Building value: How to avoid infrastructure yield traps

In today’s uncertain and low interest rate environment, yield has lured investors seeking bond proxies to some parts of the equity market. Beneficiaries of this yield obsession have included sectors such as consumer staples and real estate investment trusts (REITs), as well as some parts of the listed infrastructure market. We believe, however, that asset prices for many regulated utilities, pipeline companies and cell towers in North America, in particular, are now materially overvalued and may be vulnerable to rises in real and nominal interest rates. No guide to value It is worth...