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.
|Charter Hall Social Infrastructure Reit||6.3%|
|Crown Castle International Corp||6.2%|
|-10% Share Price Change||-0.6% Contribution to Return|
|9% Share Price Change||0.5% Contribution to Return|
Contact Energy Limited
|11% Share Price Change||0.4% Contribution to Return|
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).
The Property & Infrastructure Fund returned-0.1% in October, underperforming its benchmark which returned +0.4%.
Infratil (+9%) held an investor day focused on its Canberra Data Centres (CDC) and Vodafone New Zealand investments. CDC provided increased capacity guidance, reflecting ongoing acceleration in data usage. On the flipside, Vodafone expects COVID-19 to negatively impact FY21 earnings by $60-75m, due to lower roaming and prepaid revenue. During the month Infratil announced the acquisition of Qscan, a diagnostic imaging business in Australia. It is early days but we like the fact the diagnostic imaging market is growing +5-7% and Qscan’s focus on higher-value services.
Disappointingly, Union Pacific (-10%) COO and Precision Scheduled Railroading (PSR) disciple Jim Vena announced he is moving to an advisory role. He has been at the railroad now for almost 2 years and sown the PSR seeds. The railroad remains committed to its 55% operating ratio target (operating costs divided by revenues) versus the current ratio of around 59%. It is worth noting that competitor CSX has continued to make progress lowering its operating ratio primarily via PSR following the passing of the PSR king Hunter Harrison, despite concerns progress would stall.
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