AMP Capital continues to experience strong interest in its infrastructure offerings from SMSF investors.
“Each year, we’re seeing more retail investors and financial advisers wanting to know more about infrastructure,” AMP Capital head of SMSF and self-directed wealth Tim Keegan said.
“SMSF trustees in particular want access to investments they can’t do themselves and infrastructure falls into that category, particularly for those looking for a defensive play.”
The investment manager gave several reasons as to why an allocation to infrastructure could be advantageous for SMSFs, one being access to solid and consistent returns.
It said infrastructure investments were able to produce those results due to their support of day-to-day essential services, which effectively shielded them from economic factors. This asset class often enjoys monopolistic market structures as well.
AMP Capital pointed out infrastructure developments also seemed to have an endless demand. This is the result of an ever-growing population requiring the likes of toll roads, as well as some ageing infrastructure assets needing periodic upgrading or replacing altogether.
In addition, the investment manager cited the ability to achieve income goals as a further reason SMSFs should consider investing in infrastructure. Assets in this investment category are often underpinned by long-term contracts with highly reputable counterparties that result in increased security of their future earnings.
AMP Capital Core Infrastructure Fund manager John Julian noted the benefits and suggested SMSF investors should be optimistic about future access to the asset class.
“Infrastructure offers a range of investment characteristics that can be particularly attractive in the low interest rate and volatile market conditions we have seen in recent times,” Julian said.
“Infrastructure is also becoming more accessible to retail investors. In the past, high-quality unlisted infrastructure assets were usually only available to large institutional investors, but now mums and dads can own their own piece of Melbourne Airport or UK rolling stock company Angel Trains.”
