*as of 30th June 2020



+14.56% ten-year total return

-1.5% latest quarter return*

300

constituents

USD190bn

MArket Cap
The infra300tm Index -  The most representative view of unlisted infrastructure equity investment performance.

The infra300™ index is designed to track the different TICCS® segments of the unlisted infrastructure reference universe identified as the 25 national markets qualifying as 'principal' or most active markets (IFRS 13).

The index is equally weighted. Its coverage of each TICCS® pillar of the investable universe reflect the availability of data and the trade-off made to match each segment as accurately as possible while restricting the index to 300 constituents.

(Bloomberg ticker: infra300)

Access the Infra300 on our data & analytics portal

infra300tm Performance - 2020Q2

This quarter 1-year 3-year 5-year 10-year Inception
Total Returns -1.5 0.83 6.80 8.62 14.59 14.42
Excess Returns -1.52 0.47 6.20 8.01 13.62 11.78
Volatility - - 10.79 10.40 12.66 11.92
Sharpe Ratio - - 0.57 0.77 1.08 0.99
Value-at-Risk - - 18.12 17.77 20.33 18.17

Total returns include cash yield and price returns. Volatility is the standard deviation of total returns. The Sharpe Ratio is the ratio of excess returns to the standard deviation of returns. The Value-at-Risk is 99.5% Gaussian VaR. More metrics and analytics are available in the EDHECinfra data portal.

Q2 2020 Unlisted Infrastructure Index Release

This quarter 1-year 3-year 5-year 10-year Inception
Total Returns -1.5 0.83 6.80 8.62 14.59 14.42
Excess Returns -1.52 0.47 6.20 8.01 13.62 11.78
Volatility - - 10.79 10.40 12.66 11.92
Sharpe Ratio - - 0.57 0.77 1.08 0.99
Value-at-Risk - - 18.12 17.77 20.33 18.17

Q2 2020 Index Release Comment

The Q2 2020 release of the EDHECinfra indices marks a new quarter of negative returns for the unlisted infrastructure asset class.

The infra300 index is down -1.5% on the quarter ending 30 June 2020. This index measures the average mark-to-market performance of 300 unlisted infrastructure equity investments that make a representative sample by sector, corporate structure and business model of the investible universe in 22 countries.

The EDHECinfra Broadmarket Unlisted Equity Index (value weighted), which tracks the performance of more than 500 investments globally and is much more exposed to the kind of large infrastructure corporates that are the most impacted by the Covid-19 crisis is down -5.19% on the quarter, or -4.35% on a 12-month basis.

This performance reflects the evolution of the valuation fundamentals that influence the market value of unlisted infrastructure companies. The average equity risk premia increased again in Q2 2020 by about 20 basis points, but less than it had in Q1 2020 when the risk premia jumped by 90 to 100 basis points for the infra300 and the EDHECinfra broadmarket index, respectively. With interest rate curves mostly lower following the interventions of central banks, the average discount rate is in fact stable and some cases even slightly lower than in Q1 2020.

However, in aggregate, future dividends are also lower in numerous sectors. First the sectors directly impacted by Covid-19 lock-downs have seen expected revenues and dividend payouts continue to decrease since Q1 2020. Second, a number of private infrastructure companies in transport sector have received public sector bail-out, which requires dividend lock ups for several years to come. Finally, new infrastructure sectors are being affected by lower levels of economic activity that were not initially impacted by Covid-19, including network utilities and some power companies.

As a result, average valuations have decreased again in Q2 2020: for example the infra300 price-to-sales ratio, which stood at 2.33 in Q1, is now 2.17.

However, the picture is more mixed when considering different types of infrastructure investments and business models. in Q1 2020, the increase in risk premia was high enough to make all sectors experience negative returns, albeit limited for some. In Q2 2020, the average performance of Contracted infrastructure companies (TICCS®-BR1), which make up almost half of the market by number of investments, is still in positive territory and returns 2.5% over the past 12 months, despite Covid-19.

Conversely, the Airport Company Index (TICCS-IC6010) exhibits -4.23% quarterly returns in Q2 2020, while Merchant Road Companies (TICCS-BR2/IC6050) returns -8.03% on the quarter and -12.16% on a 12-month basis. It is important to note that while negative, Q2 quarterly returns in the transport sectors are less bad than in Q1 2020, suggesting that most of the loss of future income and current value has now been priced in.

On the private infrastructure debt side, the picture is quite different. Having increased a lot in Q1 2020, infrastructure corporate debt spreads have dropped to the 150-160 basis points range and project finance senior debt spreads barely moved at 171 basis points on average vs. 165 basis points in Q1 2020. Lower rates have pushed down the yield-to-maturity of infrastructure debt very close to 2% on average (2.43% for project finance debt). While we do see an increase in the average probability of default in 2020, levels of credit risk remain low, while the one-year ahead loss-given-default remains in the 15-20% range.

As a result, private infrastructure debt is performing well with a quarterly return of 2.54% (5.32% year-on-year) for the broadmarket private infrastructure debt index and 1.61% quarterly (7.24% year-on-year) for the Global Project Finance Debt Index.

Download the index factsheet: USD returns | Local currency returns  

To access 20 years of index data, analytics and constituent-level data register on indices.edhecinfra.com

Join us for a webinar on the impact of Covid-19 on unlisted infrastructure investment volatility on June 23rd at 10am GMT. Registrations here.

The infra300 is the new EDHECinfra flagship equity index and is available free of charge on the platform and through Bloomberg. Please note that from 2020-03-31 the EDHECinfra Broadmarket Indices (equity and debt) are only available to index data licence holders. For more information please contact sales@edhecinfra.com.

infra300tm TICCS® Coverage

The bar charts below show the TICCS® structure of the universe using average values for the 2015-2020 period, compared to the TICCS® coverage of the Infra300 Index (data as of 2020Q1). The universe size and structure follows the EDHECInfra Infrastructure Universe Standard and TICCS® taxonomy.
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EDHEC Research Insights

Six months of research in review, including peer group benchmarks and approaching ESG for infrastructure scientifically & TICCS® 2020.

Peer group Benchmarks

Who of large asset owners and large asset managers performs better than the market since 2010? Who has the best alpha? 

The characteristics of infra

An in-depth analysis of the cash flows and ratios of infrastructure firms  matched with comparable firms from other sectors. Is infrastructure different?

Towards Scientific ESG

Reporting standards follow a development pattern and ESG ones are only at the beginning in the infrastructure sector: can we have robust ESG criteria tomorrow? 

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