The strategy of the Fund is to invest in a globally diversified portfolio of best-in-class, next generation real estate and infrastructure companies that are listed in developed markets. These companies are likely to benefit from the digitalisation of economies, changing the way we work, live and play.

The Fund currently invests in 32 listed infrastructure companies operating at the intersection of real estate and technology. These companies own physical infrastructure assets that are vital to the functioning of the digital economy and are active in four specialist sub-sectors: logistics warehouses supporting e-commerce (50.1 % portfolio weight), data centres (26.6% portfolio weight), mobile communication towers (18.7% portfolio weight), and networks (4.0% portfolio weight).

Over the course of the month, the NAV increased by 2.3% (C Acc GBP). Since launch, NAV has increased by 0.1% (C Acc GBP). In comparison, the global real estate index has increased by 3.8%¹.

The data centres sub-sector was the best performing over the month, and was up 4.0%². The logistics sub-sector followed, up 3.8%². Cell towers and networks performed negatively, down -3.0%² and -7.7%² respectively. Performance in May was primarily driven by regional diversification, with all three geographies delivering positive returns, with the Asia Pacific region performing the best, up 3.7%² on the month. This further re-iterates the benefit of running a diversified portfolio.

Markets continued to recover in May as consumer sentiment improved and trade tensions eased. US trade negotiations progressed with the European Union, and a temporary delay to planned tariff hikes reduced fears of a global recession and fuelled broad-based gains across riskier asset classes. Bond markets were volatile in May, caught between competing risks from sticky inflation, slowing growth and rising fiscal concerns, with the Bloomberg Global Aggregate Index falling 0.4%. However, easing trade tensions and moderating inflation concerns restored confidence in the market month-end, with bond markets recovering.

NextDC (portfolio weight 3.8%), an Australian data centre operator, announced a 52MW (or 30%) increase in contracted capacity in May, thanks to significant contract wins in Victoria and its largest AI deployment in the Company’s portfolio. This will bring its contracted utilisation to 228MW. NextDC has also increased its capex guidance by $100 million to further support the acceleration in its planned inventory expansion. Another Australian company, Goodman (portfolio weight 6.4%), issued a strong quarterly update, confirming strong capital partnership opportunities and an increase in development work in progress (WIP), which moved 5% higher to $13.7 billion. Data centres now comprise more than 50% of Goodman’s WIP. Yield on cost has also increased to 7.1%, with guidance reiterated at 9% growth. Greg Goodman, the CEO of Goodman Group, said, “Desire for modern, sustainable, logistics facilities in central locations, where automation can improve productivity, continues. Space is scarce in our markets, and supply in our locations remains limited."

Montea (portfolio weight 2.8%), an investor in European logistics real estate, was the top performing European logistics name in the portfolio in May on the back of a strong Q1 trading update. Montea announced stronger like-for-like growth, with an increase in EPRA EPS of 9%. The Company invested €111 million in Q1, bringing their total investment as part of the Track27 plan to €552 million. Jo De Wolf, CEO of Montea, said, “With approximately 70% of our targeted investment volume already secured under Track27, Montea remains strongly committed to its continued growth ambitions whilst maintaining its consistently high occupancy through dynamic letting activity. The recognition of our growth has led to the inclusion in the BEL20 index earlier this year.”

The Investment Manager maintains a positive outlook on the digital infrastructure sector, primarily due to the strong performance of underlying portfolio assets. Economic uncertainty caused by US tariffs highlights the benefits of running a diversified digital infrastructure portfolio. As such, the digital infrastructure sector remains a key investment area for any investors seeking long-term returns.

1. MSCI World IMI Core Real Estate IMI GBP
2. Defined as the calendar month, as opposed to the valuation month.