Infrastructure an option to consider
Wednesday, November 01, 2017
Infrastructure as an asset class is a relative newcomer to the investment world and was greeted some years ago with scepticism. Infrastructure assets are roads, railways, ports, airports, telecommunications facilities, electricity generation, gas or electricity transmission or distribution, water supply or sewerage, and hospitals.
And of course energy production in Australia has been in the forefront of the news lately. Research done recently by Amp Capital’s Shane Oliver shows that infrastructure has become the steady returner for retiree’s. Oliver has demonstrated that out of the past fifteen years Infrastructure has been the best performing asset class four times.
Generally speaking, in order for a security to meet the infrastructure definition, its underlying business must provide a service that is essential to the efficient functioning of a community. It must also generate cash flows that are not subject to external risks such as commodity prices or bear any sovereign risks.