Morningstar Australia has nominated two funds with a recommended rating following its review of the global listed infrastructure sector.
Vanguard Global Infrastructure Hedged and RARE Infrastructure Value were given the research house’s second-highest recommendation and stood out among the seven strategies assessed due to factors including stable teams and robust investment processes.
“These two strategies are also our ideal choices for satisfying investors with distinct perspectives about using listed infrastructure,” Morningstar senior research analyst Tim Wong said.
“RARE is the leading candidate for investors more open to capitalising on the sector’s expected long-term growth across both the developed and emerging markets.
“Vanguard meets the needs of investors seeking a vehicle that will be lowly-correlated to equities, and hold firm, particularly in falling markets,” he added.
The remaining five products in the review were given investment grade.
Two of the funds, Colonial First State (CFS) FirstChoice Global Infrastructure and Magellan Infrastructure were new assessments.
“The highly-experienced team at the helm of Magellan’s infrastructure offering adopts laudable discipline when defining what is investible,” Wong said.
The evolving process has made us pause for thought, however, in particular of the switch to running portfolios that are less concentrated and more balanced between utilities and other infrastructure industries,” he said.
“This mix of promise and uncertainty prompted us to designate Magellan Infrastructure as investment grade.”
Wong said the CFS’s multi-manager infrastructure strategy had a sound process to select the individual vehicles that made up the portfolio, but the team’s emphasis on mitigating downside volatility did potentially cap the fund’s ability to outperform over a sustained period.
Other funds in the review include Lazard Global Listed Infrastructure, Macquarie International Infrastructure Securities and Colonial First state Global Listed Infrastructure.
