Miton targets 4% yield with new infrastructure fund

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Miton is launching a global infrastructure portfolio for Jim Wright, seeking to deliver a 4 per cent annual yield for investors.

The CF Miton Global Infrastructure Income fund will also target annual dividend growth of between 4 per cent and 6 per cent.

Wright, who joined the group in January, ran the listed infrastructure portfolio for the British Steel Pension Fund for over 10 years.

The fund will open on 23 March and will invest in 40-50 listed global infrastructure companies with the objective of delivering long-term capital growth and a sustainable dividend yield.

Miton says global infrastructure companies have a strong track record of producing stable annual dividends.

Capital growth will come as companies expand their asset bases and enjoy rising inflation-linked cash flows.

The portfolio will be roughly 75 per cent invested in names worth over £10bn market capitalisation.

While having a diverse geographic split, it will be 80 per cent in the developed markets of North America, UK and Europe, preferred for their “stable regulatory and operating environments”.

Utilities will comprise almost half the portfolio, with the remainder invested in sectors demonstrating similar risk/reward profiles, such as telecoms, transport, oil and gas pipeline and storage infrastructure.

The team expects US demand for oil and to rise as cheap energy will be critical to underpin the new administration’s economic growth agenda.

Further, the exponential increase in demand for data and connectivity in developed and emerging economies is a theme to exploit.

Wright says: “Volatile and uncertain markets make the benefits of infrastructure investments particularly attractive; the sector has proven to be resilient during periods of market volatility versus other equity sectors, while also providing capital growth and stable income returns.

“Infrastructure assets have characteristics, which make their return profile closely aligned with the needs of investors seeking long-term reliable income.

“They have regulated or long-term contracted revenues and are relatively uncorrelated to wider macroeconomic cycles.”

The fund will sit in the IA Global Equity Income sector and while not adhereing to a benchmark, claims to have a high active share of 65 per cent versus the FTSE Developed Core Infrastructure 50/50 index.

Minimum investments will be £1,000 and £100,000 with respective ongoing charge figures of 0.75 per cent – capped at 1.5 per cent, and 0.50 per cent – capped at 1 per cent.