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Investing in the networks that enable the digital economy

Infrastructure, in its broadest sense, refers to assets associated with providing services essential for the functioning of global society. In the digital era, that goes beyond the likes of pylons and ports to include what we can consider “evolving” infrastructure. Although they can easily go unnoticed in our daily lives, the global economy today relies on the buildings and networks that facilitate the digital economy.

Even when the infrastructure enabling online activity has a large physical presence, it is often out of sight. When we store digital documents and photos on “the cloud” – where they are accessible wherever and whenever we might want them – how many of us consider the vast warehouse-like data centres that store and process our information?

Since “evolving” infrastructure assets are used by fast-growing parts of the economy – including communications, e-commerce and technology – we believe they can provide compelling opportunities for investors.

Data centres, for instance, perform a critical function in the digital economy. The world’s insatiable appetite for data can only be met by highly connected physical infrastructure assets like those of Equinix.

The US-based company has a global reach, owning and operating 200 data centres spread across 24 countries. Location matters when it comes to data centres, and having well-located, secure assets that have a reliable power supply provides a barrier to entry for would-be rivals.

As well as being strongly positioned for the structural growth in demand for data, investors in Equinix could stand to benefit from the company’s recurring revenues that underpin a reliable stream of dividend income over time.

The trajectory of evolving infrastructure assets, and the income generated from them, can be less predictable than from more traditional infrastructure assets. But if companies like Equinix can succeed in rapidly expanding areas of the infrastructure market, they have the potential to deliver exciting levels of growth over the long term.

The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.

To discover more about the M&G (Lux) Global Listed Infrastructure Fund and how you could invest in essential infrastructure for the modern world

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For Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals. The value of investments will fluctuate, which will cause fund prices to fall as well as rise and investors may not get back the original amount invested.