Conclusion
As mega forces power changes across the world, the world needs more infrastructure. Infrastructure impacts us all on a daily basis – from the roads we drive on to the energy we consume. As global listed infrastructure AUM grows, the asset class could play a role in portfolios for more types of investors, even those planning for retirement. Infrastructure’s long-term opportunity, diversification benefits, and strong inflation hedging characteristics, are all reasons why BlackRock expanded its LifePath Target Date Retirement funds in 2024 to include an allocation to publicly-listed infrastructure equity indices as part of their inflation hedging allocation.
Listed infrastructure remains a complex market, shaped by distinct regulatory frameworks, capital structures, and market dynamics that can create potential winners and losers. These pricing inefficiencies may create an opportunity for potential alpha generation by active managers. BlackRock’s Multi-Asset Income model portfolios recently reflected this view by introducing a position in iShares Infrastructure Active ETF (BILT).
For investors interested in active listed infrastructure exposure, BILT is managed by BlackRock’s Global Real Asset Securities team, which oversees $9.7B in AUM across infrastructure and related real assets strategies.10 Using proprietary analytics, the team seeks to identify mispriced infrastructure stocks and generate alpha, while minimizing unintended risk from factor, region, or sector tilts.
Investors interested in infrastructure exposure may consider a U.S. infrastructure ETF, which can provide access to both infrastructure owners & operators and infrastructure enablers, such as the iShares U.S. Infrastructure ETF (IFRA), or an ETF that can provide exposure to global companies focused on transportation, communications, water and electricity services, such as the iShares Global Infrastructure ETF (IGF).
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