Past performance has surely shown that global infrastructure stocks have offered plenty of upside for portfolios thus far. However, given that new macroeconomic challenges are emerging this year, it’s important to evaluate how well global infrastructure strategies are positioned to meet the moment.
To start, many of the previous factors working in favor of global infrastructure companies are still in place. Diversification remains as crucial as it was last year, and global infrastructure investments offer a broader opportunity set for both sector and geographic exposure.
Geographic and sector exposure aren’t the only baseline benefits that these companies bring to the table, either. As the chart below illustrates, these stocks also offer distinctly low correlation to more traditional investment vehicles, like bonds and the Mag 7.
Better yet, there are also long-term tailwinds that are continuing to work in favor of many global infrastructure companies. This includes the rising demand for AI adoption, which in turn requires stronger infrastructure to supplement electricity and data center operations.
When added to a portfolio, these funds can provide a steady blend of both income and long-term returns. This approach can help work as a steady ballast to smooth out one’s return profile, even if U.S. equities or the fixed income market enter a bout of volatility.
For those looking to amplify their global infrastructure exposure, the (BKGI ) may be able to help. An actively managed fund from the team at BNY Investments, BKGI provides its own distinct approach to gaining exposure to global infrastructure stocks.
This exposure focuses on investing in both traditional and non-traditional infrastructure assets. Traditionally, infrastructure companies engage in areas like utilities, energy, and roads, among others. However, BKGI’s portfolio team expands its scope to non-traditional infrastructure companies, like those in the communication services or health care sectors.
By expanding its sector exposure, BKGI can offer a wider opportunity set than other traditional infrastructure ETFs on the market. Of course, that opportunity set is further expanded upon due to BKGI investing in different companies across the globe, in lieu of focusing on any one particular country.
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