We have added FTF ClearBridge Global Infrastructure Income fund to our Recommended list.

Fund Snapshot

A specialist global equity fund dedicated to investing in companies with high quality infrastructure assets, with a view to delivering a sustainable level of income and capital growth.  The performance objective is to deliver a return above inflation on a 5-year view, with income being an important component of the total return.

Fund Description – Key Points

• The fund is run by the ClearBridge Global Infrastructure Income team, which is based in Sydney.  Clearbridge is a specialist investment manager of Franklin Resources, Inc.  The fund is managed by four portfolio managers, Daniel Chu, Charles Hamieh, Shane Hurst and Nick Langley, who also comprise the Investment Committee.
• The approach has its roots in the RARE Infrastructure business, which was established in 2006 and integrated with ClearBridge in 2019.
• The fund aims to provide investors with a reliable income and a total return that outpaces OECD G7 inflation over a rolling five-year period.  In practice, the team aims to deliver an outcome consistent with OECD G7 inflation (CPI) + 5.5% (gross of fees), with income being an important component of the total return.
• By seeking to deliver an income in excess of G7 inflation, the team makes a clear statement about their desire to deliver positive real returns without being beholden to a reference index.
• The team invests in a range of listed infrastructure securities across different sub-sectors, achieving diversification through geography, as well as by exposure to different cash flow drivers (regulated/user pays) and macro, regulatory and political regimes.

Characteristics and Utility

• The fund is not managed with any benchmark in mind.  The focus is upon providing a return ahead of inflation over the medium term.
• Infrastructure is regarded as a less risky asset class compared to property and equities because the assets provide an essential service to the community.  These defensive characteristics are reinforced by the team’s emphasis on the quality and visibility of earnings, combined with a focus on income streams.
• Investors can expect the strategy to fare relatively well during times of risk aversion, when more conservative investments are typically in vogue.  Although there is some scope to tilt the portfolio in response to improving/strong economic circumstances, it is unlikely to participate fully when equity markets are buoyant or when momentum is fuelling share prices in certain sectors.
• Given the fund’s innate interest rate sensitivity, performance can be susceptible to related market moves.  Furthermore, political/regulatory regimes can have a meaningful impact on the asset class.
• The fund’s exposure to companies that can link their earnings to inflation means it is well positioned to deliver a stable and growing distribution yield over time. However, while the team aims for a yield of around 5%, it is important to note that this can vary according to prevailing conditions, portfolio composition and currency moves.
• Given the fund’s specialist nature, it can be deployed as a more defensive equity allocation and/or a source of income within a portfolio.

To view our full factsheet, please visit the fund page on our website.