Magellan Infrastructure (Unhedged) is an Managed Funds investment product that is benchmarked against Global Infrastructure Index and sits inside the Property - Global Listed Infrastructure Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Magellan Infrastructure (Unhedged) has Assets Under Management of 1.02 BN with a management fee of 1.05%, a performance fee of 10.00% and a buy/sell spread fee of 0.3%.
The recent investment performance of the investment product shows that the Magellan Infrastructure (Unhedged) has returned 1.46% in the last month. The previous three years have returned 6.43% annualised and 10.8% each year since inception, which is when the Magellan Infrastructure (Unhedged) first started.
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Magellan Infrastructure (Unhedged) first started, the Sharpe ratio is NA with an annualised volatility of 10.8%. The maximum drawdown of the investment product in the last 12 months is -7.25% and -24.07% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Magellan Infrastructure (Unhedged) has a 12-month excess return when compared to the Property - Global Listed Infrastructure Index of -2.68% and 0.76% since inception.
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Magellan Infrastructure (Unhedged) has produced Alpha over the Property - Global Listed Infrastructure Index of NA% in the last 12 months and NA% since inception.
For a full list of investment products in the Property - Global Listed Infrastructure Index category, you can click here for the Peer Investment Report.
Magellan Infrastructure (Unhedged) has a correlation coefficient of 0.84 and a beta of 0.84 when compared to the Property - Global Listed Infrastructure Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
For a full quantitative report on Magellan Infrastructure (Unhedged) and its peer investments, you can click here for the Peer Investment Report.
For a full quantitative report on Magellan Infrastructure (Unhedged) compared to the Global Infrastructure Index, you can click here.
To sort and compare the Magellan Infrastructure (Unhedged) financial metrics, please refer to the table above.
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The portfolio recorded a positive return in the March quarter as inflation and 10-year bond rates pulled back on recession concerns. The stocks that contributed the most were Spanish airport operator Aena, French toll road and airport group Vinci and Australian toll road company Transurban. Aena jumped as its traffic levels exceeded 2019 levels and as 2022 earnings and 2023 guidance exceeded consensus. Vinci’s share price lifted as earnings came in ahead of consensus and as airport passenger traffic continued to rebound across its portfolio. Transurban rose as its second quarter traffic in two of its key markets, Sydney and Brisbane, exceeded 2019 levels.
The stocks that detracted the most were the investments in US rail company Norfolk Southern, US utilities Dominion Energy and Eversource Energy. Norfolk Southern fell on increased social licence risk after a train derailment made international news. Dominion fell as they failed to provide any further detail on their restructuring plans at their annual results presentation (despite the result being in line). Eversource fell as its JV partner for its offshore Sunrise wind project took an impairment and as the New England regulator launched an investigation into bill increases.
The portfolio recorded a positive return in the December quarter as inflation and 10-year bond rates pulled back from September highs. The stocks that contributed the most were French toll road and airport operator Vinci, US rail company Norfolk Southern and UK water utility United Utilities. Vinci rose as traffic on its roads and at its airports exceeded expectations. Norfolk Southern advanced as Congress intervened in a long-running labour dispute to force a settlement on the unions that were holding out. United Utilities lifted as the draft methodology for the next regulatory period was well received and UK bond rates fell.
The stocks that detracted the most were the investments in US utility Dominion Energy, and US tower companies Crown Castle and American Tower. Dominion Energy fell as the management team announced a strategic review of the business that could lead to changes to earnings guidance. Crown Castle and American Tower lagged as interest rates and inflation remained elevated.
The portfolio recorded a negative return in the September quarter when higher interest rates reduced the allure of safer equities. The stocks that detracted the most were the investments in Transurban and Atlas Arteria of Australia and Dominion Energy. Transurban declined after its full-year fiscal 2022 result and distribution target for fiscal 2023 (of 53 Australian cents per unit; +30% approximately) disappointed. Atlas Arteria, which operates four toll roads across France, Germany and the US, declined after a capital raising for the acquisition of the Chicago Skyway, a US toll road. Dominion Energy fell following a poor outcome in the final regulatory order for a large offshore wind project in Virginia. The company is appealing this decision. The only stock that contributed was Atlantia of Italy. Atlantia rose after the infrastructure group’s share price was supported by the ongoing takeover process.
The portfolio recorded a positive return in the June quarter. Stocks that contributed the most included the investments in Atlantia of Italy and Atlas Arteria and Transurban of Australia. Atlantia surged after the Benetton family, the largest shareholder in the motorway and airport infrastructure company with a 33% stake, announced a takeover of 23 euros a share to take the company private. Atlas Arteria, which operates four toll roads across France, Germany and the US, rose after Australian-based IFM Investors took a stake in the company and commenced discussions over a potential take-private transaction. Transurban rose as traffic numbers recovered to pre-pandemic levels and the tollway operator likewise benefited from the inflation protection tollways offer investors.
The stocks that detracted the most were the investments in Aena of Spain and Norfolk Southern and CSX, two railroad companies from the US. Aena slid after the world’s largest airport operator, despite a strong traffic recovery, reported disappointing earnings for the first quarter on the back of higher energy prices. Norfolk Southern and CSX slid on rising talk that tighter monetary policy could send the US economy into a recession, which would hurt railroad volumes, even though railroaders overall reported encouraging results for the first quarter. Norfolk Southern, for instance, posted operating revenue of US$2.9 billion, an increase of 12%.
The portfolio recorded a positive return in the March quarter. Stocks that contributed the most included the investments in Sempra Energy of the US, Enbridge of Canada and Dominion Energy of the US. Sempra Energy rose after investors assessed that one fall-out of the Russia-Ukraine war is faster growth for the company’s North American LNG export business. Enbridge, the owner and operator of the world’s largest crude oil and liquids transportation system across Canada and the US, gained on a healthy full-year earnings report (gross profit of C$7.7 billion in 2021 versus C$4.2 billion in 2020) and as the oil price rose, despite having very limited direct exposure to the oil price. Dominion Energy gained after the power and energy company announced fourth-quarter earnings of US$1.63 per share and initiated better-than-expected guidance for 2022 of between US$3.95 and US$4.25 a share.
The stocks that detracted the most were the investments in American Tower Corp, Crown Castle International of the US and American Water Works. US tower companies American Tower and Crown Castle, which have fixed near term price increases on much of their US tower portfol ios, fell after US inflation hit a 40-year high. American Water slid after results for the fourth quarter 2021 of US$3.55 per share fell short of expectations.
The portfolio recorded a positive return in the September quarter. Stocks that contributed the most included the investments in Sydney Airport, Spark Infrastructure and Red Eléctrica of Spain. Sydney Airport surged following a A$24 billion takeover offer from a consortium led by the infrastructure manager IFM. Red Eléctrica, which operates Spain’s electricity grid, performed strongly as the market warmed to its locked-in regulatory outlook and resilience to rising energy prices in Europe. Spark rose after the electricity transmission company received a A$5.2 billion takeover offer from Ontario Teachers’ Pension Plan Board and Kohlberg Kravis Roberts.
The stocks that detracted the most were the investments in Crown Castle International, Atmos Energy and Norfolk Southern of the US. Crown Castle, a US-based owner of telecom towers, fell due to increasing concerns around inflation. Atmos Energy, which distributes natural gas, fell over concerns that rising natural gas prices may hamper its capex plans. Norfolk Southern, which operates railroads in North America, slid as sequential weekly rail volume growth slowed and as President Joe Biden issued an executive order that seeks to promote competition in the sector.
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