Why Consider Global Listed Infrastructure | Page 2 of 2 | ETF Trends

Turning to valuations, infrastructure appears attractive compared to broader equities as seen in the chart below. Infrastructure has typically traded at a premium to traditional equities. Current valuations relative to broader global equities have not been this narrow since 2009, suggesting infrastructure may be attractive from a valuation perspective. The current spread of +67 basis points (bps) is well below the historical average spread of +129 bps.

Data as of 6/30/18. Source: Factset, Bloomberg, DWS. 
Global Equities = MSCI World Index; Global Infrastructure = Dow Jones Brookfield Infrastructure Index

Overall, we expect global economic growth to decelerate over the near-term coupled with the potential for higher inflation. Global economic growth has been relatively stable thus far, but we expect this momentum to fade as we move forward, given key economic indicators, such as global PMIs, may be suggesting that the synchronized global expansion is losing steam. Even if a market correction does not occur, we believe there is a place for listed infrastructure in a portfolio — especially for investors concerned about inflation– given that infrastructure has historically been able to withstand rising prices better than other equity market segments.