiting from unprecedented growth in demand for electricity, driven by the needs of Artificial Intelligence (AI) and data centers, as well as industrial onshoring and a broad-based move towards electrification. Earnings growth rates for US utilities have already begun to accelerate due to the required investment to support greater demand for power. 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.

The portfolio is underweight energy midstream. Within this space, the portfolio has overweight exposure to faster-growing US energy midstream stocks but is substantially underweight Canadian companies, which tend to have higher leverage and slower growth. Rising demand for electricity in the US, as well as being positive for utilities, is supporting demand for natural gas as a feedstock for gas-fired power plants, with scope to create additional growth opportunities for US-based energy midstream companies.  The Ukraine and Iran conflicts also provide opportunities for North American energy midstream companies to serve export markets by providing a relatively cheap and reliable source of LNG and Natural Gas Liquids. 

Source: Company data, First Sentier Investors, as of 30 June 2026.