In recent years, Chinese people have set off a wave of saving stocks, and high dividend stocks are particularly favored. Especially now that the inflation storm is hitting, the money is getting thinner and thinner, and the stocks with stable interest income and resilience are particularly attractive. Among them, infrastructure concept stocks have four major advantages, such as low volatility, stable cash flow, defense against inflation, and diversification of investment. They have become popular in the market and continue to attract capital influx.
There are also high-quality deposit targets in overseas markets
Taiwanese love to save stocks. In addition to Taiwan stocks, overseas high-quality high-dividend stocks can also be used as stock targets! How to choose? There are two principles to stick to: a long-term stable company and a stable dividend yield. Screened by this standard, all infrastructure concept stocks are eligible, and they have become the assets that legal persons most want to overweight under the multiple unfavorable factors such as high inflation, interest rate hike cycle, and economic slowdown.
The reason is that infrastructure stocks have 4 major advantages. First, stable income: The scope of infrastructure construction covers a wide range, from building hospitals, schools, laying water, electricity and gas pipelines, and building railways, highways, ports, airports, communication bases, retail logistics centers, etc. Infrastructure, etc., are all within its scope. Due to relatively stable terminal demand, or due to factors such as legal regulations or long-term contracts, infrastructure companies have high cash flow and capital stability, and long-term dividend income is more predictable. Therefore, infrastructure stocks can be said to be high dividends, and the average dividend yield can outperform the broader market. According to Bloomberg data, the earnings per share of infrastructure stocks have grown year by year, and since 2007, the average dividend rate of the infrastructure stock index has been 3.75%, which is better than that of the global stock market (2.39%).
The second is to defend against inflation: the high inflation storm hits, and the theme of anti-inflation has become the focus of the market, which is the unique advantage of infrastructure stocks. Because most infrastructure assets can pass on inflation risks to end users through regulations, franchise agreements, or contracts, they are considered inflation-defense assets. For example, Transurban, an Australian toll road operator, adjusts tolls on Sydney’s Westlink M7 on a quarterly basis in line with inflation. In addition, according to historical experience, when the inflation expectation implied by the US anti-inflation bond is higher than 1.5%, the average monthly increase of the S&P Global Infrastructure Index exceeds 1%. When the inflation expectation is higher than 2.5%, the basic The average monthly increase in the construction index was 1.78%.
The third is low volatility and low-level protection: infrastructure provides essential services such as water, electricity, gas, transportation, and energy. The demand is relatively stable, and it is less affected by the fluctuation of the economic cycle. Therefore, during the various economic cycles, the volatility of infrastructure stocks It will be lower than traditional stocks, and it has the stable characteristics of following the rise and resisting the fall. Barring a severe economic contraction, the average monthly return of infrastructure stocks can remain positive, whether the economy is expanding, slowing or shrinking slightly. Even in the face of a sharp correction in the stock market, infrastructure stocks are relatively resistant to decline. For example, the global stock market began to fluctuate and fell after hitting a high on 11/16 last year, and has fallen by more than 21% so far. However, infrastructure stocks are still able to pay The performance is very impressive.
The fourth is investment diversification: the profits of infrastructure assets are mostly related to legal regulations or contract structures, and have low correlation with traditional stock and debt assets. Incorporating them into investment portfolios can help spread risks and even increase returns.
Infrastructure fund Legg Mason Kelly is the most outstanding performer
However, overseas stock selection is difficult, how to deploy overseas infrastructure stocks? You might as well use the method of depositing funds to invest in the funds of global listed infrastructure companies to participate in the development of global infrastructure with a small amount of capital without worrying about liquidity issues.
At present, there are many infrastructure funds to choose from in China. Among them, the Mason Kelly Infrastructure Value Fund is the most eye-catching. This fund has been awarded 4 Earth Ratings (up to 5) by Morningstar Sustainable Investment and MSCI ESG. AA rating (the highest AAA), and the annualized dividend rate of more than 3%, whether it is short-term, medium-term or long-term performance, the return rate can also be better than similar funds. From a long-term perspective, the regular and fixed remuneration is also very stable, with 1-year, 3-year, and 5-year returns of 11.79%, 22.83%, and 31.77%, respectively.
In addition, the performance of the Legg Mason Kelly Infrastructure Value Fund is based on the inflation rate of the seven major industrialized countries of the OECD, plus 5.5% as a performance indicator. Observing its long-term return rate performance, it can also be better than this indicator, indicating that this fund is a good fund. Anti-inflation financial products, this is also its biggest feature, so it is favored by legal persons and general investors.
This fund manager team has been investing in global infrastructure stocks since 2006, and has rich investment experience. Each manager has their own expertise in the field of infrastructure, including experience in mergers and acquisitions and unlisted infrastructure, debt financing and equity financing, government supervision, etc. .
In terms of fund layout, Legg Mason Kelly Infrastructure Value Fund is mainly based on the European and American markets. In addition to traditional utilities such as hydropower, gas, railways, highways, airports, ports and other long-term stable profits, it also includes the most promising emerging industries. building. For example, in order to reach the net zero emission target, Goldman Sachs Securities estimates that the annual green capital expenditure in the 2020s will reach 6 trillion US dollars, much higher than the average annual level of 3.2 trillion US dollars in 2016-2020, which will be the main growth of the global infrastructure industry. driving force. Therefore, this fund has also deployed emerging trend industries such as energy infrastructure, renewable energy, and communications, accounting for more than 20%, taking into account the business opportunities of “defense, growth and trend”.
As there are still many market variables, including high inflation, interest rate hikes, the Russian-Ukrainian war, economic slowdown, etc., the stock market is likely to continue to fluctuate violently. Therefore, at this stage, the first priority to choose the target is stable performance. The infrastructure construction has the advantages of resisting the economic cycle, inflation pass-through mechanism, high dividends, relatively cheap evaluation, and the blessing of energy transition policies. Investment needs for dividends. In addition, green capital spending will push the infrastructure industry to officially launch a long-term long term. Compared with the previous wave of the digital revolution in technology stocks and the bull market in commodities, the rally in infrastructure stocks is still in the early stage, and investors can actively enter the market at this time. bit.
Learn more: https://event.franklin.com.tw/infrastructure-value-fund/index.html
Learn more about Legg Mason Kelly Infrastructure Value Fund
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