Attractive valuations, an advantageous macro environment and high private investor interest set the stage for potentially strong total returns from listed infrastructure.
1. Current infrastructure valuations are attractive relative to global equities
Valuations are currently uniquely attractive. Infrastructure trades at a rare discount to global equities and at a steep markdown to its historical enterprise multiple.
Infrastructure is currently trading at a discount to global equities(1)(2)
December 2010 – March 2025
2. We believe we are entering a macro environment that favors infrastructure
Infrastructure has historically been a relative outperformer in periods of slower-than- expected growth and greater-than-expected inflation. With the global economy shifting into a lower gear and amid a more- dovish environment for interest rates, infrastructure’s appeal is compelling.
Relative real return by category vs. long-term average (%, 1991–2024)
There is no guarantee that any market forecast will be realized. Real return is the rate of return adjusted for inflation.
Top Exhibit at March 31, 2025. Bottom Exhibit at December 31, 2024. Source: MSCI, FTSE, FactSet, Cohen & Steers.
Past performance is no guarantee of future results. The information presented above does not reflect the performance of any fund or account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend might begin
3. Key megatrends are driving infrastructure growth
We see three key megatrends consisting of digitalization, decarbonization and deglobalization that act as supportive, fundamental tailwinds for global listed infrastructure. These megatrends have direct impacts across the Cohen & Steers listed infrastructure universe.
At March 31, 2025. Source: Cohen & Steers.
Past performance is no guarantee of future results. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. The information presented above does not represent the performance of any fund or other account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance listed above.
FURTHER READING
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Allocations to both listed and private infrastructure can provide increased diversification, liquidity and enhanced performance
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(1) EV/EBITDA is the ratio of enterprise value to earnings before interest, taxes, depreciation, and amortization using current fiscal year estimates. Spread refers to the relative difference of EV/EBITDA multiples between infrastructure and global equities. Infrastructure represented by the UBS Global 50/50 Infrastructure & Utilities index until 3/31/15 and the FTSE Global Core Infrastructure 50/50 Index thereafter. Global Equities represented by the MSCI World Index. (2) Average represents historical average based on monthly data starting December 31, 2010, ending as of the most recent month end data available. This material represents an assessment of the market environment at a specific point in time and should not be relied upon as investment advice, does not constitute a recommendation to buy or sell a security or other investment and is not intended to predict or depict performance of any investment. This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or take into account the specific objectives or circumstances of any investor. We consider the information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment. Please consult with your investment, tax or legal professional regarding your individual circumstances prior to investing. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. Index comparisons have limitations as volatility and other characteristics may differ from a particular investment.
Risks of Investing in global infrastructure securities. Infrastructure issuers may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, operational or other mishaps, tariffs, and changes in tax laws, regulatory policies, and accounting standards. Foreign securities involve special risks, including currency fluctuation and lower liquidity. Some global securities may represent small and medium-sized companies, which may be more susceptible to price volatility than larger companies. No representation or warranty is made as to the efficacy of any particular strategy or fund or to the actual returns that may be achieved.
No representation or warranty is made as to the efficacy of any particular strategy or fund or the actual returns that may be achieved.
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