Global listed infrastructure as an asset class can be used to achieve many different investing objectives for SMSF trustees, according to an international portfolio manager.
“My parents run their own superannuation fund and they utilise global listed infrastructure partly as a substitute for REIT (real estate investment trust) investments because it is similar in terms of risk characteristics,” Lazard Asset Management portfolio manager Warryn Robertson told selfmanagedsuper.
“But in terms of the monopolistic characteristics and in terms of natural pricing power and natural stability of demand, infrastructure is a less risky alternative than property.
“So from that risk return perspective it stands up well.”
Robertson pointed out investing in global listed infrastructure could also help SMSF members increase their exposure to international equities, a common theme currently influencing SMSF portfolios.
“Investing in global listed infrastructure can work for SMSF members who want exposure to global equities,” he said.
“The assets that we own in our portfolio have very predictable operating streams, so they’re naturally more stable businesses and we’re trying to buy them at a discount, so we’re matching the operating stability with what we think is investment stability.”
An allocation to a global infrastructure fund allows SMSF investors access to shares in international companies, such as Germany’s Frankfurt Airport, which is one of Lazard’s favoured organisations.
Robertson said global infrastructure could also play a role for SMSF trustees who wanted yield and a consistent income stream.
“We tell investors what you should be thinking about for our fund is to achieve a return of inflation plus 5 per cent over a five-year period,” he said.
He said investing in global listed infrastructure through Lazard for yield had become even more attractive since 1 July as the dividends they received through their holdings would now be paid out to unitholders on a quarterly basis, a procedure that was not able to be performed until now due to accounting treatment restrictions.''