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Argo LIC posts 177% profit rise

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Argo Global Listed Infrastructure Ltd has announced a record full-year profit of $44.9 million, up 177 per cent for the full financial year.

The listed investment company’s final dividend has been increased to 4.0 cents per share fully franked. For the year to 30 June 2019, the portfolio delivered a total return of 22.7 per cent, exceeding the benchmark return and delivering almost twice the return of the Australian equity market, which rose by 11.5 per cent.

“The performance of global listed infrastructure securities amid market volatility demonstrates the strength of the asset class and its low correlation to broader equities,” the company said in a statement. 

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“When sharemarkets across the world fell sharply at the end of 2018, Argo Infrastructure’s portfolio significantly outperformed both broader local and global equities. 

“During the recent turbulent market conditions, the value of ALI’s portfolio has continued to rise steadily. During the year, the portfolio manager, Cohen & Steers, increased exposure to the more defensive areas of infrastructure, particularly electric utilities, which contributed to the strong performance of the portfolio.”

Argo Infrastructure grew its portfolio by 2.1 per cent in July to outperform the benchmark infrastructure index, which returned 1.4 per cent.

The group noted that with macroeconomic data indicating slowing global growth and US-China trade tensions persisting, global listed infrastructure offers a relatively attractive investment option.

“We remain confident infrastructure stocks will continue to deliver relatively stable returns. Our positive outlook for the asset class is underpinned by compelling global trends driving structural, rather than cyclical, demand for infrastructure asset investment,” the company said. 

“In broad terms, an uncertain global outlook combined with historically low but still declining interest rates should suit the infrastructure sector. Its assets typically generate strong and reliable cash flows through various economic cycles, helping the sector to produce solid returns to investors, which are less volatile than broader equities, whilst providing sustainable income as cash rates fall.”

 

Argo LIC posts 177% profit rise
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James Mitchell

James Mitchell

James Mitchell is the editor of the Wealth and Wellness suite of platforms at Momentum Media including Investor Daily, ifa, Fintech Business, Adviser Innovation and Wellness Daily.

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