Income Strategy
Investor Outcomes
The RARE Infrastructure Income Strategy aims to provide investors with long-term inflation-linked capital growth over an economic cycle with a focus on providing reliable income. This is achieved by investing in a range of listed infrastructure securities across a number of infrastructure sub-sectors such as gas, electricity & water utilities, toll-roads, airports, ports, rail and communications spread across geographic regions in both the developed and emerging markets.
Key Portfolio Information
Growth of AUD $10,000
As at 31 May 2020 (returns in AUD)
| Performance | 1 Month | 3 Months | 1 Year | 3 Years | 5 Years | Inception4 |
|---|---|---|---|---|---|---|
| RARE Income Representative Mandate123 | 2.3% | -7.8% | 10.2% | 9.8% | 10.4% | 15.3% |
| OECD G7 Inflation Index + 5.5% pa | 0.6% | 1.7% | 7.5% | 7.3% | 7.1% | 7.1% |
| Excess Returns | 1.7% | -9.5% | 2.7% | 2.5% | 3.3% | 8.2% |
| S&P Global Infrastructure Index - Net Return AUD Unhedged | 3.8% | -13.9% | -5.8% | 2.4% | 3.9% | 8.6% |
| MSCI AC World Index - Net Return AUD | 2.9% | -2.9% | 10.0% | 9.3% | 8.3% | 11.8% |
| Top 10 Positions | Region | Sector | Weight % | Forward Dividend % |
|---|---|---|---|---|
| Red Electrica | Western Europe | Electric | 5.5% | 6.5% |
| Nextera Energy Partners | USA & Canada | Electric | 5.3% | 5.3% |
| Dominion Energy | USA & Canada | Electric | 4.5% | 4.6% |
| NRG Yield | USA & Canada | Electric | 4.2% | 4.8% |
| TerraForm Power | USA & Canada | Electric | 4.2% | 4.4% |
| Transurban | Asia Pacific Developed | Toll Roads | 4.1% | 2.4% |
| Snam | Western Europe | Gas | 3.8% | 6.0% |
| Emera Inc. | USA & Canada | Electric | 3.6% | 4.7% |
| Spark Infrastructure | Asia Pacific Developed | Electric | 3.6% | 6.4% |
| Energias de Portugal | Western Europe | Electric | 3.6% | 5.1% |
| Portfolio Weighted Average | May 2020 |
|---|---|
| Avg Market Capitalisation | 26.8bn (AUD) |
| RARE Div Yield (Forward) Gross | 5.1% |
| 5 Yr DPS Growth (p.a.) | 4.1% |
| Avg Stock Gearing (Net Debt/EV) | 43.5% |
| Interest Cover (Historic) | 4.3x |
| EV/EBITDA (Forward) | 11.9x |
Income Strategy commentary
Investment Committee
The RARE Income Strategy is managed by an experienced investment committee comprising of the following members:
Nick Langley
Shane Hurst
Charles Hamieh
Daniel Chu
Investing in the Income Strategy
Investors from Australia
Investors from outside Australia
Investors in other parts of the world, will be re-directed to Legg Mason who may offer this Strategy through various fund structures dependant on your location.
Institutional Investors
For institutional investors looking for opportunities to invest in global listed infrastructure; please contact us directly.
Scope for Enhanced Infrastructure Returns Amid COVID-19 Uncertainty
The premise of listed infrastructure investing is that while regulatory regimes and concession agreements are designed to produce outcomes over long periods of time, the majority of general equity investors have a shorter time horizon. This timing mismatch provides the opportunity for long-term investors to use liquidity to enhance infrastructure returns.
View full article More RARE InsightsDisclaimer
1. Source: RARE internal calculations for RARE Infrastructure Income Strategy. All index data sourced from Factset. Results over one year annualised.
2. Fund Performance is Gross of fees.
3. All values on an AUD basis and net of withholding taxes for benchmarks if applicable. Non AUD values converted into AUD using Factset Forex data.
4. Performance inception date for RARE Infrastructure Income Strategy is 31/10/2010.
Past performance is not indicative of future performance.
While the information contained on this website has been prepared with all reasonable care, RARE Infrastructure Limited (“RARE”) and its related companies accept no responsibility or liability for any errors, omissions or misstatements however caused. This information is not personal advice. This information has been prepared without taking account of your objectives, financial situation or needs. Potential investors should seek independent advice as to the suitability of the Funds to their investment needs. The fact that shares in a particular company may have been mentioned should not be interpreted as a recommendation to buy, sell or hold that stock.
Legg Mason Asset Management Australia Limited (AFSL No. 240 827) (“Legg Mason Australia”) is the Responsible Entity for the RARE Infrastructure Value Fund (Hedged), RARE Infrastructure Value Fund (Unhedged), RARE Infrastructure Income Fund and RARE Emerging Markets Fund. Applications to invest can only be made on the application form accompanying the most recent Fund Product Disclosure Statement (PDS) which is available on this website. Potential investors should consider the PDS and the Additional Information Booklet (AIB) before deciding whether to invest, or continue to invest in the Funds. The PDS and AIB can also be obtained by contacting RARE. Contact RARE on (02) 9397 7300, or by writing to Level 13, 35 Clarence Street, Sydney, NSW 2000, by fax on (02) 9397 7399 or email at clientservice@RAREinfrastructure.com. Legg Mason Australia can be contacted by writing to Legg Mason Australia, Level 47, 120 Collins Street, Melbourne, VIC 3000, by telephone on 1800 679 541 or by fax on (03) 9017 8690.
Any opinions or outlook contained on this website is subject to change without notice and do not constitute investment advice or recommendations.