Infrastructure and renewable energy funds were the darlings of the investment trust world just a few years ago, dominating both primary and secondary issuance through a combination of attractive income returns and a compelling investment story founded in the need to develop better, cleaner, greener and higher-tech infrastructure around the world. Yet changing market dynamics have caused a considerable fall from favour, with 10 fewer trusts across both sectors than in mid-2023 – and still more heading for the exit. In this note, we consider the factors underlying these trends, and explore how a more growth-orientated mindset (still backed up by an attractive income) could tempt investors ‘back to the future', whether through reducing emissions, building data centres, expanding electrical grid capability or fuelling sustainable transport.
