Ecofin Global Utilities and Infrastructure (EGL) has shaken off turbulence from the Iran war with its shares trading in line with its investments for the first time in three years.
Half-year results to 31 March show the £250m investment trust has eradicated the discount to net asset value (NAV) at which it has stood since May 2023. A combination of the portfolio’s defensive investments and exposure to the artificial intelligence energy boom saw RWC fund manager Jean Hugues De Lamaze generate a 14.1% investment return in the six-month period, continuing the second half recovery of the previous financial year.
The shares returned 19.6% as the discount narrowed and subsequently disappeared after the half year. That enabled the company to issue new shares to satisfy investor demand for the 3%-yielder that has returned 55.9% in the past three years. The shares currently stand at 0.6% above NAV.
Our view
Matthew Read, senior analyst at QuotedData, said: “EGL’s interim results show that utilities and infrastructure can still offer more than defensive ballast. A 14.1% NAV total return and 19.6% share price total return over six months is a strong result, especially given the pressure from geopolitics and bond yields. Interestingly, the performance was broad-based, with UK and European regulated utilities, transport infrastructure and environmental services all contributing.
“EGL’s manager also appears to have used the trust structure well, taking profits after strong gains and cutting gearing as volatility picked up. The board’s capital management has been similarly useful, with buybacks at a discount followed by post-period issuance from treasury at a premium.
“EGL’s investment case remains compelling – electrification, data centres, reshoring and ageing infrastructure should support years of investment, while many portfolio companies still look modestly valued. The dividend increase helps, but the real attraction is the combination of visible earnings growth, essential assets and an asset class that still looks undervalued.”
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