Infrastructure mid-year outlook: A strong first half reinforces a compelling road ahead

Listed infrastructure remains attractive because resilient essential-asset demand, structural power needs and discounted valuations outweigh near-term macro and regulatory risks.

• Listed infrastructure returned 11.3% through July 2026, supported by demand for hard assets with low obsolescence and outperforming many traditional asset classes.
• Midstream energy, electric utilities, LNG infrastructure, railways and ports led performance, helped respectively by higher crude prices, AI-driven power demand, higher European gas prices, stronger freight volumes and cargo rerouting.
• Airports lagged because of Iran-related travel disruption and higher jet-fuel prices, while toll roads were pressured by rising interest rates.
• Communications was the weakest subsector as higher rates and concerns about Starlink competition weighed on tower valuations, although mobile-data growth and expected earnings reacceleration support terrestrial networks.
• AI adoption, data-center growth, electrification and grid-reliability needs are expected to drive U.S. power-demand growth of 3–5% through 2030, creating investment needs across utilities, natural-gas infrastructure and energy networks.

Takeaway: The long-term outlook for listed infrastructure is constructive and valuations remain attractive relative to global equities, but inflation, trade policy and regulation create meaningful differences between sectors and companies, favoring active management.