The investment planning advisers in our Perth office would like to present you with information from our parent company, AMP Capital. We handle a variety of investments and we are proud to have the resources of AMP Capital to help us help you with your finances. While we can’t provide individual financial advice in a blog, we would like to pass on some recommendations from Tim Humphreys, AMP Capital Head of Global Listed Infrastructure.
Due to a low correlation between the equities market as a whole and the segment of global listed infrastructure, allocating assets into global listed infrastructure can help diversify one’s investment portfolio. (2)
According to Bloomberg, global listed infrastructure has provided returns of 11.7% per annum over ten years and 14.9% over five years. (1)
Mr Humphreys feels that globally listed infrastructure, which has only been an asset class for approximately ten years, offers what he calls a “significant opportunity for investors” due to what he sees as “relative inefficiency.” (2)
According to Mr Humphreys, dedicated global listed income managers with an eye towards long term investment hold less than 3% of global listed infrastructure stocks. The remaining 97% are held by generalist managers or index funds who use short term forecasts when making investment decisions. Mr Humphreys feels that the short term is not the correct way to value these assets. (2)
According to Mr Humphreys, the inefficiency of the 97% in using short term forecasts provides ample opportunities for those who specialise in infrastructure investment to provide value to the investor. He feels that the nature of long-term contracts and regulation of global traded infrastructure make them a stable and predictable investment. (2)
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(1) Bloomberg. Total Return in USD of Dow Jones Brookfield Global Listed Infrastructure Index as of 31 December 2014.
(2) AMP Capital. How does global listed infrastructure fit into your equity portfolio. 06 November 2015.