This tortoise is no slouch – Ecofin Global Utilities and Infrastructure is to change its name to Tortoise Global Infrastructure (adopting the name of its manager and reflecting the AIC’s decision to change the name of the utilities sector to infrastructure securities).
This announcement coincides with the publication of its annual results for the year ended 30 September 2019. Over this period, the NAV total return was 27.4% and return to shareholders was 32.3%. In comparison, world equity markets (MSCI World Index) advanced a more modest 8.7%. The total return on the MSCI World Utilities Index was 29.3% and the S&P Global Infrastructure Index produced a total return of 21.4%.
Dividends for the year totalled 6.4p but the company is targeting 6.6p for next year (to be paid in equal quarterly instalments of 1.65p).
Extract from the manager’s report
“The holdings which provided the best contributions to NAV performance included NextEra Energy, Enel, Iberdrola, Terraform Power, RWE and Algonquin Power & Utilities – they were all amongst the highest conviction (i.e., largest) positions in the portfolio not least because they are strategically focussed on renewable energies and network infrastructure build-outs. Ferrovial, the Spanish infrastructure group and part-owner of Heathrow, also performed very well (+54%). Very few holdings saw their share prices decline and only EDF’s impact was noteworthy. EDF news-flow was gloomy and included project delays and cost over-runs but we expect that EDF’s impending internal restructuring – to be presented to the French government which owns 83.7% of the company – and France’s potential regulatory reform of nuclear energy could yet add value. During the year, we avoided the temptations of Centrica, PG&E (California’s largest utility, which filed for bankruptcy in January 2019) and infrastructure giant Atlantia (implicated, due to its toll road licenses, in the Genoa bridge collapse), and side-stepped the Spanish regulated names while retaining our confidence in Iberdrola, the Company’s largest European holding.”
[The name change makes sense and Tortoise Global Infrastructure is less of a mouthful than Ecofin Global Utilities and Infrastructure – the real attraction though is the return that the trust is generating – from launch (three years before) to end September 2019, NAV returns have been 43% and share price returns 62%. Sterling strength has held back returns recently but we are encouraged that the discount is narrowing and think the trust deserves to achieve a premium rating and expand.]
EGL : This tortoise is no slouch