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Investment Trust Insider on Ecofin and Premier utilities and infrastructure funds

14
2018
May

Investment Trust Insider on Ecofin and Premier utilities and infrastructure funds

James Carthew: knee-jerk rejection of utilities is wrong

The lines between utilities and infrastructure have been blurred somewhat. The two investment companies that sit in the utilities sector, Ecofin Global Utilities and Infrastructure (EGL) and Premier Global Infrastructure (PGIT), have (as their names suggest) made significant allocations to infrastructure investments. By contrast, 3i Infrastructure (3IN) had 60% of its portfolio invested in utilities companies at the end of September, prior to its sales of Elenia and Anglian Water, but is classified as an infrastructure fund.

In recent years, with low income yields from all the traditional asset classes of equities, bonds and cash, talk is of ‘alternative’ sources of income. Some of these are highly complicated, esoteric and vulnerable to risks that are not present in traditional asset classes. So, why, when complexity is not necessarily desirable, are the relatively straightforward areas of utilities and infrastructure out of favour? These deliver high, relatively predictable, and often inflation-linked and government-backed income.

I would make some observations, however….    read more here

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