Skip to main content
logo
  • Products

    Investment Vehicles

    • ETFs
    • Commingled Funds
  • Investment Strategies

    Investment Options

    • Alternatives
    • Beta Strategies
    • Equities
    • Fixed Income
    • Global Liquidity
    • Multi-Asset Solutions
    • Commingled Funds

    Capabilities & Solutions

    • ETFs
    • Global Insurance Solutions
    • Liability-Driven Investing
    • Pension Strategy & Analytics
    • Outsourced CIO
    • Retirement Plan Solutions
    • Sustainable Investing
  • Insights

    Market Insights

    • Market Insights Overview
    • Eye on the Market
    • Guide to the Markets
    • Guide to Alternatives
    • Market Updates

    Portfolio Insights

    • Portfolio Insights Overview
    • Alternatives
    • Asset Class Views
    • Currency
    • Equity
    • Fixed Income
    • Long-Term Capital Market Assumptions
    • Portfolio Strategy
    • Sustainable Investing Insights
    • Strategic Investment Advisory Group

    Retirement Insights

    • Retirement Insights Overview
    • Guide to Retirement
    • Defined Contribution
  • Resources
    • Center for Investment Excellence Podcasts
    • Events & Webcasts
    • Insights App
    • Library
    • Taft-Hartley
    • Market Response Center
    • NEW: Morgan Institutional
  • About Us
    • Trusted Asset Manager
    • Diversity, Equity & Inclusion
  • Contact us
  • English
  • Role
  • Country
  • Morgan Institutional
    Search
    Search
    Menu
    You are about to leave the site Close
    J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
    CONTINUE Go Back
    1. Infrastructure resiliency during the COVID-19 crisis

    • LinkedIn Twitter Facebook Line

    Infrastructure resiliency during the COVID-19 crisis

    David Lebovitz

    As it becomes increasingly challenging to source assets that provide both income and safety, infrastructure looks positioned to help investors grow and diversify their real asset portfolios.

    The rapid spread of COVID-19 and resulting spike in market volatility has shaken the global investment community. Although equity prices have staged a modest recovery in recent weeks, the fall in government bond yields has complicated the way investors think about asset allocation. As it becomes increasingly challenging to source assets that provide both income and safety, it seems likely that investors will continue to embrace core real assets. Furthermore, with many institutional investors having sported dedicated real estate allocations for quite some time, infrastructure looks positioned to help investors grow and diversify their real asset portfolios.

    From an asset allocation standpoint, this creates the need for three distinct sleeves – risk, protection, and uncorrelated income. The risk and protection sleeves are fairly straightforward – cash and high quality government bonds will provide protection, while equities and lower rated credit will continue to act as a source of growth. However, the past few years have seen growing investor interest in core real assets as a source of both income and diversification. Infrastructure in particular has benefitted from this trend; the asset class is fairly transparent, and U.S. investors remain under-allocated relative to their European counterparts.

    With the global economy locked down, concerns around the ability of infrastructure assets to continue generating attractive streams of income have come to the forefront. However, not all infrastructure investments are created equal. Certain infrastructure assets, like airports and shipping terminals, tend to more sensitive to the business cycle, and will therefore see the greatest impact from the current slowdown. On the other hand, regulated utilities are obligated to maintain service, whereas any issues with contracted assets will be a function of changes in counterparty risk. This suggests that core infrastructure assets will be less affected while the economy is offline.

    Exhibit 1: Global core infrastructure returns
    Rolling 4-quarter returns from income and capital appreciation

    Source: MSCI, J.P. Morgan Asset Management.
    Infrastructure returns represented by the "low risk" category of the MSCI Global Quarterly Infrastructure Asset Index. Data show rolling one-year returns from income and capital appreciation. The chart shows the full index history, beginning in the first quarter of 2009.
    Past performance is not indicative of future results. Alternative investments carry more risk than traditional investments and are recommended only for long-term investment. Some alternative investments may be highly leveraged and rely on speculative investments that can magnify the potential for loss of gain. Diversification does not guarantee investment returns or eliminate the risk of loss.
    Data is based on avaliability as of February 29, 2020.

    Furthermore, it is important to remember that periods of economic stress and dislocation create opportunity. The key is to construct portfolios that can successfully navigate the storm. With high quality fixed income looking expensive, and investments that move with the equity market increasingly becoming a source of yield, leveraging sources of uncorrelated income like core infrastructure to bridge the gap between these two types of assets will only continue to grow in importance.

    0903c02a828a9f26 

    RELATED INSIGHTS

    Guide to the Markets

    Updated each quarter, our popular Guide to the Markets illustrates a comprehensive array of market and economic trends and statistics through clear, compelling charts you can share with your clients.

    View the guide

    Weekly Market Recap

    Start every Monday morning with a one-page snapshot of top headlines, market performance, and chart of the week.

    Read more

    Market Insights Overview

    Simplify the complex with our timely and thought-provoking insights on market events and outlook and make informed investment decisions more confidently

    Learn more
    J.P. Morgan Asset Management

    • About us
    • Investment stewardship
    • Privacy policy
    • Cookie policy
    • Binding corporate rules
    • Sitemap
    • Accessibility
    Opens LinkedIn site in new window
    J.P. Morgan

    • J.P. Morgan
    • JPMorgan Chase
    • Chase

    This website is a general communication being provided for informational purposes only. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes. By receiving this communication you agree with the intended purpose described above. Any examples used in this material are generic, hypothetical and for illustration purposes only. None of J.P. Morgan Asset Management, its affiliates or representatives is suggesting that the recipient or any other person take a specific course of action or any action at all. Communications such as this are not impartial and are provided in connection with the advertising and marketing of products and services. Prior to making any investment or financial decisions, an investor should seek individualized advice from personal financial, legal, tax and other professionals that take into account all of the particular facts and circumstances of an investor's own situation.

    Opinions and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors.

    INFORMATION REGARDING INVESTMENT ADVISORY SERVICES:   J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. Investment Advisory Services  provided by J.P. Morgan Investment Management Inc.

    INFORMATION REGARDING MUTUAL FUNDS/ETF: Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing. The summary and full prospectuses contain this and other information about the mutual fund or ETF and should be read carefully before investing. To obtain a prospectus for Mutual Funds: Contact JPMorgan Distribution Services, Inc. at 1-800-480-4111 or download it from this site. Exchange Traded Funds: Call 1-844-4JPM-ETF or download it from this site.

    J.P. Morgan Funds and J.P. Morgan ETFs are distributed by JPMorgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. JPMorgan Distribution Services, Inc. is a member of FINRA  FINRA's BrokerCheck

    INFORMATION REGARDING COMMINGLED FUNDS: For additional information regarding the Commingled Pension Trust Funds of JPMorgan Chase Bank, N.A., please contact your J.P. Morgan Asset Management representative.

    The Commingled Pension Trust Funds of JPMorgan Chase Bank N.A. are collective trust funds established and maintained by JPMorgan Chase Bank, N.A. under a declaration of trust. The funds are not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The funds are available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the funds are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges, and expenses of the fund before investing.

    INFORMATION FOR ALL SITE USERS: J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.

    NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

    Telephone calls and electronic communications may be monitored and/or recorded.

    Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our privacy policies at https://www.jpmorgan.com/privacy.

    If you are a person with a disability and need additional support in viewing the material, please call us at 1-800-343-1113 for assistance.

    READ IMPORTANT LEGAL INFORMATION. CLICK HERE >

    The value of investments may go down as well as up and investors may not get back the full amount invested.

    Copyright 2023 JPMorgan Chase & Co. All rights reserved.