Infrastructure market outlook 2025

Both of UB's funds investing in listed infrastructure companies saw positive returns in 2024, with significant divergence between them. UB Infra, which focuses on developed markets, yielded a few percent returns, while the UB EM Infra fund, targeting emerging markets, rose over 20%. Despite the global economic growth slowing down during the year, cuts in central bank policy rates and a decline in long-term interest rates were favourable for infrastructure companies, which benefit from higher dividend yields.

Economic Growth and Interest Rate Developments Support Infrastructure Sector in 2025

The operating environments for industries within the infrastructure sector appear quite stable heading into 2025. In the United States, economic growth is expected to remain relatively strong, with an ongoing increase in energy consumption that benefits many infrastructure companies. While economic growth in Europe is on a more uncertain footing, the growing energy consumption and ongoing green transition efforts continue to support the sector. In emerging markets, China's economic development plays a pivotal role, with interest rate cuts and continued strong stimulus measures boosting optimism in both the stock markets and infrastructure companies.

The outlook for the interest rate markets is favourable for infrastructure companies, as further rate cuts are expected in 2025. In both the Eurozone and the United States, inflation slowed to a range of 2–3% by the end of the previous year, creating conditions for central bank rate cuts in 2024. However, inflation has proven more persistent than expected in developed markets, which may slow down the pace of rate reductions.

For infrastructure companies, the biggest risks in broadly diversified portfolios are related to unforeseen geopolitical events. Additionally, the economic policies of the newly elected U.S. president, Donald Trump, could bring new surprises to the market during 2025.

Listed infrastructure companies serve as a functional diversification component in an investment portfolio. Their attractive dividend yields and moderate valuation levels help smooth out value fluctuations while offering competitive long-term returns. 

United Bankers' infrastructure funds:

UB Emerging Markets Infra Fund »

An Equity Fund that offers the opportunity to invest in emerging market infrastructure companies with strong growth potential.

UB Infra Fund »

Infrastructure investments have the advantage of a good potential for profit and stable development.

All our funds »

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The information presented is based on UB’s own estimates and sources considered reliable by UB. The information on which the conclusions are based may change quickly and UB Group may revise its market view without prior notice. No information obtained through this presentation should be construed as a solicitation to invest. When making investment decisions, readers should base their decisions on their own assessment of the investment and the risks involved, and to consider their personal goals and financial situation.

Investing in funds always involves financial risk. The value of an investment in a fund may go up or down and you may lose some or all of the capital invested. The past performance of a fund is not a guarantee of future performance and cannot be used to predict future returns. The target return set for a fund may not be achieved. The risks are set out in more detail in each fund’s key information document and in the fund prospectus. Before making an investment decision, investors should consult the fund’s key investor information document, fund prospectus, rules and price list, which are available on each fund’s website. The funds are managed by UB Fund Management Company Ltd. The portfolio management of the funds has been outsourced to UB Asset Management Ltd.