-
Erich Stock
- Business Development Manager responsible for Southern Europe and Country Head Italy
Portugal, Intermediary
ChangeWellington enduring assets fund
Infrastructure investments: this equity Fund invests globally in leading companies — in areas such as modern data and telecommunications networks, electricity and natural gas pipelines, but also road and rail links. Some of the companies may help drive the transformation towards a sustainable, greenhouse gas-free economy.
> USD 500 M
Fund size
2013
Fund inception
30–40
Holdings
Source for all figures: Wellington Management. Data as of 31 January 2022. The characteristics presented are sought during the portfolio management process. Actual experience may not reflect all of these characteristics, or may be outside of stated ranges.
- Hero
Seeking attractive returns through a defensive approach
The Fund aims to generate attractive returns over the long term and to provide a level of protection against inflation.
The objective is to select defensive companies with a strong stake in the sustainable infrastructure of the future.
Profile of our preferred infrastructure investments
1Although the Fund doesn’t have a specific sustainable investment objective, it aims to support certain environmental and social characteristics which are consistent with its investment objective. Full details are provided in the Fund’s Sustainable Investing Disclosure Document, provided below.
View our Sustainability-Related Disclosure
When can infrastructure help investors?
In our infrastructure investments, we seek companies that we believe are well positioned to keep the value of their assets and return profile in line with inflation: long-lived tangible assets are often indexed to inflation, with government concessions and contract terms spanning decades. Take, for example, modern power grids that also transport electricity from renewable sources.
Infrastructure investments include electricity and data networks, gas pipelines, water mains, and rail and road networks. Given that infrastructure remains essential in any market situation, we view the sector as more shock-resistant than many others. The Fund adopts a defensive approach, focusing on what we believe are particularly stable companies.
Portfolio Manager Thomas Levering favours companies with business models with high barriers to entry or “moats”. Many have monopoly-like market positions. They provide infrastructure that is indispensable even in crises and does not "go out of fashion", such as the owners and operators of power grids.
The Fund is Article 8 and takes sustainability into account during stock selection.2 We seek companies that are leaders in, or are transitioning towards, low-carbon infrastructure and renewable energy. In our view, these sustainable infrastructure companies could be more stable in value over the long-term, providing a more “future-proof” investment. We believe this is because sustainable infrastructure is aligned the ongoing to transition to a climate-neutral economy, as the world moves away from fossil fuels.
2The portfolio does not have a sustainable investment objective. At least 70% of the portfolio, excluding cash and cash equivalents, is invested in companies whose environmental practices are rated 1 3 on an internal rating scale of 1 - 5, with 1 being the highest rating.. Ratings are based on the asset manager’s own internal rating framework. While ESG factors are considered in allocating to individual companies, they do not necessarily lead to the exclusion of an issuer or security from the investment universe. Please refer to the sustainability-related disclosures for information on the commitments of the portfolio. A decision to invest should take into account all characteristics and objectives as described in the prospectus and the KIID.
What infrastructure does the fund invest in?
Electricity, natural gas and water networks
Renewable energy production
Natural gas pipelines
Road and rail networks, airports
Telecommunications
Data infrastructure
Specialist real estate
The characteristics presented are sought during the portfolio management process. Actual experience may not reflect all of these characteristics, or may be outside of stated ranges.
Which companies benefit from long-term trends?
The portfolio manager targets stable companies with healthy balance sheets that benefit from long-term trends. Areas of focus include:
In today’s digital age, we are increasingly connected, smart cities are emerging and the "Internet of Things" is growing, all requiring an expanded infrastructure for connectivity.
Example: Cellnex Telecom. The Fund invests in the leading European operator of wireless telecommunications infrastructure. Cellnex is a strong player in Spain, France, Italy and the Netherlands. The company has a portfolio of around 128,000 sites, either operating or in planning (as of June 2021).
Climate change moves people. Building the infrastructure to produce and supply electricity from renewable energies is vital to avoid this migration.
Example: China Longyuan Power. This Chinese company, which manages and operates wind turbines and is active in power generation and trading, benefits from the increasing energy demand of Chinese companies and the nation’s growing middle class.
The waning COVID crisis, an increased desire for mobility and the delivery boom associated with e-commerce all require an infrastructure to underpin sustainable road and rail transport.
Example: Canadian National Railway Company. The company maintains Canada's largest rail network and the only transcontinental network in North America. It serves 75% of the US population and all major Canadian markets (as of April 2022).
We believe regulated companies can provide greater stability and resilience in times of crisis. In addition, they offer potentially stable, attractive earnings and dividends.
