New York, NY – The abrdn Global Infrastructure Fund (Institutional Class) experienced a challenging second quarter in 2024, returning -2.21% compared to the 2.33% increase in the S&P Global Infrastructure Net Index. Stock selection in industrials and utilities weighed down the Fund’s performance relative to the market index during this period.
The Brazilian toll-road operator, CCR, faced challenges after missing out on a bid for a toll road in Brazil, impacting its stock performance despite positive quarterly results. Vinci, a French construction company, reacted negatively to the announcement of a snap election in France, causing concerns about potential infrastructure-related restrictions. Norfolk Southern Corporation, a U.S. railroad operator, saw a weak start to the year due to minimal changes in management and negative sentiment within the transportation sector.
Conversely, positive stock selection in energy offset some negative factors for the Fund, while non-benchmark exposure to the materials sector had a marginal impact. Helios Towers, Vistra Corporation, and Dycom Industries were among the individual stock contributors that positively influenced the Fund’s performance during the quarter.
Global equity markets experienced growth, with central banks cutting interest rates in response to disinflation. In the U.S., large technology companies like NVIDIA performed well, benefiting from advancements in artificial intelligence. European equities rose, but political uncertainties in countries like France and the UK led to market volatility. Asian markets saw varied performances, with Australian stocks underperforming and Japanese equities increasing. Emerging markets showed optimism, despite concerns about the Chinese economy and fiscal challenges in countries like Brazil and Turkey.
Looking ahead, investors are monitoring macroeconomic factors, central bank policies, and geopolitical risks for potential market impacts. The focus remains on investing in diversified, high-quality businesses with strong growth potential amidst evolving market conditions. Technology companies, particularly those involved in AI, continue to drive market sentiment, highlighting the importance of infrastructure support for technological advancements. Amidst ongoing political uncertainties and global economic challenges, long-term drivers for infrastructure investments remain intact, including energy transition, digital acceleration, and urbanization trends.
