UKW, JLEN, GCP: Infrastructure investment trusts under investors’ lens

Highlights

• Infrastructure investment trusts in the UK have gained more than all alternative listed funds so far in 2022.
• Due to its inelastic nature of demand, the infrastructure sector is considered a good hedge against inflation.
• The renewable energy infrastructure sector has gained significance due to soaring energy prices.

Infrastructure assets have been grabbing the attention of investors amid the soaring inflationary pressures. So far this year, infrastructure investment trusts in the UK have gained more than all alternative listed funds. While funds worth £621 million have been raised by traditional infrastructure since the beginning of 2022, renewable energy infrastructure trusts have successfully raised over £1 billion.

Despite higher fundraising, both sectors have witnessed a decline in their premiums to net asset value (NAV) this year. Falling from 13.3% since the start of the year, the average infrastructure sector trust is presently trading at a premium to NAV of 9.6%.

Due to its inelastic nature of demand, the infrastructure sector is considered a good hedge against inflation, as it allows the soaring costs to be forwarded to the customers. However, the passing on of costs isn’t a uniform practice. Due to the volatility of energy prices, the revenues of the renewables infrastructure sector keep fluctuating.

As the energy prices have been spiralling lately amid increasing environmental consciousness, the renewable energy infrastructure sector has gained significantly. Let’s look at the share price performance of 3 infrastructure investment trusts focused on renewable energy that investors can keep an eye on.

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Greencoat UK Wind plc (LON: UKW)

The shares of the leading renewable infrastructure fund, Greencoat UK Wind plc, were up by 0.85% at around 3:00 PM (GMT+1) on 20 June 2022, at GBX 154.70. The FTSE250-listed company has provided its shareholders with a return of 20.90% over the last one year as of 20 June 2022, while its year-to-date return stands at 10.24%. The company’s current market cap stands at £3,554.82 million.

JLEN Environmental Assets Group Ltd (LON: JLEN)

The shares of the environmental infrastructure investment fund, JLEN Environmental Assets Group plc, were down by 0.16% at around 3:00 PM (GMT+1) on 20 June 2022, at GBX 121.80. The FTSE250-listed company has provided its shareholders with a return of 25.76% over the last one year as of 20 June 2022, while its year-to-date return stands at 16.24%. The company’s current market cap stands at £807.07 million.

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GCP Infrastructure Investments Ltd (LON: GCP)

The shares of the closed-ended investment firm, GCP Infrastructure Investments Ltd, were trading at GBX 115.00 at around 3:00 PM (GMT+1) on 20 June 2022. The FTSE250-listed company has provided its shareholders with a return of 17.27% over the last one year as of 20 June 2022, while its year-to-date return stands at 6.23%. The company’s current market cap stands at £1,016.84 million.