On the Economics of Listed Infrastructure Returns

Abstract

In this study, we provide a framework of economic drivers of the returns of listed communication-, energy-, transportation- and utility infrastructure. Using five decades of U.S. data, we find important relations between macroeconomic indicators and infrastructure sector performance. The analysis has significant implications for infrastructure investors in portfolio construction exercises. Investors seeking exposure to GDP should invest in transport, those investing in energy assets will be exposed to energy spot price volatility, while utilities investors are most exposed to interest rate risk.