Look before you leap
While we have already seen evidence of an influx of new funds, these will remain untested for some time and despite modelling, which is by no means perfect, remains a leap of faith for the average investor.
Given the disparate performance track records within the sector, it is crucial to understand the underlying makeup of the infrastructure fund you are considering, because there is little commonality between funds with infrastructure in the title.
One relatively new IA Specialist fund is VT UK Infrastructure Income.
It is predominantly a UK fund investing in other infrastructure funds as well as direct investments, and it invests in both equity and fixed income.
This model has the advantage of dampening some of the volatility of other funds, but the value of this depends on what fund characteristics you seek.
Much of the sector is moved by basic material prices and other commodities, and while Trump is ‘putting America first’, this could have a negative impact on some emerging markets.
There is certainly an investment case for infrastructure- heavy funds but thorough research into the investment characteristics is imperative.
