Who stands to gain from $64 trillion in infrastructure spending?

A staggering $64 trillion needs to be spent on global infrastructure over the next few years, according to research by Aberdeen Investments*. Its report warns significant sums must be spent on upgrading roads, railways, energy grids and broadband connections to cope with growing demands.

But what does this mean for investors? How can they take advantage of this multi-year trend and what companies are most likely to benefit? In our spotlight on infrastructure, we look at where the money will be focused and the investment funds embracing this flourishing sector.

What is infrastructure?

It’s an umbrella term that covers projects aiming to improve transport links, communication systems and the provision of utilities. These areas form the absolute bedrock of a global society, playing a crucial role in how everyone lives and works. They also tend to be longer-term projects that give the companies involved plenty of visibility in terms of their revenues. However, there are obviously downsides. Such schemes can be adversely affected by changing political sentiment and regulatory requirements.

How much is needed?

According to Aberdeen, significant infrastructure projects are required in emerging economies, as well as more developed areas: “Emerging markets lead the demand,” they stated. “Rapid population growth and urban migration mean countries must build more – and better – transport, energy and public utilities.” However, more established regions also need an overhaul. “Years of underinvestment have left roads, airports and energy grids in poor shape,” it added.

The study suggested that electrification and AI-driven power needs meant that global generation capacity must more than double by 2050*. While high debt and rising interest costs make public funding a tough prospect, it also points out there’s a price to pay for sitting on our hands: “Infrastructure gaps drag on productivity and long-term growth. A World Bank study found that every $1 spent on public infrastructure yields $1.50 in economic output.”

What are the key trends?

The main drivers include digitalisation of the world’s economies, improving aging infrastructure, higher power demand from AI, and deglobalisation, according to a report by Cohen and Steers**. The study argued that the backdrop of higher interest rates, sticky inflation, and slower growth is an environment that has historically favoured infrastructure investing.

“The powerful combination of today’s economic regime and the world’s growing infrastructure investment needs is one that we believe will drive strong relative and absolute performance for infrastructure companies,” says Jeffrey Palma, co-manager on the Cohen & Steers Diversified Real Assets fund. Construction firms, utility companies and transport operators are all important players in this area and the high demand for their services is expected to continue. Many of these businesses, including UK power business National Grid and Union Pacific Corporation, a US railroad holding operation, are multi-billion pound companies 

Benefits to investors

Jeffrey adds that listed infrastructure has the potential to offer the strong returns and diversification that investors seek: “The long-term case for adding infrastructure to an equity or stock/bond portfolio is compelling, based on the asset class’s return, volatility and correlation attributes,” he says. He also pointed out that listed infrastructure valuations are unusually attractive, trading at a 10% discount to global equities, compared with a historical average premium of 9%**.

So, how can investors get involved? Well, you can obviously buy shares in many established infrastructure businesses but your risk is focused on those stocks.

An alternative is to buy into a specialist infrastructure fund whose manager has responsibility for scouring a particular market – or even the world – for the most attractive holdings. Unsurprisingly, there are now plenty of such portfolios but it’s important to choose one based on their experience, approach to diversification, and spread of holdings.

Here are three suggestions that could be worth considering.

First Sentier Global Listed Infrastructure

Experience counts for a lot and First Sentier were one of the pioneers in providing access to infrastructure. They’re now a recognised leader in this field. Lead manager Peter Meany is one of the most experienced managers in the space and is a pretty conservative investor, recognising that capital preservation is crucial for long-term capital growth. 

The portfolio is well diversified in terms of both geography and sector, while the 10 largest stock positions account for between 3.1% and 4.8% of assets under management***. Electric utilities, highways and railtracks, multi-utilities and rail transportation are the most prominent sectors***. We see this fund as an alternative method of playing the global equity market with a thematic bias and a reasonable yield.

Schroder Digital Infrastructure

There’s an insatiable demand when it comes to the infrastructure required to fully embrace the global digital economy. The Schroder Digital Infrastructure fund, co-managed by Tom Walker, Ben Forster and Hugo Machin, invests in around 40 stocks involved in this world. This list includes those operating within communication services, real estate, information technology and financials****.

The largest individual stock positions, meanwhile, include Cellnex Telecom, American Tower Corp and Singapore Telecommunications****. We believe it’s hard to argue against the logic of this fund, as the demand for data is insatiable and will require ever more digital infrastructure.

VT Gravis UK Infrastructure Income

While our first two suggestions were global portfolios, our third invests mainly in investment trusts exposed to different types of UK infrastructure. This portfolio, which can have exposure to assets as diverse as railways and GP surgeries, aims to deliver a regular annual income of around 5%.

The fund has 28 holdings and substantial exposure to subsectors such as renewable energy infrastructure and hospitals & primary care^. We see this as a well-diversified fund that provides an excellent way to invest in the growing need for infrastructure in the UK. The fund also has a very good yield, which will be attractive to income investors at a time when generating a decent level of income can be challenging.

*Source: Aberdeen Investments, 26 June 2025

**Source: Cohen & Steers, May 2025

***Source: fund factsheet, 30 April 2025

****Source: fund factsheet, 30 June 2025

^Source: fund factsheet, 21 May 2025