Infrastructure Companies & Funds
Drizzt:
I spotted this post by Roger Nusbaum at ETF Investor. He did mentioned a few aspects of infrastructure companies that will be value add to your portfolio. Not the strategic reasons such as deteriorating assets in US but more:
- Low Correlation to US stocks
- Dividend Yielding
- Constant Demand
- Toll Business creates a investment moat
However there are negative points as well:
- Low Rates of organic growth
- Acquisition normally requires alot of leverage
Just some of the points for local Singapore investors who are looking to invest in Lion Capital Asia Infrastructure,United Asia Pac Infrastructure and
I spent a little time this weekend looking for and learning about publicly traded toll roads (these tend to trade on foreign exchanges). This came about from the recent listing of the iShares Infrastructure Fund (IGF) which owns quite a few of them.
The appeal of these stocks is that they should have a low correlation to U.S. stocks, not be very volatile, have some yield and benefit from constant demand; the need to get somewhere.
The drawbacks seem to be low rates of organic growth, some of them have a lot of leverage and some of them do a lot of acquisitions, so the idea of one of the acquisitions going badly seems within the realm. What follows is a list from IGF’s holdings and the symbol (not all of them have symbols for U.S. trading) linked to Yahoo Finance.
Abertis ABE.MC in Spain or ABFOF on the pinks
Transurban TCL.AX Australia or TRAUF on the pinks
Brisa Auto Estradas BRS.LS in Portugal and BAUEF on the pinks
Cintra BCIN.MC in Spain or CCIDF on the pinks
Zhejiang Expressway 0576.HK in Hong Kong. ZHEXY might be the pink sheet symbol
Societe Des Autoroutes Paris (aka Paris Rhin Rhone) ARR.PA in Paris. No pink sheet symbol
Jiangsu Expressway 0177.HK in Hong Kong. JEXYY on the pinks
Autostrada AT.MI in Italy. AUOSF might be the pink sheet symbol
Treat all of the pink sheet symbols as best effort and any of them could be wrong. I would add that all of the various Macquarie (MIC) products traded around the world also have exposure but that can change at any time.
All of the companies have websites where you can learn more about them in addition to what might be on Yahoo Finance.
I bought one of the above personally with a 2% weighting. I have not decided about adding it for clients and so won’t disclose it so that I don’t front run what I might do for clients. Since there is no commentary about any of the names, just a mention that they exist, then I believe not disclosing the name is kosher.
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