T. Rowe Price has expanded its line-up of mutual funds by launching the Global Infrastructure Fund.
It seeks to provide long-term growth of capital by investing in the listed stocks of infrastructure-related companies around the world, including the US.
Individual investors can access the strategy through a no-load mutual fund or adviser class shares that are available through financial intermediaries.
Infrastructure-related companies derive at least 50 per cent of revenues or profits from the infrastructure industry or commit at least 50 per cent of assets to activities related to the infrastructure industry.
The mutual fund will usually invest in at least five countries and will normally offer significant exposure to emerging markets, where infrastructure development is prioritized.
By investing in 60 to 90 companies of all sizes in various regions, the Global Infrastructure Fund seeks to combine the growth opportunities of infrastructure companies with the defensive qualities of high dividend yielding stocks, such as utility companies.
The mutual fund may also offer a degree of protection against inflation through its holdings in companies whose cash flows are inflation linked. Historically, global infrastructure stocks have exhibited lower volatility than global equities in general and offer lower correlations than other equity asset classes, which may provide a diversification benefit to investors’ portfolios.
"We expect increased infrastructure spending over the long term around the world to offer significant, durable investment opportunities," says Susanta Mazumdar, portfolio manager of the Global Infrastructure Fund. "The investable universe in this sector is expanding, as developing markets build out infrastructure and developed markets grapple with decaying infrastructure. The unsustainable underinvestment in infrastructure we had seen for decades in developed markets, coupled with increasing modernization in emerging markets, has fuelled the availability of growth opportunities in this sector.”
Mazumdar, who has 17 years of investment experience, will manage the Global Infrastructure Fund from T. Rowe Price’s Singapore office.