MitonMar 14 2017

Miton launches infrastructure fund

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Miton launches infrastructure fund

Aim-listed asset management group Miton is capitalising on recent interest in infrastructure investment and launching a new Infrastructure Income fund.

The fund, which will have an estimated yield of 4 per cent, will be managed by Jim Wright, who managed the listed infrastructure portfolio for the British Steel pension fund.

The fund will be invested in 40 or 50 global infrastructure companies, and the manager’s ambition is to grow the dividend by between 4 and 6 per cent per year.

Infrastructure funds are proving popular thanks to policies in many areas of the globe to grow the economy through public infrastructure investment.

More than 80 per cent of the fund is expected to be invested in companies listed in North America, the UK and Europe, where interest in infrastructure is growing.

President Donald Trump announced a huge infrastructure programme in his presidential acceptance speech, while chancellor Philip Hammond’s Autumn Statement also announced an infrastructure spending programme.

Mr Wright said infrastructure was a particularly good investment in volatile times.

“The sector has proven to be resilient during periods of market volatility versus other equity sectors, while also providing capital growth and stable income returns.”

He also said the sector is popular with income-hungry investors.

“They have regulated or long-term contracted revenues and are relatively uncorrelated to wider macroeconomic cycles.,” he said.

Almost half the portfolio will be weighted in the utilities sector, with the remainder invested in companies with similar risk and return profiles: telecoms, transport, and oil and gas pipeline and storage infrastructure.

Financial adviser Minesh Patel, director of EA Financial Solutions in London, said infrastructure funds are currently popular with clients.

Mr Patel said: “Infrastructure has a good track record, and 4 per cent is quite a strong yield in this environment.

“It is not a massive sector, but there are currently some strong funds in this area.

“By investing in infrastructure companies, the fund has the potential to deliver long-term dividend income, inflation-linked and risk adjusted returns, complementing a diversified portfolio.” 

The fund will not adhere to a benchmark, but will sit within the IA Global Equity Income sector.

It will have both income and accumulation share classes.

The F share class will have an annual management charge (AMC) of 0.5 per cent  (OCF capped at 1 per cent) with a minimum investment of £100,000 and a B share class with an AMC of 0.75 per cent (OCF capped at 1.5 per cent) with a minimum investment of £1,000.

The fund will launch on 23 March.