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What is infrastructure investment?

30/10/2023

“Infrastructure” companies are being mentioned across the media, particularly in terms of how the sector will fare with Rishi Sunak’s plans to either curtail or cut completely the plans for the HS2 high-speed railway. 

Infrastructure, though, spans a far wider remit than simply railways. Here’s what the UK infrastructure sector comprises, and how you can invest in it. 

 

What does “infrastructure” actually mean?

In this sense, the word “infrastructure” refers to the most basic services and systems that are needed to support an economy. These include communications and transport systems, utilities, hospitals, schools and more. 

If infrastructure projects are designed well, they can contribute significantly to the economy – in terms of both productivity and growth. If poorly planned, infrastructure projects can result in low returns, delays and waste. 

With both the government and businesses often working together to fund, build and maintain UK infrastructure projects, there can sometimes be gains to be made by investors – particularly when the Government commits to long-term support. But how can you invest in infrastructure in the UK?

 

How to invest in UK infrastructure

It’s possible to invest in infrastructure by picking and choosing individual companies in the sector in which you would like to invest. However, this requires a huge amount of knowledge about the sector, its plans and the performance of individual companies – knowledge that can take time to attain. 

Instead, some investors opt for infrastructure funds: funds which feature a variety of companies, sometimes purely UK-based, sometimes including overseas ventures. As with any investment, the funds that you choose to invest in will depend on the types of infrastructure you are interested in, the type of fund you want to invest in, your risk appetite and the amount of money you have available to invest. You’ll often find industry experts recommending their favourite infrastructure funds, but remember: even when recommended by experts, the value of your investment can go down as well as up. 

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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