Steady income sees sector’s star on rise

This article is part of
Investing in Alternatives – September 2016

Commenting on the Legg Mason launch, Tom Jemmett, fund analyst at Brewin Dolphin, notes: “We’ve been investing in listed infrastructure for some time now as we feel the sector offers a more liquid and diversified route than investing directly, while offering the potential for good capital growth with inflation-protected income. Notwithstanding the defensive qualities a strategy tilted towards regulated global utilities should bring, we like the RARE fund as it helps diversify our current exposure while providing an income premium.”

Mr McDermott adds: “The Legg Mason Rare fund has a yield of 5 per cent, and invests globally. The 13-strong specialist investment team places a heavy emphasis on certainty of future revenues. I also like VT UK Infrastructure Income, which launched earlier this year, and only invests in UK infrastructure. About two-thirds of the fund invests in investment trusts exposed to different types of infrastructure and the rest is in direct equities. It also holds some infrastructure fixed income. It has a yield of 5 per cent.”

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Although the Autumn Statement is not due for a few more months, there are still plenty of encouraging signs that infrastructure will continue to gain favour from the more income-hungry investors.

Nyree Stewart is features editor at Investment Adviser