Market Research

Infrastructure in times of rising interest rates: what (not) to fear

September 22, 2022 10 Minute Read Time

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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.