Michael Zagari

Associate Portfolio Manager

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Investing in Global Infrastructure - Stability, Growth, and Diversification

Global Infrastructure as an Investment

Global infrastructure represents the physical and organizational structures necessary for the operation of a society, including transportation networks, energy systems, water supply, telecommunications, and more. As an investment, global infrastructure offers a unique mix of steady cash flow, potential for growth, and portfolio diversification.

Lowering Overall Risks in Your Portfolio

Incorporating global infrastructure into your investment portfolio can help mitigate overall risk:

  1. Stable Cash Flows: Infrastructure assets often provide essential services, leading to steady demand and predictable, long-term cash flows. This stability can help cushion your portfolio against market volatility.
  2. Inflation Protection: Infrastructure investments often include contracts that allow for price increases in line with inflation, providing an effective hedge against rising prices.
  3. Diversification: Infrastructure returns are generally less correlated with traditional asset classes, such as stocks and bonds. This means they can provide a source of return even during periods of underperformance in other markets, adding a layer of diversification to your portfolio.

Future Benefits of Global Infrastructure Investment

Investing in global infrastructure also comes with significant potential benefits:

  1. Growth Potential: With a growing global population and increasing urbanization, the demand for infrastructure is expected to rise. Investment in this sector is thus poised for potential growth.
  2. Sustainable Development: Infrastructure investments play a key role in sustainable development. Investments in renewable energy, water treatment, and sustainable transport can contribute to global sustainability goals while generating returns.
  3. Resilience in Economic Downturns: Infrastructure assets, given their essential nature, often demonstrate resilience during economic downturns. This resilience can provide downside protection for your portfolio during challenging market conditions.
  4. Impact Investing: Through infrastructure investment, you can have a tangible impact on communities, improving quality of life, promoting economic development, and supporting environmental sustainability.

Investing in global infrastructure offers a compelling mix of risk mitigation, return potential, and diversification benefits. As the world continues to grapple with a growing population, urbanization, and the need for sustainable development, the value of infrastructure investments is poised to grow. It’s an investment opportunity that allows you to bolster your portfolio, hedge against inflation, and contribute positively to the world’s future.

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Disclaimer:

Nothing on the website shall be construed as an offer to buy or a solicitation of an offer to buy any services or products. Commissions, trailing commissions, management fees and expenses may be associated with investments. Products are not guaranteed, their values change frequently, and past performance may not be repeated. Mandeville Private Client Inc. is a member of the Investment Industry Regulatory Organization of Canada and a member of the Canadian Investor Protection Fund.

This publication contains the opinion of the writer. The information contained herein was obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made by the writer, Mandeville, or any other person as to its accuracy, completeness, or correctness. This publication is not an offer to sell or a solicitation of an offer to buy any securities. The information in this publication is intended for informational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice.

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