In the first quarter of 2021, RARE Infrastructure will be changing its name to ClearBridge Investments Limited.

Portfolio Insights Income Strategy Q2

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In Q2 2020, what were the top drivers of recent investment returns?

Q2 saw the rebound of most sectors from the COVID-driven oversold levels seen during Q1.

Portfolio performance was strong in absolute terms, returning over 10% in local currency over the quarter, with all sectors and regions contributing to a positive return.

What is the current five-year forward-looking return, also known as the internal rate of return (IRR)?

We track the five-year forward-looking returns (IRR) of the portfolio over time, against the portfolio’s cost of equity.

While future performance cannot be guaranteed, as at 30 June 2020, the Income Strategy’s five-year annualised return was 11.6% p.a. 

Overall, we continue to position the portfolio with a bias towards more defensive utility assets which have a narrower range of return outcomes and visible cash flow profiles underpinning future dividends.

Overview of Contributors to Quarterly Performance

Top performing stocks for the quarter included American renewables companies Nextera Energy Partners, Clearway Energy and TerraForm Power, Australian toll road company Transurban and American electric company Dominion Energy.

Overview of Detractors from Quarterly Performance

Stocks which detracted from quarterly performance included Canadian electric company Emera, European communications company Eutelsat, United Kingdom water compnay United Utilities, American electric company Edison International and Sydney Airport in Australia.

For specific stock related insights on contributors and detractors from quarterly performance please click on the button below for the full article.

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Using a weighted average of the individual portfolio holdings, with the weights being each stock’s weight in the portfolio.
 

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