Market review
Global listed infrastructure continued its strong performance in April driven by an Abenomics inspired rally in Japan, a chase for income-producing assets and a better-than-expected earnings season. The UBS Global Infrastructure & Utilities 50-50 Index increased 4.4% over the month in sterling terms, outperforming the MSCI World Index which gained 0.6%.
The best performing infrastructure sectors this month were Toll roads, Electric & gas utilities and Towers & Satellite. Toll roads increased due to better-than-expected profit results and Electric & gas utilities performed well on the back of higher energy prices and better-than-expected changes to the Japanese electricity market. The listed Satellites sector rose on the successful IPO of Intelsat which finished the month 12% above its issue price. Intelsat is a US-based owner and operator of over 50 satellites with a market capitalisation of US$2.1 billion.
The worst performing sectors were Energy storage, Ports and Railways. The Energy storage sector was dragged down by a weaker-than-expected 1Q result and earnings outlook from Vopak. The Port sector was held back by the weakness in Chinese and European port companies as mixed economic data acted to constrain volume growth.
The best performing regions for infrastructure this month were Japan and North America, while South America and Asia ex-Japan underperformed.
Fund review
The Fund rose by 3.3% over the month, 112 basis points behind the benchmark.
The best performing stock in the fund this month was Central Japan Railway driven by investors re-rating its property assets, solid traffic growth and anticipation of improved capital management. Our holding in East Japan Railway also performed well again in April.
Please click here to retrieve the full version of First State's monthly update on the Global listed infrastructure fund and the sector as a whole.
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