Why I'm not buying infrastructure investment trusts

Infrastructure investment trusts can be an efficient and well-managed way for investors to access infrastructure assets. However, the last six months have been remarkably eventful for the sector, with significant share price falls and much attention prompted by the Labour Party Shadow Chancellor's comments on bringing UK Private Finance Initiative (PFI) contracts in-house.

International Public Partnerships (INPP) has proved the most resilient stock, with the share price down only 1%, but BBGI has fallen by 4%, HICL Infrastructure Company (HICL) by 9% and John Laing Infrastructure Fund (JLIF) by 10%. To understand these price moves and determine the outlook from here, it is important to consider the impact of diversification away from the traditional PFI/ Public-Private Partnerships (PPP) asset base, and assess the political threat from a resurgent Labour Party. The UK water utilities, particularly those owned privately rather than listed on the London S...