Are infrastructure stocks really 'bond proxies'?

The momentum behind infrastructure equities has slowed over the last 18 months, with concerns over interest rate rises and political factors seemingly undermining the investment case for the asset class.

This derives from the ‘bond proxy' argument, which essentially conflates infrastructure equities with bonds, whereby a rising interest rate environment will erode the value of the dividend yield. This can also impact returns as these stocks tend to have higher-than-average levels of debt, and this debt becomes more expensive as underlying risk-free rates rise.  Infrastructure equities do have many similar qualities to bonds. The regulated or long-term contracted nature of returns gives a degree of predictability, sustainability and resilience throughout the economic, business and product...