The Fisher Funds Property & Infrastructure Fund aims to achieve positive returns over the long term. We sometimes refer to this fund as the “backbone” fund because the companies within the portfolio own assets which are the backbone of society such as airports, railroads, power companies, industrial buildings and power companies. This fund is invested in a handpicked portfolio of high quality companies.
This type of asset is appealing as they typically generate predictable and recurring revenue streams through the investment cycle. This is because they provide essential products or services.
Crown Castle International Corp |
|
| 5% Share Price Change | 0.60% Contribution to Return |
Norfolk Southern Corporation |
|
| 7% Share Price Change | 0.50% Contribution to Return |
American Tower Corporation |
|
| 1% Share Price Change | 0.30% Contribution to Return |
| Union Pacific Corporation | 7.0% |
| Crown Castle International Corp | 6.9% |
| American Tower Corporation | 6.2% |
| Cash | 7.3% |
In January the Property & Infrastructure Fund returned 2.6%, behind its benchmark of 3.3%.
Infratil (+7.5%) updated the market on the independent valuation of its investment in Canberra Data Centres (‘CDC’), which was revised significantly upwards by around $500 million as at December versus March 2019. We continue to like Infratil as a defensive exposure with several growth assets that have been under-appreciated by the market.
Auckland Airport (-1.1%) air traffic continues to be below-trend as Chinese passenger numbers are reducing, while key Australian and New Zealand passenger numbers are flat. This reflects cuts in airline capacity, softer trans-Tasman economic conditions than recent times, plus less growth in Chinese outbound travellers. Like everyone, we are actively monitoring the progress of the current Coronavirus outbreak both with concern for the health and wellbeing of our society, but also as a risk factor for the company in the near term. History suggests such events do not negatively impact airports in the long term. The fund’s other port and airport holdings also saw price declines.
The fund’s North American railroad holdings Union Pacific (-0.8%) and Norfolk Southern (+7.3%) announced encouraging fourth quarter 2019 results which saw only very modest reductions in earnings despite major volume reductions primarily relating to the trade war and flow on impacts. Both railroads’ Precision Scheduled Railroading (PSR) initiatives are delivering against expectations, which will drive strong earnings growth when we return to a more normal freight volume environment.
You can see the companies this Fund invests in below. Typically investments include airports, railroads power companies, cellphone tower networks and include Real Estate Investment Trusts (REIT’s).
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