Building your assets with infrastructure funds

Infrastructure funds are one of the less well-known types of investment, but they can offer options for those looking to diversify their portfolio.

Infrastructure funds offer investors the opportunity to put their money into funds for large physical assets, for example transport, energy, communications or commercial property.

These funds provide access to markets that are not closely linked to the values of most other bonds and shares, with less value fluctuations. They can also be attractive if you’re looking to generate an income from your investments.

Of course, like any investment, there is no guarantee that this income won’t be reduced or disappear altogether in certain circumstances.

How to invest in infrastructure

Individual investors have found it difficult to access infrastructure funds as direct investment into a power station or windfarm requires large capital sums. As such these funds have tended to be the preserve of professional investors, and large pension schemes.

In recent years, however a number of funds aimed at retail investors have been launched.  Some are UK-focused funds, others have a global remit.

Some pension funds and multi-asset funds will also have exposure to infrastructure assets, and it is important to check the extent to which you might already be exposed to this sector. You should only invest in regulated funds provided by some well-known investment providers.

The value of your investments, and the income from them, can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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