2024 Global Listed Infrastructure fall update

October 30, 2024
Emily Foshag, CFA
Portfolio Manager, Listed Infrastructure
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AT-A-GLANCE

  • Recent shifts in equity market leadership have begun to benefit infrastructure stocks.
  • Relative valuations and a favorable macroeconomic backdrop suggests outperformance has room to run.
  • Should downside risks to the economy materialize, listed infrastructure can also offer possible mitigation from sizable equity market drawdowns.
  • The long-term case for an active listed infrastructure allocation remains compelling

Recent shifts in equity market leadership have begun to benefit infrastructure stocks

While equity market dynamics to start 2024 largely mirrored what we saw in 2023, a combination of moderating inflation and weaker economic data ultimately catalyzed a market rotation into defensive equity sectors over the summer. In addition, the link between rising power demand and generative AI served to refocus the market on the many structural growth drivers benefitting listed infrastructure companies. The Federal Reserve’s decision to cut rates by a historic 50 bps at its September meeting drew a further line in the sand.

We believe the conditions that can lead to sustained outperformance of listed infrastructure are now underway.

For more of our thoughts on adding global listed infrastructure exposure to your portfolio, read our full perspective.

Listed Infrastructure
Disclosure

1As of September 30, 2024. Source: Principal Asset Management, eVestment. Principal Global Listed Infrastructure performance is represented by the strategy’s composite performance for 1 year, 3 years and 5 years ending September 30, 2024. Global Equity performance is represented by the average excess returns of the eVestment All Global equity category for 1 year, 3 years and 5 years ending September 30, 2024. eVestment provides excess returns by manager from those time frames, and then we calculate average excess returns using a simple average. eVestment collects excess returns relative to a manager’s preferred benchmark, and when no preferred benchmark is indicated excess returns are displayed relative to the default benchmark, MSCI All Country World Index. The comparisons provided above have been prepared as a guide and they are not intended to be exhaustive. Comparisons are based on the available information and Principal Global Investors disclaims any and all express or implied warranties of reliability or accuracy arising out of any for error or omission attributable to any third-party representation, example, or data provided herein.

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Investing involves risk, including possible loss of Principal. Past Performance does not guarantee future return. Infrastructure issuers may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, operational or other mishaps, tariffs and changes in tax laws, regulatory policies and accounting standards. Foreign securities involve special risks, including currency fluctuations, lower liquidity, political and economic uncertainties and differences in accounting standards. Some international securities may represent small and medium-sized companies, which may be more susceptible to price volatility and may be less liquid than larger companies. Equity investments involve greater risk, including heightened volatility, than fixed income investments. The strategy’s objective of downside risk reduction/protection may or may not be successful and as a result investors must be prepared to bear capital losses, including a loss of capital invested.

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