Bringing you live news and features since 2006 

Covid-19 market volatility spurs demand for infrastructure, say financial intermediaries


A new study reveals that over half (54 per cent) of financial intermediaries believe that infrastructure is seeing the biggest surge in investor demand among all asset classes in response to the Covid-19 crisis, over twice the number who chose equities (20 per cent) and fixed income (19 per cent).According to the research, which was conducted among 112 intermediaries by Foresight Group (Foresight), an independent infrastructure and private equity manager, almost three-quarters (72 per cent) of intermediaries anticipate their clients’ exposure to infrastructure will increase over the next three years. 

Foresight’s study, which has been published as a white paper – “Stability in adversity” – highlights the three biggest drivers behind infrastructure’s growing popularity among financial intermediaries: its low correlation to traditional assets (73 per cent); defensive qualities (66 per cent); and low volatility (58 per cent). 

Financial intermediaries are turning to infrastructure to generate a sustainable income, according to the study. With total dividend payouts set to be the lowest since 20151, three-quarters (75 per cent) of intermediaries say they are likely to consider using infrastructure within their traditional equity income allocation to access sustainable income during the current economic uncertainty caused by Covid-19, including 24 per cent who say they are ‘extremely likely’.

Nearly half of respondents (47 per cent) say infrastructure is the asset class best-placed to produce a regular income during the current economic crisis caused by Covid-19, ahead of both equities (21 per cent) and fixed income (13 per cent).

The study follows the announcement of FP Foresight Global Real Infrastructure Fund’s first 12 months performance figures. The Fund achieved a total return of 18.51 per cent over 12 months, outperforming all competing indices over the period.  As well as this, the Fund provided a yield of 4.12 per cent over 12 months, exhibiting lower volatility levels than higher risk asset classes such as high-yield debt.

Nick Scullion, Head of Foresight Capital Management, says: “Advisers recognise that their clients’ portfolios will need to adapt to the new reality if their goals are to be met. They also appreciate the benefits that infrastructure can bring to portfolios in terms of providing stability in the face of market adversity.

“In a fast-changing and challenging environment, investors are increasingly looking towards ‘real’ physical assets to generate reliable, regular income and preserve capital values against inflation risks. Infrastructure is an asset class whose time has come, offering enduring solutions to today’s global challenges.”

Latest News

Franklin Templeton launches the firm’s first multi-asset ETF, Franklin Income Focus ETF, on NYSE Arca under the ticker INCM. INCM..
Digitial asset and fintech business Fineqia International has announced that its analysis of global ETPs with digital assets as underlying..
SESAMm, a provider of big data and artificial intelligence solutions for investment professionals, and Compass Financial Technologies, the Swiss-based independent..
Representatives of the European financial and insurance sector, AMICE, EACB, EAPB, EBF, EFAMA, ESBG, EUSIPA, Insurance Europe have commented on..

Related Articles

Ryan McCormack, Invesco
Invesco’s Nasdaq 100 ETF, QQQM, is enjoying quite the run of success in terms of asset inflows, with USD2.9 billion...
The European thematic fund market presents interesting opportunities for asset managers and ETF issuers, particularly in the passive sphere, according...
Stephanie Miller Pierce, BNY Mellon
The three-year anniversary of BNY Mellon Investment Management’s launch of ETFs was marked by the quarter one growth of 172...
South Korea Flag
The overall trend in retail subscriptions to mutual funds in Korea is shifting gradually toward ETFs, as exchange-traded offerings have...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by