Real estate

Global listed infrastructure

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Diversifying with listed infrastructure3:19 minView transcript

Listed infrastructure may offer several compelling benefits to a portfolio

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Compelling total returns with potential inflation protection

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Adds multiple diversification benefits in an investor's portfolio

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Offers targeted exposure to ESG and sustainability leaders

  • Historically compelling risk-adjusted returns relative to global equities1
  • Long-term trend of durable and rising income and attractive yield1
  • Potentially resilient returns through periods of higher inflation2
  • Complementary to private infrastructure allocations
  • A targeted allocation to listed infrastructure may support positive sustainability outcomes for clients
  • Offers liquid access to a subset of real assets, which have intrinsic value backed by hard assets and highly visible cash flows
  • Infrastructure companies are well-positioned to contribute to the United Nations’ Sustainable Development Goals (UN SDGs)

Driving significant opportunity and demand

The asset class is benefiting from global long-term secular themes:

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Decarbonization

  • Infrastructure has a critical role to play in combating climate change
  • More than 70 countries have set a net zero target, which requires tremendous investment in renewables, electricity networks, hydrogen, and biofuels, among other areas3
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Demographics

  • With continued world population growth, there’s increased demand for new & upgraded infrastructure
  • Rising per capita income creates new demand for everything from energy to transportation
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Digitalization

  • Unprecedented increase in global data and technology usage drives demand for infrastructure to support4
  • Modernization of the electric grid can support reduced energy consumption

Investing with Principal listed infrastructure

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Disciplined stock selection process

  • Focus on companies of above average quality trading at compelling relative valuations
  • Standardized Quality and Valuation frameworks
  • Robust data management efforts
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Purposeful portfolio construction

  • Explicit active weight guidelines
  • Actively limit factor and style biases
  • Equal weight bias in sizing of active positions
  • Seeking excess returns primarily from stock selection, with a focus on delivering a strong information ratio over time
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Differentiated approach to ESG and sustainability

  • Proprietary ESG ratings and SDG alignment frameworks
  • Emphasis on engagement and driving real world outcomes
  • Enhanced by team expertise and commitment to D&I
  • ESG focus that seeks to enhance risk-adjusted returns
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Leveraging time-tested investment philosophies

  • Core investment philosophies are consistent with REITs capability
  • Rely on a dedicated team of sector specialists
  • Quality bias, bottom-up focus, and active weight guidelines feature heavily in both strategies

Available products

  • UCITS fund
  • Separate account

Resources

We can help

Reach out to a Principal Asset Management representative today for more information.

BUILD YOUR PERSPECTIVE

Thought capital & latest insights

Find out how listed infrastructure represents a unique opportunity for long-term investors to allocate capital at the intersection of social, environmental, and economic progress.

Listed infrastructure: A timely complement to unlisted infrastructure

Listed infrastructure makes an increasingly relevant complement to unlisted infrastructure exposure, and could be an advantage in certain market environments.

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How listed infrastructure is contributing to the decarbonisation of air travel

Three ways listed aviation infrastructure in Europe is quietly contributing to the sustainable development of the wider air travel industry.

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Listed infrastructure: A strategy for navigating an inflationary environment

In the current inflationary environment, we believe listed infrastructure has an important role to play.

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Listed infrastructure: Realizing the potential for sustainable impact

Listed infrastructure businesses are uniquely positioned at the intersection of environmental, social, and economic progress.

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Citations

1 As of 31 March 2023. Source: FactSet. Global equities is represented by MSCI All Country World Index. Global listed Infrastructure is represented by a 50/50 blend of MSCI ACWI Utilities Index and the Alerian MLP Index through 31 March 2015, and the FTSE Global Core Infrastructure 50/50 Index thereafter.

2 As of 31 December 2022. Source: U.S. Bureau of Labor Statistics, CPI ex-food & energy, FactSet. Inflation and other economic cycles and conditions are difficult to predict and there is no guarantee that any inflation mitigation/protection strategy will be successful.

3 Source: United Nations, 2022, www.un.org.

4 Source: IDC Data Age 2025 study. Data growth is expected to reach 175 zettabytes (zb) by 2025, up from 33 zbin 2018.
Disclosure

Past performance does not guarantee future results.

Infrastructure issuers may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, operational or other mishaps, tariffs, and changes in tax laws, regulatory policies, and accounting standards. Foreign securities involve special risks, including currency fluctuation and lower liquidity. Some global securities may represent small and medium-sized companies, which may be more susceptible to price volatility than larger companies.

ESG integration is considered across all actively managed asset classes, with the approach determined by each investment group's process. This information is specific to the strategies managed by the individuals providing this content and various investment teams across Principal may have differing views of this approach.

ESG criteria may present additional advantages or risks and does not protect against market risks or volatility. You should not make any investment assumptions based solely on the information contained herein. There is no assurance that any ESG component in our investing strategy will be successful.

Principal Real Estate is a trade name of Principal Real Estate Investors, LLC, an affiliate of Principal Global Investors.

FTSE Global Core Infrastructure 50/50 Index
Index Launch date is 2 March 2015
Base Date is 31 December 2009
Base Value is 1000
History is available from December 2005

Some index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index. All back-tested index values for periods prior to the launch date of an index are merely indicative, and they are provided "AS IS" for informational and educational purposes only. There is no guarantee as to the accuracy, timeliness, completeness, or fitness for any particular purpose of or for any index values, either historical or back tested. Nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Past performance is not indicative of future results.

Model, back tested or simulated performance presented for the index mentioned are for illustrative purposes and are provided solely for conceptual discussion. Results from any live implementation of a strategy discussed would be reduced by fees charged against an account. Model, back tested, or simulated performance is no guarantee of future results in a live portfolio using the strategy. The hypothetical back tested performance used in this presentation may differ from live performance experienced using the same strategies for a variety of reasons such as: The back testing assumes that the guidelines are constant, whereas, the guidelines for live portfolios may change over the life of each portfolio; the index back testing assumes zero transaction cost whereas live portfolio transaction costs will be variable; dependent on market conditions such as liquidity and portfolio size, the types of instruments traded within the simulation may not have been permissible in a live portfolio; etc.

MM12912-01 | 06/2023 | 2938949-062024