The Legg Mason IF RARE Global Infrastructure Income Fund is expected to yield income of circa 5% and a total return of G7 inflation plus 5.5% per annum, the asset manager said. It will target a high level of income and a total return above global inflation.
The fund’s stocks will be solely selected from the listed infrastructure universe, spanning the European and North American markets, as well as developed markets in Asia Pacific.
While regulated utilities will make up the bulk of the fund’s holdings (50-90%), it will also invest in transport assets (up to 45%), communication assets (up to 20%) and companies focused on community infrastructure (up to 20%).
Nick Langley, co-CEO and CIO of RARE turned co-manager of the global infrastructure income fund, remarked: “In the current environment it can be tough for investors to generate an income, with cash paying next to no yield and government bonds also seeing yields squeezed. By taking an approach which focuses on companies with strong and secure cash flows and by using only listed securities from around the globe, we believe this fund can provide a compelling blend of both income and capital growth.”
Legg Mason head of UK sales, Adam Gent, added that the group went ahead with the fund launch because client demand had not waned in the post-Brexit haze.
“We had over £26 million in assets under management§ invested at launch, as well as strong interest in the upcoming sterling-hedged share class,” he said. “The fund will allow UK based clients to buy into a diversified set of infrastructure companies that offer dependable cash flows and revenue streams.”
Legg Mason confirmed that a variety of share classes would be available at launch and that a sterling-hedged share class would be available later this month.
