Infrastructure in times of rising interest rates: what (not) to fear
September 22, 2022 10 Minute Read Time
This paper analyses the historic performance of listed and unlisted infrastructure assets against interest rates and other macro factors We find that in periods of below-average economic growth and high inflation, infrastructure performs better than general equities due to the defensive, inflation-linked nature of its cash flows. The diversity of infrastructure sub-sectors works to average out the sensitivity of the asset class to macro factors, including to today’s record-high commodity prices. This means that well-diversified portfolios stand a better chance of generating superior risk-adjusted returns.