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AMP Capital expects a broad and growing range of infrastructure investment opportunities over the long term, with an estimated US$57 trillion to be invested in global infrastructure by 20301.
The AMP Capital Global Infrastructure Securities Fund (Unhedged) and AMP Capital Global Infrastructure Securities Fund (Hedged) focus on infrastructure assets that have little sensitivity to GDP, are monopolies, or have long term contracts or very stable regulation.
These strong monopolistic qualities provide the infrastructure asset class with defensive characteristics and mean they are generally less volatile than other asset classes.
The AMP Capital Global Infrastructure Securities Fund (Hedged) focuses on providing investors with:
- The benefits of expected long-term global growth in infrastructure
- Attractive combination of capital growth and income in a low interest rate environment
- The option to hedge the Fund’s international investments back into Australian dollars.
1 McKinsey Global Institute, January 2013
"Global listed infrastructure is a young asset class with huge growth potential and strong return drivers."
Giuseppe Corona, Head of Global Listed Infrastructure
A fund built with these goals in mind
Regional and sector diversification means access to more opportunities
By investing in both developed and emerging markets across a range of sectors, investors can participate in the economic potential of emerging markets while benefiting from the stability of existing infrastructure in developed markets.
The Funds have a well-diversified exposure across the regions and sectors of core infrastructure. Whilst the Funds are focused primarily on the developed markets, in order to reduce risks, they can also access outstanding opportunities in the emerging markets.
Focus on delivering consistent cash flow
At least 90% of each Fund is invested in ‘core and pure’ infrastructure companies at all times. In our opinion, these companies show strong monopolistic characteristics with little or no competition, thereby offering more stable cash flows over time. Each Fund can invest up to 10% in companies that may not currently be considered 'core and pure', but where the team see these companies migrating to over time.
How does this fund fit into your portfolio?
The Funds are designed for investors seeking an investment which provides the potential for sustainable income and capital growth over the long term. They can be used to complement existing solutions in a blended portfolio or be used individually. When used with existing solutions, the Funds may fit within the growth component of an investor’s overall portfolio.
What are the risks?
All investments involve risk and you should consider investment risks before making an investment decision. The key risks of investing in the Funds include or are associated with:
- share market investments – adverse share market movements could result in capital losses, particularly over the shorter term
- infrastructure investments – factors affecting direct infrastructure assets (such as a company’s ability to service debt in a rising interest rate environment) may negatively affect the value of the relevant Funds’ investments
- international investments – the relative strength or weakness of the Australian dollar against other currencies will affect the Unhedged Fund’s performance and although the Hedged Fund’s international investments are principally hedged back to Australian dollars, the Hedged Fund could incur losses related to exchange rates or hedging
- derivatives – losses may be magnified where derivatives are used, and
- investment management – factors such as changes to the investment team may affect the relevant Fund’s performance.
The ‘Risks of investing’ section of the Incorporated Information incorporated into the Product Disclosure Statement for the relevant Fund provides further information about the risks noted above, as well as information about other investment risks of which you should be aware.
What opportunities does the Fund invest in?
American Tower Corporation
Dominant position: A leading independent owner, operator and developer of wireless and broadcast communications real estate.
Quality assets: a portfolio of over 143,000 communications sites, including approximately 40,000 towers in the United States and more than 102,000 towers internationally.
Strong earnings potential: Space on their towers is leased to telcos and broadcasters for periods of 10 years with no exposure to the amount of usage.
Kinder MorganThe business
Dominant position: KMI is one of the largest energy infrastructure company in North America. It owns an interest in or operate approximately 84,000 miles of pipelines and approximately 180 terminals. It is a high quality company with secured growth projects and no need to access capital markets.
Strong earnings potential: KMI’s cash flow is some of the highest quality in the midstream sector, with a large percentage derived from take or pay contracts. Combined with backlog high-grading efforts, there is no expected need to access capital markets to fund growth capital for the next two years.
What’s the difference between hedged and unhedged?
With AMP Capital Global Infrastructure Securities Fund (Unhedged) (Unhedged Fund), investors are exposed to fluctuations in the Australian dollar. This can be a good thing if the Australian dollar falls relative to the currency in the country where the investments are held. For example, if you were invested in an unhedged US share fund and the value of the Australian dollar decreased relative to the US dollar, the value of your portfolio would increase. This is because you would receive more for your investment if you converted it back into Australian dollars.
However, foreign exchange can also work the other way around. As the Australian dollar increases in value, the value of an unhedged overseas portfolio would decrease when converted back into Australian dollars.
With AMP Capital Global Infrastructure Securities Fund (Hedged) (Hedged Fund), we use strategies to offset the impact of currency moves. The objective is to ensure the only factor influencing the return from the portfolio is the income and capital gains (or losses) generated by the underlying investments, stripping out the impact of currency movements.
With a fully hedged portfolio, you may be protected from the adverse impact of a rising Australian dollar but forgo the benefit of a falling Australian dollar.
||To provide total returns (income and capital growth) after costs and before tax, above the Fund’s performance benchmark over the long term.
|Minimum suggested timeframe
||02 July 2010
||A$ 10,000 - Personal Investor/Off-platform Class H
|Risk level (1 - 7)
||Dow Jones Brookfield Global Infrastructure Net Accumulation Index Hedged AUD
The Fund's risk level is based on the estimated number of negative annual returns for the Fund over any 20 year period and is not a complete assessment of the risks of investing in the Fund. For instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than an investor may require to meet their objectives. Consequently, before choosing to invest or reinvest in the Fund, you should read the Fund's PDS and incorporated information and consider factors such as the likely investment return, the risks of investing and your investment time frame. Information about the methodology used for calculating the risk level is available here.
How to invest
The Lonsec Rating (assigned May 2016) presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445. The Rating is a “class service” (as defined in the Financial Advisers Act 2008 (NZ)) or is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). In New Zealand it must only be provided to “wholesale clients” (as defined in the Financial Advisers Act 2008 (NZ)). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold AMP Capital product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings methodology, please refer to www.lonsecresearch.com.au/research-solutions/our-ratings
The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned July 2017) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on Zenith's Product Assessment’s http://www.zenithpartners.com.au/RegulatoryGuidelines
AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMPCFM) is the responsible entity of the AMP Capital Global Infrastructure Securities Fund (Hedged) and the issuer of the units in the Fund. To invest in the Fund, investors will need to obtain the current Product Disclosure Statement (PDS) from AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232 497) (AMP Capital). The PDS contains important information about investing in the Fund and it is important that investors read the PDS before making a decision about whether to acquire, or continue to hold or dispose of units in the Fund. Neither AMP Capital, AMPCFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this information. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this information, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This content has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of this information, and seek professional advice, having regard to their objectives, financial situation and needs.