The paper will focus on the absolute performance of Global Listed Infrastructure and its relative performance to other asset classes during periods of rising interest rates, the impact of rising rates in the context of the asset class’ diversification and how the drivers of different interest rate components impact Global Listed Infrastructure and its sub-sectors.
The analysis is based on our knowledge of the Global Listed Infrastructure companies we analyse and invest in and incorporates previous work undertaken by the AMP Capital Macro team on the global economic outlook. This is a timely and relevant topic, given the performance of the asset class in the context of the recent increase in global sovereign yields, which has once again become a significant focus for investors.
- Financial markets usually overreact to increase in sovereign yields, as implied by short term price performance of Global Listed Infrastructure securities
- The impact of rising yields should be taken into the context of Global Listed Infrastructure’s diversification
- Differentiating between nominal and real yields is crucial to understand the impact of interest rates on Global Listed Infrastructure’s cash flow and valuation