This is a financial promotion for The First Sentier Global Listed Infrastructure Strategy. This information is for investors in the UK and EEA and elsewhere where lawful. Investing involves certain risks including:
- The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
- Currency risk: the Fund invests in assets which are denominated in other currencies; changes in exchange rates will affect the value of the Fund and could create losses. Currency control decisions made by governments could affect the value of the Fund's investments and could cause the Fund to defer or suspend redemptions of its shares.
- Single sector risk: investing in a single economic sector may be riskier than investing in a number of different sectors. Investing in a larger number of sectors helps to spread risk.
- Charges to capital risk: The fees and expenses may be charged against the capital property. Deducting expenses from capital reduces the potential for capital growth.
- Listed infrastructure risk: the infrastructure sector and the value of the Fund is particularly affected by factors such as natural disasters, operational disruption and national and local environmental laws.
Emerging market risk: Emerging markets tend to be more sensitive to economic and political conditions than developed markets. Other factors include greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities. For details of the firms issuing this information and any funds referred to, please see Terms and Conditions and Important Information.
For a full description of the terms of investment and the risks please see the Prospectus and Key Investor Information Document for each Fund.
If you are in any doubt as to the suitability of our funds for your investment needs, please seek investment advice.
Infrastructure companies are leading a global shift to cleaner energy, next-gen transport networks and increasing mobile connectivity. Our Responsible Listed Infrastructure Fund is a high-conviction portfolio with an unwavering focus on responsible investment and aiming to generate positive, long term outcomes.
The Fund’s investable universe includes utilities, toll roads, railroads, airports, energy infrastructure, mobile towers and data centres. These assets have high barriers to entry, effective pricing power, sustainable growth and predictable cash flows. Within this space, we seek companies that are contributing to sustainable development within a framework of good corporate governance.
Why invest in Sustainable Listed Infrastructure?
*1 Comparing MSCI World Index Net TR (USD) with the FTSE Global Core Infrastructure 50-50 Net TR Index (USD) to Dec 2005, and prior to that the Macquarie Global Infrastructure Index 100 Local TR (USD), over 15 years to 28 February 2019
Make a positive difference - The strategy invests in what we believe are high quality infrastructure companies that take a responsible approach to sustainability.
Long-term focus – A sustainability lens can provide important insights into how a company operates, its long term risks and potential rewards for investors.
Attractive performance - A sustainability focus has the potential to improve performance and help deliver positive risk adjusted returns, thanks to a strong focus and understanding of Environmental, Social and Governance (ESG) related risks.
Potential for inflation protected income - The nature of infrastructure assets means they are typically able to increase prices in line with inflation, offering the potential for stable and growing returns over time.
Diversification – As well as low correlation with other asset classes, the portfolio itself is well diversified by sector and country, reducing exposure to event, regulatory and political risk.
Liquid and transparent - The size of the listed infrastructure market is more than US$2 trillion, so investors can have freedom to move in and out of positions. Listed funds also provide daily pricing so investors know exactly what their portfolio is worth.
Xcel Energy is a US-listed regulated utility serving 3.5 million electric and 2 million gas customers in eight Midwestern and Western states, primarily Colorado and Minnesota. We have invested in the company due to its combination of strong environmental credentials, and an attractive 5-7% earnings per share growth. This growth is being driven by its investment in decarbonising its power generation assets: replacing coal with wind; grid advancement; smart meters; transmission; and electric vehicle infrastructure.
Colorado and Minnesota are at the forefront of climate change with adaptive policies promoting cleaner energy generation and electric vehicle infrastructure. Minnesota recently announced a new set of policy proposals that would require the state’s electric utilities to generate power using 100% carbon-free resources by 2050. Colorado has set statutory targets for the state to cut climate pollution by at least 90% by 2050 (relative to 2005 levels). These polices have enabled Xcel Energy to significantly grow its wind portfolio, with plans to add 4,700 megawatts of wind capacity to their system – enough to power approximately 2.3 million homes per year.
Its significant investment in renewable energy with limited, if any, impact to customer bills aligns Xcel Energy with the United Nations’ Sustainable Development Goal 7 of “Affordabl and Clean Energy: ensure access to affordable, reliable, sustainable and modern energy for all”. The company is tracking ahead of its home states climate policies, and is aligned with the UNFCCC Paris agreement to limit global temperatures rise this century to “well below 2 degrees Celsius above pre-industrial levels”.
Source: Xcel Energy and First Sentier Investors, as at 30 June 2020.
The potential of solar
The last decade has seen carbon-free renewables, with the help of low cost natural gas, start to displace coal and oil from the developed world's electricity supply. The International Energy Agency predicts that between 2019 and 2024, the world will add enough renewable generation capacity to power the entire United States.
The continued build-out of renewables, and the need to upgrade and expand energy transmission networks, is expected to underpin stable earnings growth across the utilities sector. Consumers and the environment stand to benefit from increasing supplies of clean, affordable energy. One of the largest positions in our portfolio is NextEra Energy, a large cap US utility whose assets include regulated utility businesses and clean energy leader NextEra Energy Resources.
Australia has one of the world’s greatest solar opportunities, but are we doing enough?
First Sentier Investors’ Global Listed Infrastructure Portfolio Manager, Rebecca Myatt explores the Australian solar landscape.
Australia is both leading and lagging in the development of solar
While Australia leads the world in rooftop solar, we lag other markets like the US in the development of large scale solar infrastructure, with government policies and incentives less attractive than other markets.
Whether it is solar, wind or water, the opportunity for investors is ever growing. But not all countries are developing at the same pace – making global research and access to global markets vital to investment success.