Example: Exelon. The largest energy supplier in the US makes targeted investments in high-performance infrastructure. It supplies more than 10 million customers through six fully regulated transmission and distribution companies (as of June 2022).
The examples shown are presented for illustrative purposes only and are not to be viewed as representative of actual holdings. It should not be assumed that any client is invested in the (or a similar) examples, nor should it be assumed that an investment in the examples has been or will be profitable. Actual holdings will vary for each client and there is no guarantee that a particular client’s account will hold the examples presented. Please refer to the latest annual report for details of the Fund’s holdings.
Infrastructure investments: fund at a glance
| Wellington Enduring Assets Fund | |
| Fund Manager | Thomas Levering |
| Fund Inception Date | 31/05/2013 |
| Share Class Inception Date | 01/04/2019 |
| Fund size | USD 579 M |
| Fund type | Global Equity - Infrastructure |
| Reference benchmark index | MSCI All Country World3 Index |
| Currency | USD |
| Issue surcharge | 5.00% |
| Administration fee | 0.70% |
| Ongoing costs | 1.70 % |
| Sustainable Disclosure Classification | Article 8 SFDR |
| Share class | USD D AccU |
| ISIN | IE00BH3VJH87 |
As of 31.03.2022
The ongoing charges figure excludes Fund transaction costs, except in the case of depository fees and an entry/exit charge paid by the Fund when buying or selling shares in another collective investment undertaking. A more detailed description of the charges that apply to the Fund is set out in Charges and Expenses section in the Prospectus. The ongoing charges figure may change over time. Charges applied will reduce the return potential of investments. If an investor's own currency is different from the currency shown, costs could increase or decrease due to currency or exchange-rate fluctuations. 3Although the Fund is not constructed relative to a benchmark, the MSCI All Country World Index can serve as a proxy for the broad equity market and is shown for contextual purposes.
There are trillions of euros of investment to be made in the global power grid alone, including through the ongoing transition to renewable energy sources.
Summary: what differentiates the fund?
Flexible infrastructure investments in companies with stable business models and long-lived tangible assets that are a key part of economies’ infrastructure.
Seeks similar growth potential to global equities but with lower volatility.
Aims to achieve stable, predictable returns, even with inflationary pressure and rising commodity prices.
SFDR Article 8 fund integrating ESG considerations into investment decisions.
Read more about infrastructure investments
Infrastructure investments: access fund literature
Investing in next-generation infrastructure
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Risks
All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment.
- Hedging
- Manager
- Concentration
- Emerging Markets
- Small and mid-cap company
- Sustainability
- Equities
- Capital
- Currency
Please refer to PROSPECTUS for further risk factors.
The risk category shown is based on previous share class volatility, it is not guaranteed to remain unchanged and may shift over time. Even the lowest risk category 1 is not a risk free investment. For more information please read the Key Investor Information Document (KIID).
View Fund risks at this page
Sustainability-related disclosure
Although the Fund doesn’t have a specific sustainable investment objective, it aims to support certain environmental and social characteristics which are consistent with its investment objective. Full details are provided in the Fund’s Sustainable Investing Disclosure Document, provided below.
View our Sustainability-Related Disclosure
Key considerations
This portfolio holds equity securities. Equity markets are subject to many factors, including economic conditions, government regulations, market sentiment, local and international political events, and environmental and technological issues.
While we believe that the companies that we invest in will exhibit greater stability than the broad equity market and provide some degree of protection in falling markets, there is no guarantee as the portfolio‘s value could rise and fall in a similar as equity markets during times of market stress.
Managing the portfolio with an absolute return mindset does not mean that returns will be positive in every situation.
Adverse changes in regulatory policies could negatively impact the return of the companies we own.
While efforts are made to diversify the portfolio across sub-industry, region and regulator, sector and country weights (the amount of the portfolio invested in sectors and countries) are unconstrained, and the portfolio may be concentrated in specific sectors or regions at times given the nature of the universe we invest in.
The portfolio is relatively concentrated (30 – 40 stocks). Concentration of investments in a relatively small number of securities, sectors or industries, or geographical regions may significantly impact performance.
A strong US dollar can have a negative impact on the performance of the portfolio.
The Fund has flexibility to own up to 10% in the fixed income (bonds) of portfolio companies. While this would be a rare occurrence, there may be situations where we could potentially earn an equity-like return while reducing overall risk.
While the Fund has broader capabilities to hold cash, in most circumstances the level will be below 10% and typically below 5%.