Lonsec awards the RARE Infrastructure Income Fund a ‘Recommended’ rating

From

Focused solely on global listed infrastructure, and designed to help meet the income needs of an ageing population, the RARE Infrastructure Income Fund leverages RARE’s proven infrastructure expertise and long-term cash flow valuation approach to constructing a portfolio targeting a high dividend yield and low volatility characteristics.

The RARE Infrastructure Income Fund targets a portfolio yield of 5%pa (net of withholding tax) and a real total return of OECD G7 inflation+5.5%pa across an economic cycle. As at 31 March 2017, the Fund has rewarded Australian based clients 20.3% over one year and 13.2% over five years. The Fund currently has a forward dividend yield of 5.5% and expected DPS growth of 6.6% pa over the next five years.

“The Fund offers investors both income and real diversification from other asset classes”, commented Portfolio Manager Shane Hurst. “In the current environment, it can be tough for investors to generate an income with cash at record lows and uncertainty around the direction of traditional income allocations. Infrastructure companies’ earnings are typically underpinned by regulatory frameworks or long-term contractual agreements, making them ideally placed to provide investors with a source of attractive and stable dividend yields with some capital growth over time. The RARE Infrastructure Income Fund does not use derivatives to manufacture income and invests only in listed infrastructure securities from around the globe. RARE’s benchmark unaware approach to portfolio construction allows the investment committee the flexibility to manage the Fund through ever-changing macro environments.”

“Overseas demand for RARE’s Income Strategy has been strong,” said Matt Bushby, RARE’s Head of Global Distribution. “In particular, the demand from RARE’s UK based clients seeking a globally diverse, defensive, income orientated equity product has already attracted over AUD460million since launching in that market only nine months ago. We are seeing a growing level of interest from our Australian clients and believe it reflects the evolution of the asset class. Five years ago, financial advisers started to include global listed infrastructure as a core component of their client portfolios. Now those charged with portfolio construction are taking a more granular approach seeking to tailor specific investment outcomes to different types of infrastructure exposure which meet the needs of different types of investors.”

RARE’s two other global listed infrastructure strategies; the RARE Infrastructure Value Fund and the RARE Emerging Markets Fund have also been awarded a ‘Recommended’ rating from Lonsec Research.

The RARE Infrastructure Value Fund seeks to provide investors with regular and stable income, plus capital growth with a specific focus on minimising the volatility of returns. The Fund is available as a hedged or unhedged vehicle, and as at 31 March 2017, the hedged and unhedged product has rewarded Australian based clients 14.2% and 10.9% over one year and 11.9% pa and 13.6% pa over five years respectively.

Investing solely in Emerging Market Infrastructure, the RARE Emerging Markets Fund also seeks to provide investors with regular and stable income, plus capital growth with a specific focus on minimising the volatility of returns. The Fund delivered an exceptional Q1 result of 9.2% significantly outperforming the MSCI Emerging Markets Index and Emerging Market equity funds. Over a five-year period, the Fund has rewarded Australian based clients with 12.1% pa annualised return outperforming all of Emerging Market equity funds.

You must be logged in to post or view comments.