Magellan Explains: Investing in Infrastructure


Global infrastructure are assets that provide essential services for the efficient function of a community. This includes assets such as transportation, energy & utilities, communications and social infrastructure businesses.


Magellan’s infrastructure universe is more strictly defined than standard benchmark indices, which we believe provides investors with a more defensive exposure to the infrastructure asset class.
We seek to limit our investment universe to stocks that we believe provide investors with predictable, through- the-economic-cycle, inflation-linked returns. Excluding stocks whose earnings are sensitive to competition, movements in commodity prices, and sovereign risk. This includes assets such as transportation, energy and utilities, communications, and social infrastructure businesses.

This means we remove power generation and power retailers, master limited partnerships, car parks and prisons.


Infrastructure assets exhibit unique characteristics, such as the ability to generate reliable cash flow and provide inflation protection, lower risk of capital loss and low correlations with other asset classes. Infrastructure in a diversified portfolio can enhance returns and reduce portfolio risk.

As investments, infrastructure stocks exhibit unique characteristics, including reliable cash generation, inflation protection, defensiveness in declining markets, and low correlations with other asset classes creating a compelling case to include the sector in a diversified portfolio.

Magellan believes that the infrastructure asset class is an essential inclusion in a diversified investment portfolio.

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